£100 mobile phone bill for exceeding data limits

Half_way

( hypothetical situation re parking eye vs beavis )

Edit: to avoid confusion this is a hypothetical situatuation - could the beavis case reach further than just the Parkig world, and if so will things such as that below become common?

Today I received my phone bill, only to find that I have been charged £100 for going 25megabytes over my 10Gigabyte allowance.
Ive queried the charge with the phone company, but I have been told that I have to pay this as its a penalty for breaching the terms and conditions.
If I dont pay up then my credit record will be trashed.
the Phone company has said that the penalty is commercially justified, and that they are allowed to charge commercially justified penalties as shown by the Parkig Eye vs Beavis & Wardley case


While people are looking at the parking eye case and what could possibly come out if it, the implications reach far further than the parking world - if its lost and commercially justified penalties are classed as acceptable could we see things like the above raising their heads in sectors other than parking?

esmerobbo

Is it in the contract you signed?

TDA

In the unfortunate event that Beavis does go that way it would depend what the ratio of the decision was.

Should it go that way I imagine (hope) it would have very narrow application, almost entirely limited to the parking industry.

In his judgment Moloney stated a large part of his reasoning was that in the case of parking deterrence is the whole game (deterring breach is the single commercial objective of the landowner in hiring the PPC). In other previous cases the existing doctrine of awarding damages was deemed sufficient to secure performance and deter breach.

To take another example. You are four hours late checking out from a hotel. The hotel seek damages for the amount of money that would have been owed had the room been occupied by another customer for those four hours (let's call it £30). In this scenario, knowing you would have to pay the £30 is likely to be sufficient to deter you intentionally overstaying.

The sole (theoretical) purpose of the contract in parking is to deter breach. But damages will never achieve this. For a P&D car park, why buy a P&D ticket? There's a good chance you won't get a ticket, and if they do they can only sue for the cost of said ticket? What about overstays where there is difficulty in calculating a loss (if there is any)?

In your example the contractual term would be designed as a deterrent, but it can hardly be said that the purpose of your contract with the mobile phone company is to prevent you exceeding your 10GB limit.

Even if the Beavis decision does go in PE's favour I am not convinced we will see a world where penalty clauses are enforceable in every consumer contract going. Maybe I'm just optimistic though.

Coupon-mad

Half_way wrote: »

( hypothetical situation re parking eye vs beavis )

Edit: to avoid confusion this is a hypothetical situatuation - could the beavis case reach further than just the Parkig world, and if so will things such as that below become common?

Today I received my phone bill, only to find that I have been charged £100 for going 25megabytes over my 10Gigabyte allowance.
Ive queried the charge with the phone company, but I have been told that I have to pay this as its a penalty for breaching the terms and conditions.
If I dont pay up then my credit record will be trashed.
the Phone company has said that the penalty is commercially justified, and that they are allowed to charge commercially justified penalties as shown by the Parkig Eye vs Beavis & Wardley case


While people are looking at the parking eye case and what could possibly come out if it, the implications reach far further than the parking world - if its lost and commercially justified penalties are classed as acceptable could we see things like the above raising their heads in sectors other than parking?

Companies cannot penalise people for 'default' as this is not a core price term. This goes against Consumer Law generally. But you are right - this is the enhanced risk of the PE v Beavis case which could affect all sorts of 'contracts' in life (don't worry, the defence has it covered). If Beavis is won by PE then any firm could fine anyone - e.g. you spill a bit of beer in the pub = £100 please. You drop your receipt as you walk away from Tesco = £100 please. It really could have that effect IMHO and that's why I think it won't happen.

Here you go, I know your thread was only hypothetical but, here's a chunk of wording I used in a defence once (re a PPC but applicable to anything):


''Parliament's view is shown in a document relating to bank charges:


‘’1.19 In our view the basic principles set out here also apply to other analogous default charges in consumer contracts’’
" Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example, a charge for 'agreeing to' or 'allowing' a customer to exceed his credit limit is no different from a charge for the customer's 'default' in exceeding his credit limit.) The UTCCRs are concerned with the intention and effects of terms, not just their mechanism."
3.2 The requirement of 'good faith' reflects the principle of fair and open dealing with consumers. It does not simply mean that terms must not be used deceitfully; it means that terms should be drafted in a way that respects consumers' legitimate interests. In assessing fairness we take note of not only how a term is used, but how it could be used.

In the Unfair Terms in Consumer Contracts Regulations 1999, the guidance includes the following advice:

“The Regulations apply a test of fairness to all standard terms (terms that have not been individually negotiated) in contracts used by businesses with consumers, subject to certain exceptions. The main exemption is for terms that set the price or describe the main subject matter of the contract (usuallyknown as 'core terms') provided they are in plain and intelligible language. The Regulations thus apply to what is commonly called 'the small print' of standard form consumer contracts”.

“The Regulations are concerned with the intention and effects of terms, not just their mechanism. If a term has the effect of an unfair penalty, it will be regarded as such, and not as a 'core term'. Therefore a penalty cannot be made fair by transforming it into a provision requiring payment of a fee for exercising a contractual option”.

“The concern of the Regulations is with the 'object or effect' of terms, not their form. A term that has the mechanism of a price term, or which purports to define what the consumer is buying, will not be treated as exempt if it is clearly calculated to produce the same effect as an unfair exclusion clause, penalty, variation clause or other objectionable term”. ''