Case Note England and Wales, UKSC 4 November 2015, Cavendish Square Holdings BV v. Makdessi; ParkingEye Ltd v. Beavis

The UK Supreme Court decision in Cavendish Square Holdings BV v Makdessi; ParkingEye Ltd v Beavis marks an important turning point in the treatment of penalty clauses in England and Wales. In these two conjoined cases, the Court sought to give clarity to the previously complex law on this topic and to identify its underlying principles. The cases involved both commercial parties (Makdessi) and a consumer (ParkingEye). While refusing to abolish the rule against penalties, the Supreme Court, in adopting a very restrictive approach to intervention, highlights the continuing importance of freedom of contract reasoning in the common law of contract. It also provides a good illustration of the difficulties of applying a directive (here the Unfair Terms Directive 1993/13/EEC) in the national consumer law context.