A Pyrrhic Victory for the Doctrine against Penalties: Makdessi v Cavendish Square Holding BV

摘要

In Makdessi v Cavendish Square Holding BV; ParkingEye Ltd v Beavis, the doctrine against penalty clauses has survived a challenge to its very existence. But its victory is a pyrrhic one. The Supreme Court has not only refused to follow the example of the High Court of Australia in expanding the doctrine; it has also narrowly recast the doctrine. Even before this decision, there were only rare sightings of courts declining to enforce clauses owing to their penal nature. In its wake, we may expect such sightings to disappear altogether: the doctrine may thus become de facto extinct, even if it remains de jure alive.