The Finnish Consumer Agency has asked the Ministry of Justice to study the need for special legislation regarding private parking control. Consumer authorities have received reports and complaints about situations that are problematic from the viewpoint of contract law.
In addition to the police and local authorities, private companies have started to control parking in some places in Finland. Parking penalties under private law have joined parking fines under public law. The private companies that have been established say they have a right to impose penalties on the basis of a tacit contract that is concluded between a motorist and the company when the motorist parks in a marked area. The conditions of the tacit contract are listed on a sign that warns motorists of the consequences of unauthorized parking.
A penalty is collected from the owner of a vehicle, who is identified on the basis of the licence number. Although the police can follow this procedure according to section 8 of the Act on Parking Fines, the matter is not so simple under contract law. The owner is not a contract party if the owner was not driving the vehicle and therefore cannot be held responsible for paying a penalty.
In situations like this the company has asked the owner to prove that someone else was driving the vehicle. This goes against rules concerning the burden of proof in contract law. The practice is also weighted in favour of the private company, upsetting the balance between the rights and obligations of the business and the consumer. In the opinion of the Consumer Agency, such a contract term is unfair and violates the Consumer Protection Act. It is also difficult to see how such a procedure could meet requirements regarding good debt collection and protecting debtors' privacy.
It is unclear whether debt collection can automatically target a person who may not have driven or parked a vehicle. Three such cases are pending in the district courts, and the Consumer Dispute Board is considering around twenty cases that concern the question of whether a contract has actually been concluded and whether a penalty is justified.
Consumers also have doubts about the legality of the whole scheme. In addition to general queries about legality and fairness, the Consumer Agency has received complaints about parking charges in places which should have free parking according to the master plan for the area. Questions have also been raised concerning the issuing of licenses for private parking control and the relation between companies' signs and traffic signs. Reports have cited the Road Traffic Act and a ruling by the Supreme Administrative Court (1996-A-55).
Private parking control is part of a broader phenomenon, the privatization of services that were previously in the public sphere. Other examples are security services and the outsourcing of billing and debt collection by public bodies to private companies.
Privatization often raises questions that are not easy to answer. On what legal basis can a private company act and how can a private company that lacks authority ensure citizens' legal security? If activities have traditionally involved sanctions, how can they be turned over to a private company whose main purpose is to make money? Careful thought should be given to these questions.