In the Penalty Area:  Non payment of calls, retrospective cancellation of cover and penalty clauses

This article examines the Supreme Court’s decision in Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Limited v Beavis [2015] UKSC 67 which reviewed the law on contractual penalties. This is relevant to most commercial contracts but also the rules applied by many P&I clubs concerning loss of coverage for non-payment of calls or other sums. Are such rules penalties and is there a distinction when they are retrospective and thereby apply not only to the defaulting year but earlier non-defaulting years?