Rendimiento de choclo (RCH)

6.47 Article 5 of the UTD requires that all written terms are in plain, intelligible language. It states:

In the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language.

6.48 The article goes on to say that in an individual challenge by a consumer, “where there is doubt about the meaning of a term, the interpretation most favourable to the consumer shall prevail”.

6.49 Article 5 has been implemented in Regulation 7 in the following terms: (1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.

(2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under regulation 12 [by enforcement bodies].

6.50 In our 2005 Report we argued that there was more to article 5 than simply the language used. We thought that the words of article 5 must be read subject to Recital 20, which states that not only should contracts be drafted in plain, intelligible language, but that “the consumer should actually be given an opportunity to examine all the terms”. It follows that terms should not only use the right language but should also be legible and available. Terms cannot be acceptable under the UTD if they are too small to read. We therefore developed the concept of “transparency”, discussed in detail in Part 4.

The consequences of failing to make terms transparent

6.51 This leads to difficult questions about the consequences of failing to make written terms transparent.

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6.52 In 2005 we did not think that a non-transparent term was automatically unfair. On the other hand, we thought that it was “a vital aspect of fairness”.14 _{We thought}

that it should be possible for a term to be unfair principally or solely because it was not transparent.15 Therefore, the fairness test set out in the draft Bill required the court to take into account “the extent to which the term is transparent”.

6.53 In the Issues Paper we explained that there is another consequence of failing to make terms transparent. Enforcement bodies acting under Part 8 of the Enterprise Act 2002 can exercise their powers to remove terms which breach article 5.

6.54 This point is not specified in the UTCCR, but is a consequence of the Consumer Injunctions Directive (CID). The CID requires Member States to introduce mechanisms for proceedings by qualified entities seeking orders requiring the cessation or prohibition of any infringement of any part of the UTD.16 _{The CID}

was implemented by Part 8 of the Enterprise Act 2002, which aims to protect the collective interests of consumers where there is an act or omission contravening a listed directive.17 _{The UTD is a listed directive. Given that article 5 is written in}

mandatory terms (“terms must always be drafted in plain, intelligible language”), it follows that enforcement bodies must be entitled to seek orders requiring the cessation of the use of terms which are not in plain intelligible language.

6.55 We think that the CID must also be read subject to Recital 20, which means that terms should be drafted in a way which would give consumers the opportunity to examine all the terms. This means that the enforcement bodies should have power to bring enforcement action against terms which are illegible or unavailable.

6.56 In the Issues Paper we noted that this power would be particularly helpful in dealing with terms in end user licence agreements (EULAs). In Appendix C we drew attention to complex and unintelligible terms which confused consumers even if they had no substantive legal effect. We thought that enforcement bodies should have clear powers to remove them.18

Our current view

Written terms should be transparent

6.57 It is clearly important that the new legislation should include a specific reference to article 5. We think that this should require terms to be transparent, rather than simply in plain, intelligible language. The legislation should therefore include a statement along the following lines: “written terms offered to the consumer must be transparent”.

14 _{Unfair Terms in Contracts (2005) Law Com No 292; Scot Law Com No 199, para 3.98.} 15 _{Above, para 3.102.}

16 _{Directive 98/27/EC of 19 May 1998 on injunctions for the protection of consumers’}

interests, OJ 1998 L 166/51. This was replaced by the codifying Directive 2009/22/EC of 23 April 2009, OJ 2009 L 110/30: see art 2(1)(a).

17 _{Enterprise Act 2002, Part 8, s 212.}

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6.58 We discussed the definition of “transparency” in detail in Part 4. It requires that terms are in plain, intelligible language, readily available to the consumer and legible. These are not onerous requirements. Whilst we fully accept that not all terms can be prominent, we see no reason why all terms should not be transparent. We think that this is already required by the UTD, and that the point should be made clear.

6.59 We have considered whether widening the words of Regulation 7(1) from “plain, intelligible language” to transparency could be seen as a presentational requirement contrary to the Consumer Rights Directive (CRD) which is a maximum harmonisation measure. We think not, because the CRD must be read subject to the UTD. The requirement that consumers “should actually be given an opportunity to examine all the terms” is already part of the UTD, when read alongside Recital 20.

The consequences of terms not being transparent

6.60 We have considered whether the legislation should specify that terms may be unfair principally or solely because they are not transparent. Given the strong arguments put by many consultees in favour of keeping the current fairness test, we have decided not to make this change. We think that the courts will be strongly influenced by the fact that terms are not transparent, but the fairness test must take account of “all the circumstances attending the conclusion of the contract”. We would not wish to suggest that non-transparent terms are almost always unfair.

6.61 On the other hand, we think it important to clarify that enforcement bodies may use their powers under Part 8 of the Enterprise Act 2002 against terms which are not transparent. This enables regulators to work with traders to improve the way that terms are presented, without being drawn into arguments about whether those terms are fair. Our survey of the problems caused by EULAs shows that there are too many incomprehensible, jargon-ridden terms in use, which confuse consumers and discourage them from relying on their legal rights. Enforcement bodies should be able to take steps to remove them without undue legal argument.

6.62 We think that this is already the law: as explained above, it follows from the requirement in the CID that enforcement bodies may seek orders against an infringement of any part of the UTD. Under Part 8 of the Enterprise Act 2002, the powers are available for “an act or omission which harms the collective interests of consumers” and contravenes a directive listed in Schedule 13.19 _{Nevertheless,}

this consequence is by no means clear from a casual reading of the UTCCR. We think that the issue should be clarified.

6.63 Recommendation 23: Regulation 7(1) of the Unfair Terms in Consumer

Contracts Regulations 1999 should be amended to state that written terms offered to the consumer must be transparent.

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6.64 Recommendation 24: The new legislation should clarify that enforcement

bodies may use their powers under Part 8 of the Enterprise Act 2002 against written terms which are not transparent.

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PART 7