The Law Commission and the Scottish Law Commission have started a consultation on the clarification of consumer law. The focus of the consultation is terms in consumer contracts which are exempt from review under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).
The Law Commissions are consulting on the following proposed reforms:
1) Price terms should be exempt from review under UTCCR only if the term is transparent (meaning that the term is in plain and intelligible language) and prominent from an objective perspective taking into account the “average consumer” (which is someone who is reasonably well informed, reasonably observant and circumspect). The exemption would therefore not apply to terms merely because they were incidental or ancillary to the main purpose of the contract. In addition, terms giving the business discretion to change the price after the consumer is bound or early termination charges or default charges would be reviewable for fairness (but not deemed to be automatically unfair).
2) Terms that seek to give business the discretion to change the main subject matter of a contract after the consumer is already bound should not be exempt from review under UTCCR; rather, the subject matter should be transparent and prominent in order to be exempt from review under UTCCR.
3) Amending UTCCR in order to make it clearer for a consumer to understand.
4) Except where a claim is brought by an enforcement authority, businesses should be responsible for proving that a term is “fair”; at present, that burden of proof falls on a consumer to prove that a term is “unfair”.
The consultation closes on 25 October 2012.