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Spring Budget 2017: UK government to seek 'clearer, simpler and shorter' consumer contract terms

Businesses will be expected to make the terms and conditions of their consumer contracts "clearer, simpler and shorter" in future, under UK government plans.08 Mar 2017

In his Spring Budget 2017 announcement on Wednesday, UK chancellor Philip Hammond said the government plans to outline proposals to "examine markets that are not working efficiently or fairly" and announced that it intends to look at the issue of consumer contracts.

"The Budget sets out the initial steps the government will take to make a difference for consumers, including … considering how to make terms and conditions clearer, simpler and shorter for consumers to engage with, building on the call for evidence on terms and conditions last year," the Budget paper said.

Expert in commercial contracts Rami Labib of Pinsent Masons, the law firm behind, said that the government and regulators could push for greater standardisation in consumer contracts in the future.

"There has been an increasing focus on consumer protection law by the government in recent times, with the introduction of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations in 2013 and then the general streamlining of consumer laws in the Consumer Rights Act, which came into force on 1 October 2015," Labib said. "The latest announcements show that consumer law issues are again at the forefront of the agenda. Businesses that rely on complex terms and legalese may not be deemed to be compliant."

"In future it may be that policy makers look for greater uniformity of consumer contracts. There is already a degree of standardisation across some industries and sectors. In the future, it may be that the consumer law principles of fairness, reasonableness and transparency drive a requirement for greater standardisation of consumer contracts to make it easier for consumers to understand and compare offerings from different companies," he said.

In the Budget announcement, the government also said it intends to change the law "at the earliest opportunity" to allow the Competition and Markets Authority (CMA) and other consumer enforcement agencies to ask the courts to serve businesses that breach consumer protection laws with "civil fines", it said.

"This will be a strong and effective deterrent, and will enable consumer bodies to take tough action against firms that mislead or mistreat consumers," the Budget paper said.

The government will also work on proposals which will "protect consumers from facing unexpected payments when a subscription is renewed or when a free trial ends", it said.