Employment: Unfair Contract Terms
House of Lords

Baroness Wilcox (Parliamentary Under Secretary of State, Business, Innovation and Skills; Conservative)

My honourable friend the Minister for Employment Relations, Consumers and Postal Affairs (Norman Lamb) has today made the following Statement.

In preparation for a proposed overhaul of consumer rights, I have asked the Law Commission and Scottish Law Commission to review and update the recommendations they made in 2005 on unfair terms in contracts and in particular to reconsider their recommendations in relation to ancillary and contingent charges in the light of recent court judgments. The terms of reference are as follows:

to review and update the recommendations made by the two Law Commissions in their 2005 Report on Unfair Terms in Contracts (Law Com No 292; Scot Law Com No 199) in so far as they affect contracts made between businesses and consumers;

in particular to examine Article 4(2) of the Council Directive 93/13/EEC on Unfair Terms in Consumer Contracts on terms exempt from review in the light of recent case law; and

following full consultation with relevant stakeholders, to advise BIS on how best to implement Article 4(2), bearing in mind the following:

the need to ensure that the UK meets its minimum harmonisation obligations;the desirability of a single consumer regime to incorporate both the Unfair Terms in Consumer Contracts Regulations 1999 and the Unfair Contract Terms Act 1977, without reducing the existing level of consumer protection; andthe need for clarity.

The Law Commissions aim to open consultation by the end of July 2012 and publish their full advice by the end of March 2013. I will inform Parliament on both these occasions and place copies of the Law Commissions' consultation paper and final report in the House Library. Further details will also be available from the Law Commission website at lawcommission.justice.gov.uk.