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Assessing plain and intelligible language in the Consumer Rights Act: a role for reading scores?

  • Kathy Conklin (a1), Richard Hyde (a2) and Fabio Parente (a1)
Abstract

Under the Consumer Rights Act 2015 consumer contracts and consumer notices are required to be expressed in plain and intelligible language. This is a difficult concept to capture. Determining whether a contract is expressed in plain and intelligible language involves resource-intensive work by regulators and difficult adjudications by courts. This paper explores whether reading scores present a viable alternative. Can a simple computer program tell a consumer, a business, a regulator or the court that a particular contract is not expressed in plain and intelligible language? The paper begins by exploring the concept and role of plain and intelligible language in the Consumer Rights Act, before considering the ways that reading scores have developed and been used in legal contexts. We then report on the findings of an experimental examination of insurance contracts using a basket of reading scores, using our findings to draw conclusions about the utility of reading scores in determining whether a contract is expressed in plain and intelligible language. We find that reading scores can play a role in such determinations, but that further work is needed to provide appropriate tools for business, regulators and courts to use in assessing plain and intelligible language.

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*Corresponding author. Email: richard.hyde@nottingham.ac.uk
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This work was supported by a Hermes Business Engagement Grant awarded by the University of Nottingham.

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1 Transparency is also required by other legislative instruments. A key example is Regulation 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (GDPR), Art 12(1) (information should be provided in ‘concise, transparent, intelligible and easily accessible form, using clear and plain language’).

2 Brandner, HE and Ulmer, PThe Community Directive on Unfair Terms in Consumer Contracts: some critical remarks on the proposal submitted by the EC Commission’ (1991) 28(3) Common Market Law Review 647 at 656.

3 Consumer Rights Act 2015, s 68 and Sch 3, para 3(5), removing any doubts about the existence of such a power (see Office of Fair Trading v Abbey National [2008] EWHC 875 (Comm), [2008] 2 All ER (Comm) 625 at [86]).

4 RW Benson ‘The end of legalese: the game is over’ (1984–85) 13 Review of Law and Social Change 519 at 547.

5 See Hodges, C Law and Corporate Behaviour: Integrating Theories of Regulation, Enforcement, Compliance and Ethics (Oxford: Hart, 2015) ch 14 part II.

6 See below, text to n 107 et seq.

7 See Kessler, FContracts of adhesion – some thoughts about freedom of contract’ (1943) 43 Columbia Law Review 629 and Leff, AAContract as thing’ (1970) 19 American University Law Review 131.

8 See Director of Fair Trading v First National Bank Ltd [2001] UKHL 52, [2002] 1 AC 481 at [31] per Lord Steyn.

9 The penalty jurisdiction is a notable exception. The development of the doctrine is summarised in Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis (ParkingEye) [2015] UKSC 67, [2016] AC 1172.

10 Grunfeld, CReform in the law of contract’ (1961) 24 MLR 62 at 64.

11 See eg Denning LJ's statement in Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 936 at 940 that the introduction of limitations on the scope of exclusion clauses was ‘[n]otwithstanding earlier cases which might suggest the contrary’.

12 For example the ‘rule’ that prevented the application of exclusion clauses in cases of fundamental breach, disapproved by the House of Lords in Suisse Atlantique Société d'Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361.

13 The contra proferentem rule(s) are retained by the Consumer Rights Act 2015, s 69(1).

14 For example, cases such as Parker v Southeastern Railway (1877) 2 CPD 416; Olley v Marlborough Court [1949] 1 QB 532 and Interfoto v Stilletto [1989] QB 433.

15 All terms in a signed contract will be incorporated (see L'Estrange v Graucob [1934] 2 KB 394).

16 See Law Commission and Scottish Law Commission Report 69: Exemption Clauses – Second Report (Law Commission 1975) para [11].

17 The term must fall within ss 2, 3 or 6, and the liability must relate to the course of a business or the occupation of the premises. A clause in a contract of the type set out in Sch 1 cannot be reviewed.

18 The extended meaning given to such clauses covered by the Act are set out in s 13.

19 See eg Overseas Medical Supplier Ltd v Orient Transport Services Ltd [1999] 2 Lloyd's Rep 273 at 280.

20 Directive 93/13/EEC on unfair terms in consumer contracts.

21 See Brandner and Ulmer, above n 2, and McDonald, EThe emperor's old clauses: unincorporated clauses, misleading terms and the Unfair Terms in Consumer Contracts Regulations’ (1999) 58(2) CLJ 413.

22 A consumer contract is ‘a contract between a trader and a consumer’ (CRA 2015, s 61(1)); ‘consumer’ and ‘trader’ are defined in CRA 2015, s 2(2).

23 CRA 2015, Explanatory Notes para [6].

24 For general consideration of the Act see Barry, D et al. Blackstone's Guide to the Consumer Rights Act (Oxford: Oxford University Press, 2016); Whittaker, SDistinctive features of the new consumer contract law’ (2017) 133 LQR 47 and Gilliker, PThe Consumer Rights Act 2015 – a bastion of European consumer rights?’ (2017) 37(1) Legal Studies 78.

25 See Weatherill, S EU Consumer Law and Policy (Cheltenham: Edward Elgar, 2013) ch 3.

26 The test for fairness was set out by the CJEU in Aziz v Caixa d'Estalvis de Catalunya, Tarragona i Manresa [2013] 3 CMLR 89, which was cited approvingly by the Supreme Court in ParkingEye, above n 9, where the key principles of the Aziz decision are set out at para [105]. The term in question was found to be fair.

27 CRA 2015, s 62(1).

28 CRA 2015, s 67.

29 CRA 2015, s 64(3).

30 A term is prominent if ‘it is brought to the consumer's attention in such a way that an average consumer would be aware of the term’ (CRA 2015, s 64(4)). An average consumer is ‘reasonably well-informed, observant and circumspect’ (see Cartwright, PThe consumer image within EU law’ in Twigg-Flesner, C (ed) Research Handbook on EU Consumer and Contract Law (Cheltenham: Edward Elgar, 2016)).

31 Legibility is a UK law addition to the criteria contained in the Directive (Law Commission Advice to the Department for Business, Innovation and Skills (Law Commission, 2013) at para [4.3]), aimed at ensuring that the ‘consumer [is] actually be given an opportunity to examine all the terms’ (Unfair Terms Directive, recital 20). The legibility concept is beyond the scope of this paper.

32 CRA 2015, s 64.

33 Brandner and Ulmer, above n 2, at 656.

34 CRA 2015, s 68.

35 Information about the terms of trade is essential to the ability of consumers to make an informed choice in the market (see I Ramsay Rationales for Intervention in the Consumer Marketplace (OFT, 1984) para [3.8]).

36 Ramsay, ibid, at paras [3.26]–[3.28]; Collins, HGood faith in European contract law’ (1994) 14(2) Oxford Journal of Legal Studies 229 at 238, who states ‘Clarity is essential for effective market competition between terms. What matters primarily for EC contract law is consumer choice…’

37 Cartwright, P Consumer Protection and the Criminal Law (Cambridge: Cambridge University Press 2001) p 6.

38 In contrast see Bar-Gill, O and Ben-Shahar, ORegulatory techniques in consumer protection: a critique of European consumer contract law’ (2013) 50 (Special Issue) CMLR 109 ‘people do not pay attention to standard forms…’

39 In contrast see Weatherill, SEmpowerment is not the only fruit’ in Leczykiewicz, D and Weatherill, S (eds) The Images of the Consumer in EU Law: Legislation, Free Movement and Competition Law (Oxford: Hart, 2016) pp 212214.

40 Brandner and Ulmer, above n 2, at 656.

41 This assumes that the consumer reads even the core terms of the contract. See Bar-Gill and Ben-Shahar, above n 38, and C Twigg-Flesner ‘The importance of law and harmonisation for the EU's confident consumer’ in Leczykiewicz and Weatherill, above n 39, p 189.

42 Chen-Wishart, MTransparency and fairness in bank charges’ (2010) 126 LQR 157.

43 Department for Exiting the European Union ‘The United Kingdom's exit from and new partnership with the European Union White Paper’ (DExEU, 2017) para [2.3].

44 See Case C-26/13 Kásler and Káslerné Rábai at [42].

45 Case C-96/14 Van Hove v CNP Assurances SA at [40].

46 Ibid, at [47].

47 Of course, a core term that is not transparent, but is fair, binds the individual consumer.

48 [2009] CTLC 188.

49 Ibid, at [62].

50 Ibid, at [63].

51 Ibid, at [62].

52 Office of Fair Trading v Ashbourne Management Services Ltd [2011] CTLC 237 at [158].

53 Office of Fair Trading v Abbey National, above n 3, at [119].

54 Ibid, at [92].

55 Ibid, at [104].

56 Contrast the GDPR, above n 1, recital 58 (‘any information and communication, where processing is addressed to a child, should be in such a clear and plain language that the child can easily understand’) and Art 12(1). This is discussed in Growing Up Digital Taskforce Growing Up Digital: A Report of the Growing Up Digital Taskforce (Children's Commissioner 2017) available at https://www.childrenscommissioner.gov.uk/wp-content/uploads/2017/06/Growing-Up-Digital-Taskforce-Report-January-2017_0.pdf (last accessed 4 November 2018) p 12.

57 See above n 30.

58 H Schulte-Nolke et al (eds) EC Consumer Law Compendium: A Comparative Analysis (2008) p 398.

59 Office of Fair Trading v Abbey National plc, above n 3, at [89].

60 Above n 48, at [31].

61 Made explicit in the Consumer Protection from Unfair Trading Regulations 2008 (CPUTR), reg 2(4).

62 Above n 52, at [155].

63 In the CPUTR 2008, vulnerability exists on account of ‘mental or physical infirmity, age or credulity’ (reg 2(5)).

65 Ashbourne Management Services, above n 52, at [155].

66 Office of Fair Trading v Abbey National plc, above n 3, at [119]; Foxtons, above n 48, at [29].

67 It may be possible that terms that are particularly damaging to vulnerable consumers are misleading actions under CPUTR 2008.

68 Competition and Markets Authority Unfair Contract Terms Explained (CMA, 2015) para [40].

69 Above, text to n 35 et seq.

70 For example in consumer insurance contracts (see O'Sullivan, J and Hilliard, J The Law of Contract (Oxford: Oxford University Press, 7th edn, 2016) p 217).

71 Reflecting the decision in Van Hove, above n 45.

72 Of course, consequences of, for example, exclusion and limitation clauses may be significant in economic terms.

73 Eg an arbitration clause.

74 Leff, AAUnconsionability and the crowd: consumers and the common law tradition’ (1970) 31 University of Pittsburgh Law Review 349 at 356.

75 Collins, H Regulating Contracts (Oxford: Oxford University Press, 1999) pp 8793.

76 See Ramsay, I Consumer Law and Policy: Texts and Materials on Regulating Consumer Markets (Oxford: Hart, 3rd edn, 2012) pp 317320.

77 Hodges, above n 5, ch 14 part II.

78 Such as Office of Fair Trading v Abbey National, above n 3, and Foxtons, above n 48.

79 Ayres, I and Braithwaite, J Responsive Regulation: Transcending the Deregulation Debate (Oxford: Oxford University Press, 1992); and Cartwright, above n 37, pp 220–222.

80 Ramsay, above n 76, pp 320–330 and Bright, SWinning the battle against unfair contract terms’ (2000) 20(3) Legal Studies 331.

81 The ease of reading scores as a tool for assessing compliance is noted by Benson, above n 4.

82 Directive 93/13/EEC, recital 19.

83 Chall, JS and Dale, E Readability Revisited: The New Dale-Chall Readability Formula (Brookline Books, 1995) pp 7980 define a readability formula as ‘an equation which combines those text features that best predict text difficulty. The equation is usually developed by studying the relationship between text features (eg words, sentences) and text difficulty (eg reading comprehension, reading rate and expert judgment of difficulty)’.

84 Such is the function of the reading scores built in most word processing programs (see for example https://support.office.com/en-gb/article/Test-your-document-s-readability-85b4969e-e80a-4777-8dd3-f7fc3c8b3fd2 (last accessed 4 November 2018).

85 Thorndike, EL The Teacher's Word Book (Teacher's College, Columbia University, 1921).

86 Vogel, M and Washburne, CAn objective method of determining grade placement of children's reading material’ (1928) 28(5) The Elementary School Journal 373.

87 Waples, D and Tyler, RW What People Want to Read About (University of Chicago Press, 1931).

88 Ojemann, RThe reading ability of parents and factors associated with the reading difficulty of parent education materials’ (1934) 8 University of Iowa Studies in Child Welfare 11.

89 Flesch, RA new readability yardstick’ (1948) 32(3) Journal of Applied Psychology 221.

90 Kincaid, JP et al. Derivation of New Readability Formulas (Automated Readability Index, Fog Count and Flesch Reading Ease Formula) for Navy Enlisted Personnel (No RBR-8-75) (Naval Technical Training Command, 1975).

91 Gunning, R The Technique of Clear Writing (McGraw-Hill, 1952).

92 McLaughlin, GHSMOG grading – a new readability formula’ (1969) 12(8) Journal of Reading 639.

93 EA Smith and RJ Senter ‘Automated readability index’ (1967) AMRL-TR. Aerospace Medical Research Laboratories (6570th) 1.

94 Coleman, M and Liau, TLA computer readability formula designed for machine scoring’ (1975) 60(2) Journal of Applied Psychology 283.

95 Marchand, Y et al. ‘Automatic syllabification in English: a comparison of different algorithms’ (2009) 52(1) Language and Speech 1.

96 Benson, above n 4.

97 Smith, D and Richardson, GThe readability of Australia's taxation laws and supplementary materials: an empirical investigation’ (1999) 20 Fiscal Studies 321.

98 Sawyer, ANew Zealand's tax rewrite program – in pursuit of the (elusive) goal of simplicity’ (2007) 4 British Tax Review 405, and the articles cited therein.

99 Sutherland, CThe elusive quest for simplicity: measuring and assessing the readability of enterprise agreements, 1993 to 2011’ (2013) 35 Sydney Law Review 349.

100 Miranda v Arizona (1966) 384 US 436.

101 Rogers, R et al. ‘The language of Miranda warnings in American jurisdictions: a replication and vocabulary analysis’ (2008) 32 Law and Human Behavior 124.

102 Hochhauser, MCompliance vs communication’ (2003) 50 Clarity: Journal of International Movement to Simplify Language 11; S Moran, E Luger and T Rodden ‘Literatin: beyond awareness of readability in terms and conditions’ (2014) Proceedings of Ubicomp ’14.

103 Linsley, PM and Lawrence, MJRisk reporting by the largest UK companies: readability and lack of obfuscation’ (2007) 20 Accounting, Auditing & Accountability Journal 620.

104 Growing Up Digital, above n 56.

105 Ibid, p 8.

106 See Fairer Finance ‘Insurance and banking customers need a PhD to understand the small print’ available at https://www.fairerfinance.com/insights/press-releases/insurance-and-banking-customers-need-a-phd-to-understand-the-small-print.

107 See in general Felsenfeld, CThe plain English movement’ (1982) 6 Canadian Business Law Journal 408.

108 See Cogan, JA JrReadability, contracts of recurring use, and the problem of ex post judicial governance of health insurance policies’ (2010) 15(1) Roger Williams University Law Review 93 at 120 fn 105 and see generally Friman, MSPlain English statutes’ (1995) 7 Loyola Consumer Law Reporter 103; Pressman, R Legislative and Regulatory Progress on the Readability of Insurance Policies (Document Design Center, 1979) and Karlin, CJReadability statutes – a survey and a proposed model’ (1980) 28 University of Kansas Law Review 531.

109 Texas Administrative Code title 7 section 90.1045.

110 Code of Laws of South Carolina 1976 title 37 chapter 3 section 202.

111 Montana State Code title 33 chapter 15 section 325. The Montana code provides detailed methodology for use in calculating the Flesch reading ease score.

112 See eg Ontario Securities Commission Bulletin Issue 33/40s4 (October 08, 2010) Appendix A available at http://www.osc.gov.on.ca/en/SecuritiesLaw_rule_20101008_81-101_pos-oscb_3340-sup-4.htm (last accessed 4 November 2018).

113 Sirico, LJ JrReadability studies: how technocentrism can compromise research and legal determinations’ (2008) 26(1) Quinnipiac Law Review 147.

114 Ibid, at 165–166.

115 Documents on file with the authors.

116 For the purpose of the search the traveller was assumed to have no pre-existing conditions, and did not require any special insurance covering winter sports or business travel.

117 n = 113.

118 n = 108.

119 n = 111.

120 n = 112.

121 Bryman, A Social Research Methods (Oxford: Oxford University Press, 2nd edn, 2004).

122 Directive 93/13/EEC, recital 19 provides ‘the terms which clearly define or circumscribe the insured risk and the insurer's liability shall not be subject to [a fairness] assessment’.

123 Collins, HGood faith in European contract law’ (1994) 14(2) Oxford Journal of Legal Studies 229 at 243.

124 See eg Bankers Insurance Co Ltd v South [2003] EWHC 380 (QB), [2003] PIQR P28.

125 For example, buildings and contents insurance, car insurance, travel insurance, pet insurance, gadget insurance, etc.

126 See generally Merricks, WThe Financial Ombudsman Service: not just an alternative to court’ (2007) 15(2) Journal of Financial Regulation and Compliance 135.

127 See eg Ombudsman News Issue 29 Case 29/1.

128 M Eik Michalke koRpus: An R Package for Text Analysis (Version 0.06-5) (2016), available at http://reaktanz.de/?c=hacking&s=koRpus (last accessed 4 November 2018).

129 H Schmid ‘Improvements in part-of-speech tagging with an application to German’ (1995) Proceedings of the ACL SIGDAT-Workshop.

130 This is a particular risk in the legislative approach taken in those States in the USA where one formula is used (see above text to n 107 et seq).

131 As in the Montana State Code, above n 111.

132 Creating a new reading score methodology tends to be the response in the linguistics literature when identifying consistency problems with the scores or the calculators (see, for example, M Sinha ‘New readability measures for Bangla and Hindi texts’ (2012) Proceedings of COLING 2012: Posters 1141, 1144).

133 Collins, above n 123.

134 Directive 93/13/EEC, recital 19.

135 Davis, JProtecting consumers from overdisclosure and gobbledygook: an empirical look at the simplification of consumer-credit contracts’ (1977) 63(6) Virginia Law Review 841.

136 See Better Regulation Executive and National Consumer Council Warning: Too Much Information Can Harm (Final Report, November 2007).

137 Masson, M and Waldron, MAComprehension of legal contracts by non-experts: effectiveness of plain language redrafting’ (1994) 8 Applied Cognitive Psychology 67.

138 This is in contrast to Greene, E et al. ‘Do people comprehend legal language in wills’ (2012) 26(4) Applied Cognitive Psychology 500.

139 As suggested by Greene et al, ibid.

140 See above, text to n 107 et seq.

141 Sirico, above n 113, at 148, and see the critique of the Microsoft Word at text to n 114 et seq.

142 Above, text to n 86.

143 See Redish, JReadability formulas have even more limitations than Klare discusses’ (2000) 24(3) ACM Journal of Computer Documentation 132 for a more in-depth analysis. See also Selzer, JReadability is a four letter word’ (1981) 18(4) International Journal of Business Communication 23.

144 Crossley, SA et al. ‘Text readability and intuitive simplification: a comparison of readability formulas’ (2011) 23(1) Reading in a Foreign Language 86.

145 Discussed and rejected by Benson, above n 4, at 551 et seq.

146 Dr Seuss, Green Eggs and Ham (HarperCollins, 2003) has a Flesh-Kincaid grade level of -1.3, but only using single syllable words in short sentences (the only polysyllabic word in Green Eggs and Ham is ‘anywhere’) is unlikely to be sufficient to explain the economic effects of a consumer contract.

147 As alluded to by A Smith J in Office of Fair Trading v Abbey National, discussed above text to n 55.

148 Pau, C et al. ‘Complexity of the New Zealand tax laws: an empirical study’ (2007) 22(1) Australian Tax Forum 59 at 89.

149 Sirico, above n 113.

150 Ibid, at 170.

151 Funkhouser, RG and Maccoby, NCommunicating specialized science to a lay audience’ (1971) 21 Journal of Communication 58.

152 Funkhouser, RGFunctional evaluation of consumer documents’ (1983) 20(3) Journal of Business Communication 59 at 60 argues that reading scores that are ‘developed for ease of application…’, particularly by computers, are removed from ‘the measurement of actual vocabulary difficulty’, reducing their usefulness in measuring consumer understanding.

153 For example, in cross-border transactions, where the consumer may not be a native language speaker, a reading score is unlikely to capture whether the clause would be plain and intelligible to a second language speaker.

154 Growing Up Digital, above n 56, p 8, fn 2.

155 Instagram Terms of Use, clause 1, available at https://help.instagram.com/478745558852511 (last accessed 4 November 2018). The age limit of 13 appears generally in social media terms of use (see Snapchat (https://www.snap.com/en-GB/terms/, clause 1); Facebook (https://www.facebook.com/terms, clause 4(5)); and Twitter (https://twitter.com/tos, clause 1).

156 For example, eye-tracking. See Conklin, K, Pellicer-Sánchez, A and Carrol, G An Introduction to Eye-tracking: A Guide for Applied Linguistics Research (Cambridge: Cambridge University Press, 2017).

157 Davis, above n 135.

This work was supported by a Hermes Business Engagement Grant awarded by the University of Nottingham.

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