Office of Fair Trading v Foxtons Ltd

A collective challenge to standard consumer contract terms proceeds on the basis of a typical consumer and typical circumstances. An individual challenge must address the actual consumer, the actual contract and all circumstances attending its conclusion. A finding of unfairness in a collective challenge does not determine the outcome of every individual case.

An injunction under regulation 12 of the Unfair Terms in Consumer Contracts Regulations 1999 may restrain future use of unfair terms, including similar terms or terms having like effect. It cannot generally prevent a supplier from relying on a term in an existing contract where the supplier seeks to argue that the individual circumstances are materially different. Declaratory relief may be granted, but it must not purport to determine the rights of all consumers in individual cases.

The Office of Fair Trading brought a collective Part 8 claim against Foxtons concerning standard residential lettings terms. The challenged provisions required landlords to pay renewal commission, sales commission and commission after a property was sold, and were said to be unfair and insufficiently clear under the Unfair Terms in Consumer Contracts Regulations 1999.

Foxtons applied to strike out parts of the relief claimed, including injunctions and declarations extending to existing contracts and every consumer who had entered into such a contract. The central issue was the proper scope of a collective challenge under regulation 12 and the extent to which the court could determine or restrain matters arising in later individual challenges.

1. Nature of the proceedings. The claim was a collective or pre-emptive challenge to standard terms. Unlike an individual challenge, it would be assessed by reference to a typical consumer and typical circumstances. The court would not determine the facts of individual complaints or the actual circumstances attending individual contracts.
2. Different outcomes possible. A term might be unfair in a collective challenge but fair in an individual case, or vice versa. The individual assessment must consider the actual parties, the actual circumstances and the other terms of the contract. The decision in Bryen & Langley Ltd v Boston [2005] EWCA Civ 973 illustrated that special facts could make it impossible to find a breach of fair dealing.
3. Injunction. Regulation 12 permitted an injunction against use or recommendation for use of an unfair term drawn up for general use, including similar terms or terms having like effect. It did not permit an injunction preventing Foxtons from enforcing or relying on a term in every existing contract where Foxtons wished to contend that the particular consumer or circumstances differed materially from the typical case. Such relief would determine individual rights without applying the requirements of the Directive and Regulations to the individual facts.
4. Declarations. The OFT had locus to seek an injunction and the court could grant useful declaratory relief in connection with the collective determination. A declaration concerning whether terms were in plain and intelligible language could be appropriate because that issue depended principally on the language used. A declaration that terms were not binding on every consumer who had ever contracted on them was too wide.
5. Procedure and evidence. The claim could continue under CPR Part 8. Complaints could be used as illustrations without determining the individual cases. Further particulars should be sought under CPR Part 18. The court declined to order disclosure of unredacted complaint documents where the individual cases were not to be explored.
6. Orders. The words seeking to restrain Foxtons from enforcing, attempting to enforce or otherwise relying on the terms were struck out from paragraph 15(c). Paragraph 15(a) was struck out. Paragraph 15(b), paragraph 15(e), and the references to previous equivalent terms were retained.

First instance decision. The judgment records earlier authorities concerning collective challenges under the Regulations but does not state any appellate history for the present proceedings.