Companies that hide charges in small print should be taken to court, says Law Commission

Companies which tuck away hidden charges in the small print should face being taken to court, the Law Commission has recommended.

In a report published today on Unfair Terms in Consumer Contracts, it says that British courts should be empowered to examine the fairness of hidden costs from the likes of budget airlines, estate agents and gyms.

David Hertzell, Law Commissioner for England and Wales, said: "The current law is baffling - so much so that consumers and regulators are reluctant to challenge unfair charges.

"Both traders and consumers need clearer law. If a price is transparent and prominent, the courts should not interfere - but other charges need to be fair."

With millions of people now turning to price comparison sites before buying, traders are being forced to advertise low headline rates to attract consumers in, before hitting them with various other charges to ensure they make a decent profit.

The Law Commission said the problem with the small print is not "just about font size" - it also includes poor layout, densely phrased paragraphs and legal jargon.

Another recommendation in the report is for courts to have more powers to remove legal jargon from computer software contracts.

The end user licence agreements - designed to limit the product's use - should be expressed in "plain, intelligible language".

Professor Hector MacQueen, Scottish Law Commissioner, which jointly published the report, said: "The software industry has argued that consumer legislation does not apply to some end user licence agreements as they are 'licences' rather than 'contracts'. Our recommendations close this supposed loophole.”