Defining Unfair Terms in Consumer Contracts – Crystal Ball Gazing? Director General of Fair Trading v First National Bank plc
| Author | Meryll Dean |
| Published date | 01 September 2002 |
| Date | 01 September 2002 |
| DOI | http://doi.org/10.1111/1468-2230.00407 |
allowed to informational defects and also a recognition, at some level, that, in some
sense, they may generate more extensive unfairness.
Conclusion
The clear indications by the House of Lords of a generally restrictive approach to
the ‘core’ is to be noted and applauded. Its full working out, to avoid the
‘‘frustration’ of the the main purpose of the scheme . . . by endless formalistic
arguments as to whether a provision is a definitional or an exclusionary
provision’63 or other categorisational difficulties, is still to be fully explored, but
a way forward can be suggested. In relation to unfairness, First National Bank has
provided some useful general clarification of the meaning to be given to ‘good
faith’. It leaves open questions as to the effectiveness of the Regulations to address
informational defects which involve the interaction of the term in question and
external factors, particularly other legislation.
Defining Unfair Terms in Consumer Contracts – Crystal
Ball Gazing? Director General of Fair Trading vFirst
National Bank plc
Meryll Dean*
In Director General of Fair Trading vFirst National Bank plc the House of Lords
has, for the first time, considered the unfairness of a contractual term under the
1
The decision represents
an important step toward further integrating the concept of good faith into English
law. However, by not making an Article 234 reference to the European Court of
Justice (ECJ) for a preliminary ruling on the meaning of ‘unfair’, the House of
Lords engaged in informed anticipatory definition, thereby infringing the
interpretative monopoly of the ECJ in the area of Community law.
2
63 ibid Lord Steyn, para 34.
* Senior Lecturer in Law, Sussex University. I would like to thank Professor Malcolm Ross for his
comments on an earlier draft and Fabian Leinen for his guidance on German law.
Terms in Consumer Contracts (EEC) 93/13, OJ 1993 L95 p29. The 1994 Regulations have now been
replaced by the Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083. The objective
and substance of the Regulations remains the same but there are differences in the detail which are
aimed at more accurately reflecting the text of the original Directive. See S. Bright ‘Winning the
Battle Against Unfair Contract Terms’ (2000) 20 LS 331. The facts of this case fell to be decided
under the earlier provisions, therefore all references in this article, unless otherwise stated, are to the
1994 Regulations.
2InOceano Grupo Editorial SA vQuintero C-240/98 to 244/98, 27 June 2000, para. 22–26, the ECJ
held that national courts have the power to evaluate the fairness of a term or terms in disputes where
the amount at issue is small and it is therefore quite possible that the lawyers’ fees are higher than that
September 2002] DGFT vFirst National Bank (Dean)
ßThe Modern Law Review Limited 2002 773
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