There has, in South African legislation, been a definite movement towards the use of plain language. For example, the South African National Credit Act, No. 34 of 2005 (the “NCA”) and the Consumer Protection Act, No. 68 of 2008 (the “CPA”) deal with and encourage the use of plain language. However, apart from the NCA and the CPA, the Companies Act, No. 71 of 2008 (the “CA”), the Short-term Insurance Act, No. 53 of 1998 and the Long-term Insurance Act, No. 52 of 1998, all in some way deal with the use of plain language (for example, the CA gives shareholders the right to plain language in various company documents). A guideline document has also been drafted by the Financial Services Board (the Treating Customers Fairly Roadmap) in terms of which plain language is regarded as an integral part to ensuring fairness to customers of financial services firms.
The NCA was the first South African law to include a definition of plain language. Section 64 of the NCA, titled “Right to information in plain and understandable language”, provides as follows:
“(1) The producer of a document that is required to be delivered to a consumer in terms of this Act must provide that document-
(a) in the prescribed form, if any, for that document; or
(b) in plain language, if no form has been prescribed for that document.
(2) For the purposes of this Act, a document is in plain language if it is reasonable to conclude that an ordinary consumer of the class of persons for whom the document is intended, with average literacy skills and minimal credit experience, could be expected to understand the content, significance, and import of the document without undue effort, having regard to-
(a) the context, comprehensiveness and consistency of the document;
(b) the organisation, form and style of the document;
(c) the vocabulary, usage and sentence structure of the text; and
(d) the use of any illustrations, examples, headings, or other aids to reading and understanding.
(3) The National Credit Regulator may publish guidelines for methods of assessing whether a document satisfies the requirements of subsection (l)(b).
(4) This section does not apply to a developmental credit agreement if-
(a) the National Credit Regulator has pre-approved the form of all documents to be used by the credit provider for such credit agreements in terms of this Act; and
(b) the credit provider has used only those pre-approved forms in dealing with the particular consumer.
(5) When pre-approving any form of documents as contemplated in subsection (4), the National Credit Regulator must balance the need for efficiency of the credit provider with the principles of subsection (l)(b).” (Own emphasis added).
The CPA came into effect on 31 March 2011. Section 22 of the CPA, titled “Right to information in plain and understandable language”, provides as follows:
“(1) The producer of a notice, document or visual representation that is required, in terms of this Act or any other law, to be produced, provided or displayed to a consumer must produce, provide or display that notice, document or visual representation –
(a) in the form prescribed in terms of this Act or any other legislation, if any, for that notice, document or visual representation; or
(b) in plain language, if no form has been prescribed for that notice, document or visual representation.
(2) For the purposes of this Act, a notice, document or visual representation is in plain language if it is reasonable to conclude that an ordinary consumer of the class of persons for whom the notice, document or visual representation is intended, with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance and import of the notice, document or visual representation without undue effort, having regard to –
(a) the context, comprehensiveness and consistency of the notice, document or visual representation
(b) the organisation, form and style of the notice, document or visual representation;
(c) the vocabulary, usage and sentence structure of the notice, document or visual representation; and
(d) the use of any illustrations, examples, headings, or other aids to reading and understanding.” (Own emphasis added)
Section 50 of the CPA, which deals with “Written consumer agreements”, further provides that:
“(1) The Minister may prescribe categories of consumer agreements that are required to be in writing.
(2) If a consumer agreement between a supplier and a consumer is in writing, whether as required by this Act or voluntarily—
(a) it applies irrespective of whether or not the consumer signs the agreement; and
(b) the supplier must provide the consumer with a free copy, or free electronic access to a copy, of the terms and conditions of that agreement, which must—
i. satisfy the requirements of section 22; and
ii. set out an itemised break-down of the consumer’s financial obligations under such agreement.
(3) If a consumer agreement between a supplier and a consumer is not in writing, a supplier must keep a record of transactions entered into over the telephone or any other recordable form as prescribed.” (Own emphasis added)
Plain language is, furthermore, an important consideration in determining whether a particular term of an agreement is considered unfair to the consumer in terms of section 48 of the CPA which, under the heading “Unfair, unreasonable or unjust contract terms”, provides that:
“(1) A supplier must not—
(a) offer to supply, supply, or enter into an agreement to supply, any goods or services—
i. at a price that is unfair, unreasonable or unjust; or
ii. on terms that are unfair, unreasonable or unjust;
(b) market any goods or services, or negotiate, enter into or administer a transaction or an agreement for the supply of any goods or services, in a manner that is unfair, unreasonable or unjust; or
(c) require a consumer, or other person to whom any goods or services are supplied at the direction of the consumer—
i. to waive any rights;
ii. assume any obligation; or
iii. waive any liability of the supplier,
on terms that are unfair, unreasonable or unjust, or impose any such terms as
a condition of entering into a transaction.
(2) Without limiting the generality of subsection (1), a transaction or agreement, a term or condition of a transaction or agreement, or a notice to which a term or condition is purportedly subject, is unfair, unreasonable or unjust if—
(a) it is excessively one-sided in favour of any person other than the consumer or other person to whom goods or services are to be supplied;
(b) the terms of the transaction or agreement are so adverse to the consumer as to be inequitable;
(c) the consumer relied upon a false, misleading or deceptive representation, as contemplated in section 41 or a statement of opinion provided by or on behalf of the supplier, to the detriment of the consumer; or
(d) the transaction or agreement was subject to a term or condition, or a notice to a consumer contemplated in section 49 (1), and—
i. the term, condition or notice is unfair, unreasonable, unjust or unconscionable; or
ii. the fact, nature and effect of that term, condition or notice was not drawn to the attention of the consumer in a manner that satisfied the applicable requirements of section 49.”
The extent to which the plain language requirement is satisfied is one of the factors that must be considered by the court when considering the fairness of a term. In this regard, section 52 of the CPA, under the heading “Powers of court to ensure fair and just conduct, terms and conditions”, provides as follows:
“(1) If, in any proceedings before a court concerning a transaction or agreement between a supplier and consumer, a person alleges that—
(a) the supplier contravened section 40, 41 or 48; and
(b) this Act does not otherwise provide a remedy sufficient to correct the relevant prohibited conduct, unfairness, injustice or unconscionability,
the court, after considering the principles, purposes and provisions of this Act, and the matters set out in subsection (2), may make an order contemplated in subsection (3).
(2) In any matter contemplated in subsection (1), the court must consider—
(a) the fair value of the goods or services in question;
(b) the nature of the parties to that transaction or agreement, their relationship to each other and their relative capacity, education, experience, sophistication and bargaining position;
(c) those circumstances of the transaction or agreement that existed or were reasonably foreseeable at the time that the conduct or transaction occurred or agreement was made, irrespective of whether this Act was in force at that time;
(d) the conduct of the supplier and the consumer, respectively;
(e) whether there was any negotiation between the supplier and the consumer, and if so, the extent of that negotiation;
(f) whether, as a result of conduct engaged in by the supplier, the consumer was required to do anything that was not reasonably necessary for the legitimate interests of the supplier;
(g) the extent to which any documents relating to the transaction or agreement satisfied the requirements of section 22;
(h) whether the consumer knew or ought reasonably to have known of the existence and extent of any particular provision of the agreement that is alleged to have been unfair, unreasonable or unjust, having regard to any—
i. custom of trade; and
ii. any previous dealings between the parties;
(i) the amount for which, and circumstances under which, the consumer could have acquired identical or equivalent goods or services from a different supplier; and
(j) in the case of supply of goods, whether the goods were manufactured, processed or adapted to the special order of the consumer.
(3) If the court determines that a transaction or agreement was, in whole or in part, unconscionable, unjust, unreasonable or unfair, the court may—
(a) make a declaration to that effect; and
(b) make any further order the court considers just and reasonable in the circumstances, including, but not limited to, an order—
i. to restore money or property to the consumer;
ii. to compensate the consumer for losses or expenses relating to—
(aa) the transaction or agreement; or
(bb) the proceedings of the court; and
iii. requiring the supplier to cease any practice, or alter any practice, form or document, as required to avoid a repetition of the supplier’s conduct.
(4) If, in any proceedings before a court concerning a transaction or agreement between a supplier and a consumer, a person alleges that an agreement, a term or condition of an agreement, or a notice to which a transaction or agreement is purportedly subject, is void in terms of this Act or failed to satisfy any applicable requirements set out in section 49, the court may—
(a) make an order—
i. in the case of a provision or notice that is void in terms of any provision of this Act—
(aa) severing any part of the relevant agreement, provision or notice, or alter it to the extent required to render it lawful, if it is reasonable to do so having regard to the transaction, agreement, provision or notice as a whole; or
(bb) declaring the entire agreement, provision or notice void as from the date that it purportedly took effect; or
ii. in the case of a provision or notice that fails to satisfy any provision of section 49, severing the provision or notice from the agreement, or declaring it to have no force or effect with respect to the transaction; and
(b) make any further order that is just and reasonable in the circumstances with respect to that agreement, provision or notice, as the case may be.” (Own emphasis added)
