The law touches all aspects of our everyday lives. But rarely so crucially as in the key relationships we have with others – with the landlord we pay for shelter, the employer we rely on for our income, the grocer from whom we buy food.
To them the law says, “you have freedom to contract – but only so far.” For you work you shall be paid a minimum wage. Your landlord cannot turf you out of your home on a whim. You will be protected from food that is not safe to eat.
But it’s never that simple of course. Legal protections created in theory are often found wanting in practice. What use is a right unless we know it exists? How can we assert it when confronted with a powerful and obdurate counterparty? Is the law strong enough to cause the counterparty to care whether he breaks it?
Sitting on my desk is a contract between a major passenger transportation firm – I will not name it – and the drivers it uses. It imposes an obligation on drivers to indemnify the firm against the obligation to pay minimum wage or national insurance contributions.
Think about that for a second. The obligation to pay minimum wage is the firm’s. So too the obligation to pay employer’s NICs. The law is clear these obligations cannot be transferred. But still the contract pretends that, if the driver asserts the protections Parliament has given to him, the cost will fall on him. Along with the firm’s legal costs of resisting the assertion. And of meeting and defending any action brought by the Government. A failure to pay minimum wage can carry criminal sanction – and the contract also puts the cost of defending that prosecution on the driver.
And clauses enacting a pretence are not uncommon. Assured shorthold tenancies – the most common type of tenancy agreement for those obliged to rent from private sector landlords – frequently pretend the landlord has a power to terminate a lease which ignores the protections given to tenants by the Housing Act 1988.
When drafting contracts for the powerful which regulate relationships with ‘normal’ people – in leases, in consumer contracts and, most often, in contracts with workers – lawyers insert clauses that are not merely unenforceable but which they know to be unenforceable.
Not because they lawfully protect that lawyer’s clients. The fact they are unenforceable means they offer no legal protection. They are drafted for a different purpose. Their aim is to trick those who do not know the law. They attempt to fool the unsophisticated into believing they do not have the rights Parliament has given them. Their purpose is to undermine the rule of law and to thwart statutory protections.
But solicitors have a professional obligation to “uphold the rule of law and the proper administration of justice” and “to act with integrity”. Barristers similarly have obligations to “act with honesty and integrity” and to “not knowingly or recklessly mislead or attempt to mislead anyone.”
For myself, I do not see how the drafting of an unenforceable clause in a contract with a counterparty who is a regular person can be said to be consistent with these obligations. This practice has gone on for too long – it is time for regulators to remind lawyers of their duties.
[This piece was first published by The Times on 19 July 2018].
I completely agree with you on this.
The only ‘protection’ these clauses give is a dishonest protection, and any decent lawyer would also want to advise their clients that using clauses like this will lead to reputational or regulatory harm.
To flesh out the solicitor regulatory requirements still further, also check out section 4 of our code of conduct:
“You must achieve these outcomes:
… you do not take unfair advantage of third parties in either your professional or personal capacity…”
“Acting in the following way(s) may tend to show that you have not achieved these outcomes and therefore not complied with the Principles:
…taking unfair advantage of an opposing party’s lack of legal knowledge where they have not instructed a lawyer…”