EE.T-Mob.Orange. Change T&C From 26th March 2014

hammersfaniow

sshariff wrote: »

Good luck to those whose CISAS cases are still pending. It's all down to how well you defend your case, especially your comments to EEs defence.

Finally another thank you note to RandomCurve for all his efforts:)

I went to CISAS and I'm waiting for EE's defence, they have until the 1st May to respond. Will we be expected to reply to their defence ? I thought it was just taken by an adjudicator after they EE has submitted their defence ?

My complaint was regarding T & C's change on a contract taken post Oct '12

jon1555

hammersfaniow wrote: »

I went to CISAS and I'm waiting for EE's defence, they have until the 1st May to respond. Will we be expected to reply to their defence ? I thought it was just taken by an adjudicator after they EE has submitted their defence ?

My complaint was regarding T & C's change on a contract taken post Oct '12

You'll 100% Want to respond to the defence.

You can find the template at post 688 & 689

https://forums.moneysavingexpert.com/discussion/4888862

It can take up to 5 days for cisas to email the defence from EE once they receive it.

Dave92en

OK I have drafted my reply to the defence. Would you mind proof reading before I send it off RC?

Ref post number: 1424
PART 1/2

EE state that they believe this falls outside of the remit of CISAS, however as the change in T&Cs will have a direct impact on the amount EE will bill me for the provision of telecommunications service it clearly is connected with both the billing for and provision of telecommunications services and therefore should fall within CISAS’ remit.


Ofcom have confirmed this - determination of material detriment - should fall within the remit of an ADR in a letter dated 12th March from Lynn Parker (Director of Consumer Protection) who can be contacted at lynn.parker@ofcom.org.uk for confirmation:


“Under sections 52 and 54 of the Act, and through General Condition 14.5, we require all Communications Providers (“CPs”) to be a member of an approved ADR scheme. We currently approve two schemes: Ombudsman Services: Communications (”OS”) and the Communications and Internet Services Adjudication Scheme (“CISAS”) (“the Schemes”). We cannot and do not intervene in or overturn decisions made by the Schemes. Section 54 (2)(a) of the Act requires Ofcom to be independent from them.


Subject to the above, it appears to Ofcom that your dispute with EE is about the application of General Condition 9.6 (“GC 9.6”). That is, whether it has made a materially detrimental modification to its terms and conditions and properly applied that Condition. You say it has made such a change but not complied with the Condition. It disputes that.


If that is so, that appears to Ofcom a matter that, in principle, may be subject to ADR. We have corresponded with CISAS, which agrees, and, we understand, has told EE so (meaning it should issue letters enabling access to ADR).


You should now pursue the matter with EE and CISAS. It will be for CISAS to decide whether it can consider your specific case (i.e. is it a case falling within the general principle described in the previous paragraph). If so, it will also decide if your complaint has merit. Clearly, these points depend on the specific facts. The outcome is not guaranteed and Ofcom has no role in it.”



I would refer the adjudicator to my claim in the main; however I would like to make an open statement and respond on a few general points regarding the “thrust” of EEs defence document as follows:




Opening statement
I entered into my contract on 05/01/2013, at that time EE never made it clear that the contract contained a price variation clause; despite this I have abided by the Contract Terms and Conditions and relevant Ofcom regulation. In early February 2014 EE advised me of a change in T&Cs which I believe is LIKELY to be to my Material Detriment. Under the T&Cs and Ofcom Regulation 9.6 the ONLY options for me now are to either accept the change or request a penalty free cancellation. I have decided that - for the reasons stated - the change is LIKELY to be of material detriment, and I wish EE to abide by the contract terms and Ofcom regulations (as I have) and grant a penalty free cancellation. This case revolves solely around if the change in T&Cs is LIKELY to be of Material Detriment.


• Complexity
• Right to amend the contract
• Interpretation of Material Detriment
• Reasons for compensation
And will also refer to some specific points in EEs defence by Paragraph number.

Complexity
Throughout their defence EE have tried to assert that this claim involves complex issues of law, however as the contract is a standard form contract with a consumer there is a requirement on EE to ensure that the contract is not complex, and is written in plain and intelligible language. If EE have made their contract complex, or have used complex and unintelligible language then this is evidence of EE not acting in good faith, and brings the protection offered to me as consumer under the UTCCRs into play.
To determine this dispute the following is required:


• An understanding of EEs T&Cs “old” and “new”
• An appreciation of the Unfair Terms in Consumer Contracts Regulations (UTCCRs), and
• A knowledge of GC 9.6 and USD 20/22
All of which will be within the knowledge of an adjudication service tasked with adjudicating on disputes involving telecommunication providers.
Right to amend the contract
EE have referenced their right to amend T&Cs and this is not being disputed, however EE will be aware (and do reference in their defence) that with a fixed term standard form contract there are numerous legislative and regulatory safeguards to protect the consumer and just because EE has included Terms that allow it to change “T&Cs for any good reason” does not mean that these are necessarily enforceable,. Additionally as a Mobile phone contract Terms and condition are not only subject to the UTCCRs but also Ofcom General Conditions (and in particular GC 9.6) and where necessary the source documentation for GC 9.6 which is USD 20/2 (which clearly states that during a fixed term a modification to the T&Cs must give the consumer a corresponding right to withdraw from the contract penalty free).
.
What does material detriment mean?
EE have made much that CISAS cannot determine what Material Detriment means. However I believe that the meaning can be worked out relatively easily. At Paragraph 36.3 EE states that the meaning of Material Detriment needs to be established both as a matter of contractual construction and by reference to the regulatory context. However the use of the word “AND” is misleading as if the change is likely to be of Material detriment to me in EITHER context then I have a right to a penalty free termination of my contract.

What does material detriment mean – Regulatory Context?
In the regulatory context regardless of what is in EEs T&Cs under GC 9.6 I have a right to terminate my contract penalty free as follows:



GC9.6:
“The Communications Provider shall:
(a) give its Subscribers adequate notice not shorter than one month of any modifications likely to be of material detriment to that Subscriber;
(b) allow its Subscribers to withdraw from their contract without penalty upon such notice; and
(c) at the same time as giving the notice in condition 9.6(a) above, shall inform the Subscriber of its ability to terminate the contract if the proposed modification is not acceptable to the Subscriber.”


EE are keen to point out there is no guidance within GC9.6 as to what constitutes Material Detriment, but that meaning can be determined by understanding why the Term “likely to be of Material Detriment” was included within GC 9.6 and guidance from the source documentation of GC 9.6.


In the Ofcom publication “ Price rises in fixed term contracts - Decision to issue Guidance on General Condition 9.6”, Published in November 2013 Ofcom explain the rationale for including the term ““likely to be of Material Detriment” at paragraph 3.6 as follows:


“…..Ofcom and, before us, OFTEL has included a material detriment requirement in the relevant part of GC9. Our intention was to reflect our general duties and principles of good administration and proportionality in particular. We sought, in light of these, not to rule out contract variations altogether. For example, those beneficial to, or having a neutral impact on, a subscriber.”


So to determine if this change is likely to be of Material Detriment to me we only need to consider if the change is beneficial or neutral to me. Obviously if an impact of a T&C is neutral (both for the company and the consumer) then there is absolutely no point in EE going to the trouble and expense of making the change (apart from legislative reasons – which are not factor in this case). In this case the benefit is not neutral as whilst I may benefit from having clearer T&Cs that benefit is outweighed by the benefit accruing to EE in that I now have less scope to challenge EE on future price increases, so the “neutral” element can be discount in this case. This only leaves the question of if the change is to my benefit, and if it is not to my benefit then – by Ofcom’s definition – it is to my material detriment.


Whilst EE have tried to “sell” this change as a benefit to me as it makes the terms clear, this very fact reduces my potential to challenge future price rises- which EE acknowledge at paragraph 25“..reduces the scope for disputes regarding whether a price change gives rise to a right to cancellation. If my potential rights to a penalty free cancellation are reduced the change is obviously not to my benefit – in fact it is of a significant material detriment. Additionally at Paragraph 33 of the defence EE concede that there may be a marginal determent “ ....to the extent that the claimant has suffered any marginal detriment, such detriment is not material”. Both Paragraphs 25 and 33 of EEs defence are clear evidence that the change is neither neutral or to my benefit and therefore as per Ofcom’s rationale for including the term “likely to be of Material detriment” at paragraph 3.6 of their publication any change which is neither neutral or not to my benefit is to my Material detriment. Therefore this change gives rise to my right to a penalty free cancellation under GC 9.6, as per my CISAS claim –the change is likely to be of Material Detriment to me.


The above interpretation of Material detriment by Ofcom in relation to a change in T&Cs is entirely consistent and therefore reinforced by the USD 20/2 and can also be verified by reference to the Ofcom publication “ Price rises in fixed term contracts - Decision to issue Guidance on General Condition 9.6”,Published in November 2013 paragraph 3.5:


GC9.6 is included pursuant to section 51(1)(a) of the Act and is intended to give effect to Article 20(2) of the Universal Services Directive (“USD”) (Directive 2002/22/EC, as amended by Directive 2009/136/EC)31 which requires that:


“Member states shall ensure that subscribers have a right to withdraw from their contract without penalty upon notice of modification to the contractual conditions proposed by the undertakings providing electronic communications networks and/or services. Subscribers shall be given adequate notice, not shorter than one month, of any such modification, and shall be informed at the same time of their right to withdraw, without penalty, from their contract if they do not accept the new conditions.”




What does material detriment mean – Contractual Context?


At paragraph 36.3 of the defence EE appear to be relying on the fact that the term Material Detriment” “..is not defined explicitly in the agreement” However as we are now considering the contractual context of the term the protection of the UTCCRs is available. The UTCCRs are clear that in a standard form contract between a business and a consumer where a term is not written in plain and intelligible language the meaning most advantageous to the consumer should be used:


Under the UTCCRs Group 19 Regulation 7 states that:

(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.
(2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under Regulation 12.


Given that EE have failed to define Material detriment in the standard form contract which they wrote (as admitted by EE) then the meaning of “Material Detriment” is a purely subjective meaning – we can all understand the words, but we may not be able to agree on their meaning. Therefore under UTCCRs regulation 7 the interpretation most favourable to me – the consumer - should prevail, and my interpretation of Material detriment is any change that is not to my benefit (which is a slightly higher test than that required under Ofcom’s rationale at GC 9.6, but is in line with USD 20/2) as to my mind even a change that appears to be neutral is in fact unlikely to be to my benefit as EE directors have a duty of care to the company and incurring expense to change a T&C for a neutral impact would not be consistent with discharging that duty of care. Despite EEs attempts to “sell” this as a change for my benefit it is actually a change for EEs benefit as it gives them a stronger position to defend future price increases. This is clearly not to my benefit (any benefit to me of having a clearer term is outweighed by the detriment of having a reduced scope to challenge a price increase). By applying the UTCCRs it is clear that this change should be considered to be likely to be of Material Detriment (as per my CISAS claim) and I should be allowed to leave the contract penalty free as per the contractual T&Cs.



Further EE claim that the change is to my benefit as they have made the T&C's clearer, however if EE were really concerned with making their terms clearer for my benefit then at the same time as making this change they would have removed the phrase "Material Detriment" which is clearly an unclear term (as EE are aware as per their defence document). This omission by EE must bring into question the real motive behind only making the price rise clause clearer and I suspect the change has more to do with giving EE a greater security of enforcement than it does to offering a benefit to me


Reasons for compensation


At Para 38 EE have tried to deflect my claim for compensation by claiming that my dissatisfaction arises purely from the fact that EE have refused to allow me to cancel my contract without penalty –this is factually incorrect. It is clear from this that EE have deliberately ignored the well laid out reasoning for my compensation claim and they have not tried to refute the reasoning on a point by point basis – this is indicative of the approach EE have taken from the outset of this matter:


• EEs response to my initial letter requesting cancellation due to a change in T&Cs was responded to by an email claiming that EE have not increased prices – I have asked them to explain why they referenced a price rise in their response and ignored my reference to a change in T&C’s, as my email made no mention of a price rise - to date they have declined to offer an explanation and I can only assume it was a deliberate attempt to deflect me from the issue regarding T&Cs – which is considerably more serious than the lack of duty of care that I am claiming.
• EE have yet to explain under what Ofcom guidance they have acted – I have highlighted the guidance in my claim which I believe they are referencing – this guidance clearly shows that the benefit of the change actually falls to EE as it makes the price rise clause more likely to be enforceable, but EE have never outlined the benefits to them (and have not in their entire defence as that would clearly show that the change is to EEs benefit and therefore to my material detriment), so EE have been disingenuous with the reason for the change in T&Cs in all of my dealings with them.
EE have assumed the right to determine what is of Material detriment to me - which the UTCCRs Schedule 2 Paragraph 1 (m) specifically bar them from doing. Additionally EE have never explained to me the criteria they have used to conclude that this is not to my material detriment despite me requesting this information – they simply repeat that EE do not “consider this to be a change which is of material detriment” (and indeed their defence at paragraphs 36-36.4 try to prove that the issue is too complex for anybody to understand)
I therefore request that the adjudicator notes the real reasons that I am seeking compensation on this matter and treats EE claims at paragraph 38 as further evidence of EEs attempts to cause frustration over this matter,
[/quote]

Dave92en

PART 2/2

Other Specific Matters:


Paragraph 20


This further demonstrates the ambiguity within the contract and why the change is of material detriment to me.


My reading of the clause is not only does it give EE the right to choose which statistic to use; it also gives me the right to cancel should they apply a rate higher than RPI OR ANY OTHER RATE. In any case either way EE are admitting that the old clause was ambiguous in that it gives EE the right to choose the rate and the month – this is an unfair (and therefore unenforceable) clause under UTCCRs Group 13 as follows:


Schedule 2, paragraph 1, states that terms may be unfair if they have the object or effect of:

(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract.


13.5 Right to decide the meaning of terms. Similarly, if a supplier reserves the right to decide what a term in a contract means, then he is effectively in a position to alter the way it works so as to suit himself. It is not sufficient to say that the supplier will act 'reasonably'. Such a term gives rise to the same objections as a right to vary terms generally


Therefore the change in T&Cs moves the Term from being potentially unenforceable (by EEs own admission) to a potentially enforceable clause which is to my material detriment.

Paragraph 21
I have identified another statistic - CPI and again this is further evidence of the unenforceability of the old contract term and hence why the change is to my material detriment. It also demonstrates EEs lack of duty of care and supports my claim for compensation, as my claim clearly articulates the difference between CPI and RPI, yet EE are claiming that I have not identified another statistic.




Paragraph 29
This is factually misleading. Whilst Clause 2.11 “implements General Condition 9.6” there is no obligation on EE to use the term “material detriment” in their contract. That term was used in GC 9.6. which falls outside of the remit of the UTCCRs, however when used in a contract the term falls within the remit of the UTCCRs and therefore as a term in a contract it is not written in plain and intelligible language as required under UTCCRs – regulation 7 (Group 19)


Paragraph 31.
This is factually incorrect and contradicts EEs own defence arguments at para 20, as the old clause was RPI OR ANY OTHER statistical measure of inflation (e.g. CPI)


Paragraph 33.
At Paragraphs 33.1 to 33.4 EE appear to have conflated what material detriment means in terms of a price rise and what Material detriment means in relation to a change in T&Cs, this case regards a change in T&Cs and so is dependent on the meaning of Material Detriment in that context (either contractually or regulatory) which the UTCCRs Group 19 regulation 7, and GC 9.6 cover adequately.

Paragraph 33.3
However as EE have raised the question (albeit irrelevant to determining what the term Material Detriment means) it should be borne in mind that under my interpretation of the old and new clause based on February 2014 inflation statistics the new clause allows EE to impose an increase 58.8% higher than was the case before – clearly of material detriment (RPI 2.7%, CPI 1.7% difference 1%, 1% as a percentage of 1.7 % is 58.8%) This is clearly of Material Detriment.
EE assert - without providing evidence - that CPI can be higher than RPI, and this assertion is not supported by either an historical analysis over 22 years of RPI and CPI (1989 to 2011 – see below for evidence); nor the longer term prospect of both indices as provided for by the Budget of Office responsibility in their publication “Working Paper No2 - The Long-run difference between RPI and CPI inflation published in November 2011 by Ruth Miller (http://cdn.budgetresponsibility.independent.gov.uk/Working-paper-No2-The-long-run-difference-between-RPI-and-CPI-inflation.pdf)


where it is generally considered that the difference between the two indices is likely to increase. This must be something that EE economists and price setters would be aware of and it begs the question why the legal team are not up to date on this other than to try and mislead the adjudicator.



Ruth Miller


Office for Budget Responsibility


Abstract


Between 1989 and 2011 Retail Prices Index (RPI) inflation tended to be around 0.7 percentage points higher than Consumer Prices Index (CPI) inflation on average. Recent developments suggest that the long-run difference between these measures may be significantly higher in the future. This paper decomposes the differences in RPI and CPI inflation and looks at the prospects for the evolution of the wedge between the two measures over the long term. Possible methodological developments to the CPI and RPI could have a substantial impact on the difference between RPI and CPI inflation, and constitute one of the main uncertainties surrounding the long-term difference between the two measures.


1.5 For a number of years a widely held view was that the long-run difference between RPIX and CPI inflation rates was around ¾ percentage points.2 Indeed, since around 1989, RPI and RPIX inflation have tended to be around 0.7 percentage points higher than CPI inflation, on average.


1.6 However more recent developments suggest that the long-run difference is likely to be significantly wider in the future. The March 2011 Economic and fiscal outlook (EFO) stated that the long-run difference is expected to be around 1.2 percentage points between RPI and CPI inflation. This was based on the assumption that recent rises in the ‘formula effect’, one of the components of the wedge between the RPI and CPI, will begin to stabilise and the larger contribution from the formula effect in 2010 will persist.


So according to the Independent Office of Budget Responsibility the Material Detriment to me of using RPI rather than CPI is likely to INCREASE over time (current difference is 1% point or 58.8%).


Paragraph 33.5 & 33.6


EEs defence at these paragraphs falls down on a number of different points:


Point 1:


As in the regulatory context the Ofcom definition of Material Detriment is “any change that is neither of Benefit nor Neutral to the consumer” (i.e Material Detriment = Detriment), then EEs defence here where they clearly explain the ACTUAL negative impact on me has to (under Ofcoms GC 9.6 own definition) be of Material Detriment to me (it is neither to my benefit nor neutral).





Point 2:


EEs own definition of Material Detriment within the old contract was that a change in the “…All Items Index of Retail Prices or any other statistical measure of inflation published by any government body authorised to publish measures of inflation”would be of Material Detriment


Now EE are trying to argue that an increase higher than CPI (but lower than RPI) is not of Material detriment, how can EE change their own definition of Material detriment? This clearly demonstrates that EE does believe an increase above CPI (which is the Official (and only National) statistic for UK inflation) is of Material detriment, otherwise they would not have had that clause in the original contract..





Point 3


EE Have provided a comparison of RPI v CPI over the period March 2012 and February 2014 and claim that the average difference is 0.5, however that is not the same as a difference of 0.5% but a difference of 0.5 of a percentage point which = an average of 18.9% higher. However the only relevant statistic is the February 2014 statistic as this is the month that EE use to reference price rises. As can be seen the difference here is 1.0 percentage point or 58.8% higher. Using EEs example of a £30 contract that means the increase moves from £30*1.7% = 51p to £30*2.7% = 81p – an additional increase of 30p per month (58.8%) higher than would have been allowed under the old contract term and 100% higher than the example that EE have quoted – clearly showing the potential for the change in T&Cs to LIKELY to be of Material Detriment.


The longer term prospect of both indices as provided for by the Office of Budget responsibility in their publication “Working Paper No2 - The Long-run difference between RPI and CPI inflation published in November 2011 by Ruth Miller (http://cdn.budgetresponsibility.independent.gov.uk/Working-paper-No2-The-long-run-difference-between-RPI-and-CPI-inflation.pdf)


where it is generally considered that the difference between the two indices is likely to increase. This must be something that EE economists and price setters would be aware of and it begs the question why the legal team are not up to date on this other than to try and mislead the adjudicator.





Ruth Miller





Office for Budget Responsibility





Abstract




Between 1989 and 2011 Retail Prices Index (RPI) inflation tended to be around 0.7 percentage points higher than Consumer Prices Index (CPI) inflation on average. Recent developments suggest that the long-run difference between these measures may be significantly higher in the future. This paper decomposes the differences in RPI and CPI inflation and looks at the prospects for the evolution of the wedge between the two measures over the long term. Possible methodological developments to the CPI and RPI could have a substantial impact on the difference between RPI and CPI inflation, and constitute one of the main uncertainties surrounding the long-term difference between the two measures.


1.5 For a number of years a widely held view was that the long-run difference between RPIX and CPI inflation rates was around ¾ percentage points.2 Indeed, since around 1989, RPI and RPIX inflation have tended to be around 0.7 percentage points higher than CPI inflation, on average.


1.6 However more recent developments suggest that the long-run difference is likely to be significantly wider in the future. The March 2011 Economic and fiscal outlook (EFO) stated that the long-run difference is expected to be around 1.2 percentage points between RPI and CPI inflation. This was based on the assumption that recent rises in the ‘formula effect’, one of the components of the wedge between the RPI and CPI, will begin to stabilise and the larger contribution from the formula effect in 2010 will persist.


So according to the Independent Office of Budget Responsibility the Material Detriment to me of using RPI rather than CPI is likely to INCREASE over time (current difference is 1% point or 58.8%).





Point 4:


EE have also failed to consider that (using their example) had they applied RPI under the old contract I would not have suffered a detriment of 30px12 (£3.60p) as I would have escaped my contract penalty free and would have saved 12x30.60p (£363.60p) (assuming an average of ½ way through my contract). So the actual detriment is (I can assure you) Material to me.





Point 5:


If as EE claim that the difference between CPI and RPI is not Material then why have EE decided to change the contract to allow the higher RPI inflation index to be used (which is not designated as National statistic due to flawed calculation methodology) rather than CPI – which is the UK national statistic for inflation? This must clearly demonstrate that EE considers the difference to be material.

Paragraph 38
I am unclear as to why EE believe a penalty free cancellation is not a remedy that is available to me. As both a long term player in the mobile market that has been subject to Ofcom/OFTEL regulation for over 20 years, and as the sole author of our contract then EE will know that under out contract and regulation GC 9.6 if a change in T&Cs is likely to be of Material Detriment then a penalty free cancellation is the ONLY remedy that is available to me.

RandomCurve

Post #1477 is fine.
Post #1478 is fine down to Paragraph 33.3
I suggest you replace from there down with the below.
Good luck




Paragraph 33.3
However as EE have raised the question (albeit irrelevant to determining what the term Material Detriment means) it should be borne in mind that under my interpretation of the old and new clause based on February 2014 inflation statistics the new clause allows EE to impose an increase 58.8% higher than was the case before – clearly of material detriment (RPI 2.7%, CPI 1.7% difference 1%, 1% as a percentage of 1.7 % is 58.8%) This is clearly of Material Detriment.





Para 33.5 & 33.6
EEs defence at these paragraphs falls down on a number of different points:

Point 1:
As in the regulatory context the Ofcom definition of Material Detriment is “any change that is neither of Benefit nor Neutral to the consumer” (i.e Material Detriment = Detriment), then EEs defence here where they clearly explain the ACTUAL negative impact on me has to (under Ofcoms GC 9.6 own definition) be of Material Detriment to me (it is neither to my benefit nor neutral).

Point 2:
EEs own definition of Material Detriment within the old contract was that a change in the “…All Items Index of Retail Prices or any other statistical measure of inflation published by any government body authorised to publish measures of inflation” would be of Material Detriment

Now EE are trying to argue that an increase higher than CPI (but lower than RPI) is not of Material detriment, how can EE change their own definition of Material detriment? This clearly demonstrates that EE does believe an increase above CPI (which is the Official National statistic for UK inflation) is of Material detriment, otherwise they would not have had that clause in the original contract..

Point 3
EE Have provided a comparison of RPI v CPI over the period March 2012 and February 2014 and claim that the average difference is 0.5, however that is not the same as a difference of 0.5% but a difference of 0.5 of a percentage point which = an average of 18.9% higher. However the only relevant statistic is the February 2014 statistic as this is the month that EE use to reference price rises. As can be seen the difference here is 1.0 percentage point or 58.8% higher. Using EEs example of a £30 contract that means the increase moves from £30*1.7% = 51p to £30*2.7% = 81p – an additional increase of 30p per month (58.8%) higher than would have been allowed under the old contract term and 100% higher than the example that EE have quoted – clearly showing the potential for the change in T&Cs to LIKELY to be of Material Detriment. Additionally any future increase will be applied to the already higher price rise AND again the higher RPI rate will be used, so the detrimental effect accumulates over the contract.

The longer term prospect of both indices as provided for by the Office of Budget responsibility in their publication “Working Paper No2 - The Long-run difference between RPI and CPI inflation published in November 2011 by Ruth Miller (http://cdn.budgetresponsibility.independent.gov.uk/Working-paper-No2-The-long-run-difference-between-RPI-and-CPI-inflation.pdf)

where it is generally considered that the difference between the two indices is likely to increase. This must be something that EE economists and price setters would be aware of and it begs the question why the legal team are not up to date on this other than to try and mislead the adjudicator.

Ruth Miller
Office for Budget Responsibility
Abstract

Between 1989 and 2011 Retail Prices Index (RPI) inflation tended to be around 0.7 percentage points higher than Consumer Prices Index (CPI) inflation on average. Recent developments suggest that the long-run difference between these measures may be significantly higher in the future. This paper decomposes the differences in RPI and CPI inflation and looks at the prospects for the evolution of the wedge between the two measures over the long term. Possible methodological developments to the CPI and RPI could have a substantial impact on the difference between RPI and CPI inflation, and constitute one of the main uncertainties surrounding the long-term difference between the two measures.

1.5 For a number of years a widely held view was that the long-run difference between RPIX and CPI inflation rates was around ¾ percentage points.2 Indeed, since around 1989, RPI and RPIX inflation have tended to be around 0.7 percentage points higher than CPI inflation, on average.

1.6 However more recent developments suggest that the long-run difference is likely to be significantly wider in the future. The March 2011 Economic and fiscal outlook (EFO) stated that the long-run difference is expected to be around 1.2 percentage points between RPI and CPI inflation. This was based on the assumption that recent rises in the ‘formula effect’, one of the components of the wedge between the RPI and CPI, will begin to stabilise and the larger contribution from the formula effect in 2010 will persist.

So according to the Independent Office of Budget Responsibility the Material Detriment to me of using RPI rather than CPI is likely to INCREASE over time (current difference is 1% point or 58.8%).


Point 4:
EE have also failed to consider that (using their example) had they applied RPI under the old contract I would not have suffered a detriment of 30px12 (£3.60p) as I would have escaped my contract penalty free and would have saved 12x30.60p (£363.60p) (assuming an average of ½ way through my contract). So the actual detriment is (I can assure you) Material to me.

Point 5:
If as EE claim that the difference between CPI and RPI is not Material then why have EE decided to change the contract to allow the higher RPI inflation index to be used (which is not designated as National statistic due to flawed calculation methodology) rather than CPI – which is the UK national statistic for inflation? This must clearly demonstrate that EE considers the difference to be material.


Paragraph 38
I am unclear as to why EE believe a penalty free cancellation is not a remedy that is available to me. As both a long term player in the mobile market that has been subject to Ofcom/OFTEL regulation for over 20 years, and as the sole author of our contract then EE will know that under out contract and regulation GC 9.6 if a change in T&Cs is likely to be of Material Detriment then a penalty free cancellation is the ONLY remedy that is available to me.

jakethepeguk

I received the copy template from them today, yada yada go to cicas, the thing is, I have and I have won, wth?

I'm tempted to reply back something smug at them, (I would if I had received my compo and pac codes !).

One thing, it just really shows, how much they have their act together!

jakethepeguk

I have also raised OFCOMs, pathetic attempts at avoiding work, with my Mp.
Probably wont go anywhere, but the more parties that see whats going on the better imo.

Wullie32

RandomCurve wrote: »

Don't do this!!!


EE are still on the ropes on this one, we have yet to see how the price rise arguments are perceived by CISAS. My advice is to keep sending the T&C email to EE (copy in [EMAIL="Lynn.Parker@Ofcom.org.uk"]Lynn.Parker@Ofcom.org.uk[/EMAIL])
And star each one "You have ignored my last 2 emails please respond to this third email - my original email is reproduced below."


2 days latter resend (copying in Lynn again)


starting
You hav eignored my last 3 emails please respond to this fourth email - my original email is reproduced below."


And keep going every two days.


In addition send an email regarding the price rise changes as follows


"This is to advise that I reject your price increase on the grounds that is of Material Detriment to me under GC 93.6 and I request an immediate penalty free cancellation"


Then forget the price rise forum (whatever the response (except a penalty free PAC!!!)) and just go back to that forum IF you lose at CISAS on T&Cs.


No

Ok great, will keep plugging away and report back, cheers.

Wallace231

The reasons given by the customer are sufficient to justify part of his claim.
I direct that the company cancel the customer’s contract without penalty; provide the customer
with a PAC code; backdate the cancellation of the contract to 9 February 2014 and waive any
and all charges incurred under the contract after 9 February 2014. I also direct that the
company pay the customer compensation in the sum of £100.00.
Uju Obi LLB (Hons) MCIArb
Adjudicator


BIG BIG THANKS TO EVERYONE ON THIS FORUM... AND ESPECIALLY to SUPER RC !!!!! YEEEEESSSSS !!!!


How do i get my compensation ,pac code and the backdate cancellation ££ and obv the compensation in the sum of £100.00 ???

Thankyou all :beer:

tracy3108

Hi all,


My 1st post now I have registered, I have been following thread and following RC's amazing templates, I followed and submitted my defence and got adjudicator Andrew Morris,
Decision - Does not succeed.
Is it worth me pursuing any further? If so could you help me out on what I need to do.
Plus I made an error and missed out one of my numbers!
Many Thanks
Phil


Below is my decision.
Main issues




[FONT=Arial,Arial][FONT=Arial,Arial]2. I consider that the main issues in this adjudication are:


a. Whether the company has broken a term of the contract between it and the customer or failed in its duty of care.


b. Whether the reasons given by the customer are sufficient to justify an apology, termination of his agreements backdated to 14 March 2014 and £100.00 compensation.


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[/FONT]Background information




[FONT=Arial,Arial][FONT=Arial,Arial]3. In order to succeed in a claim against the company the customer must prove on a balance of probabilities that the company has broken some term express or implied of the agreement which existed between them, or failed in the duty of care which the company owed to the customer and that as a result of this breach the customer has suffered loss. (A duty of care is a responsibility or a legal obligation of the company to avoid acts or omissions which can be reasonably foreseen to be likely to cause harm to others). If no such breach or loss is proved the company will not be liable to pay compensation however disappointed or upset the customer is.


4. The customer and the company are aware of the facts of this case. I do not propose to recount all the facts in the same manner and order as the parties have done in their documents except where it is necessary for the purposes of this decision. I have carefully considered all of the documents submitted by the parties in support of their submissions and presented to me. The parties should also be reassured that if I have not referred to a particular document or matter specifically, this should not be taken to mean that I have not considered it in reaching my decision.


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[/FONT]Customer’s and company’s positions




[FONT=Arial,Arial][FONT=Arial,Arial]5. The customer states that the company has made a change to its terms and conditions that is to his material detriment. He requests £100.00 compensation for the company not complying with General Condition 9.6, acting in breach of the Unfair Terms in Consumer Contracts Regulations, breaching its duty of care to him, and for not acting in good faith in the manner in which the change was presented to him. The customer submits that the RPI has consistently been greater than the CPI. The price is a core term and any term relating to changing the price must be clear and unambiguous. The USD 2002/22/EC allows a customer to terminate the agreement upon notice of any proposed modification to the contract. The customer submits that the company’s terms are likely unenforceable as ambiguous. The company has treated the customer unfairly and has failed to respond to his concerns. Any change to the contract would be of material detriment to the customer.


3


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6. The company states that the customer has four numbers registered with it. The first, second and third mobile numbers are subject to version 58 of the terms and conditions; the fourth mobile number is subject to version 59 of the terms and conditions. The company submits that the claim falls outside the remit of CISAS as it does not relate to the issues CISAS can deal with and involves a complicated area of law. The company submits that the change to its terms increases certainty and reduces scope for dispute regarding whether a price change gives rise to a right to cancellation. The customer is only entitled to cancel the agreement where the change is of material detriment. The change is to the customer’s benefit as it makes the relevant measure of inflation clear and certain. If the customer has suffered detriment, this will not be material. The company submits that the CPI and RPI are calculated differently and the company has historically only relied upon the RPI. Any difference between the two measures of inflation is not sufficient to be material. The company denies that the customer is entitled to the remedies requested; the company has already cancelled the second agreement on 7 April 2014 as the minimum term had expired.


7. The customer has replied to the company submitting that the claim does fall within the remit of CISAS as it has a direct impact on the amount the company will bill him. The customer reiterates that the change is likely to be of material detriment, activating his right to termination. The customer discusses material detriment and submits that where a change is not to his benefit, it is to his material detriment. The customer clarifies his claim for compensation. He submits that the old term allowed a reference to any other statistical measure; this would include the CPI. The difference between the CPI and the RPI can be substantial. The customer reiterates that the v58 clause was used in an attempt to apply a yet-to-be-published RPI rate to a previous price increase.


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[/FONT]Adjudicator’s findings and reasons




[FONT=Arial,Arial][FONT=Arial,Arial]8. I find that:


a. The company has submitted that the case falls outside the scope of the CISAS Scheme. I do not accept this. I find that the issue of whether the customer is entitled to terminate the agreement without penalty flows from the interpretation of the contract between the parties and must therefore be considered an issue relating to the company’s provision of communication services, governed by the terms of that contract. I am also not persuaded that this is a complicated issue of law as it does not raise issues that are outside the competence of an adjudicator or that are outside the scope of the CISAS Scheme. I shall therefore proceed to determine the case.


b. The customer has four numbers with the company. The agreements for the first, second and third numbers incorporate version 58 of the company’s terms and conditions whilst the fourth number references version 59. As the relevant clauses in the original versions


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differ, I shall deal with the first, second and third numbers separately from the fourth number.


Version 58


c. The company has amended clause 7.2.3.3 in version 58 of its terms and conditions. For clarity I have included the old and new terms below.


[/FONT]

[/FONT][FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]7.2.3.3 The change that We gave You Written Notice of in point 7.1.4 is an increase in Your Price Plan Charge (as a percentage) higher than any increase in the Retail Price Index (also calculated as a percentage) for the 12 months before the month in which We send You Written Notice and You give Us notice to immediately cancel this Agreement before the change takes effect. [/FONT][/FONT](v58 Old Term)
[FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]
[/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]7.2.3.3 We have given You Written Notice of an increase in a Price Plan Charge under point 7.1.4 and (i) the increase in Your Price Plan Charge (as a percentage) is higher than the annual percentage increase in the Retail Price Index (RPI) published by the Office for National Statistics (calculated using the most recently published RPI figure before we give you Written Notice under 7.1.4); and (ii) You give Us notice to immediately cancel this Agreement before the change takes effect. [/FONT][/FONT](v58 New Term)


[FONT=Arial,Arial]

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d. The customer submits that he is entitled under the Universal Service Directive 2003/22/EC to withdraw from the agreement without penalty upon notification of any ‘proposed modifications in the contractual conditions’. I note that this is a Directive and that it is therefore not directly applicable into English law. An item of English legislation is required in order to enable the Directive to be effective in English law. I find that the Directive and enabling legislation has been enshrined in the OFCOM General Conditions, 9.6.


e. The General Condition 9.6 provides:


[/FONT]

[/FONT][FONT=Arial,Arial][FONT=Arial,Arial]"The Communications Provider shall:


(a) give its Subscribers adequate notice not shorter than one month of any modifications likely to be of material detriment to that Subscriber;


(b) allow its Subscribers to withdraw from their contract without penalty upon such notice; and


(c) at the same time as giving the notice in condition 9.6 (a) above, shall inform the Subscriber of its ability to terminate the contract without penalty if the proposed modification is not acceptable to the Subscriber."


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[FONT=Arial,Arial][FONT=Arial,Arial]5


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Accordingly, the customer is entitled to terminate the agreement without penalty in the event it can be established, on the balance of probabilities, that the change to the contract is likely to be of material detriment to the customer.


f. The General Conditions do not provide a definitive definition of what constitutes ‘material detriment’. However I am satisfied that on an ordinary reading of the condition, it is clear that for a change to constitute a material detriment, it must firstly be of detriment to the customer (i.e. not neutral or beneficial to him) and that detriment must be material (i.e. real, quantifiable, significant and not immaterial).


g. In reviewing the v58 Old Term it is clear that the customer is entitled to terminate the agreement where a price increase as a percentage is higher than the percentage increase in the RPI for the period ‘before the month’ in which notice of the increase was given. The customer submits that this term is unclear and references a previously disputed price increase where the relevant RPI figure was considered.


h. I am not persuaded that the v58 Old Term was unclear or unenforceable. A dispute relating to the application of a term does not necessarily mean the term itself is unclear. An incorrect application of a clear term would not affect the enforceability of the term where it is used correctly.


i. The v58 New Term provides that the customer is entitled to terminate the agreement where the price increase as a percentage is higher than the increase in the RPI ‘most recently published’ before notice was given.


j. The only significant change to the term is the manner in which the relevant RPI figure is determined. It is possible that the figure published in the month before notice was given will be the same figure as that most recently published. There is no attempt by the company to expand its powers, such as if it had made efforts to arbitrarily choose a relevant RPI figure. The v58 Old Term also made no reference to other statistical measures and the CPI is therefore not relevant in determining if the change is likely to cause material detriment.


k. Having reviewed the v58 Old and New terms I am satisfied that the only change was to provide clarity. The change must be considered as neutral, and if the customer will suffer any detriment as a result of the change, this will be negligible and not material. I therefore find that the change to the v58 terms and conditions is not likely to cause the customer material detriment and the customer is therefore not entitled to immediate termination of the first, second or third lines in accordance with the termination right specified in term 7.2.3.2 of the agreement.


6


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Version 59


l. The company has amended clause 7.2.3.3 in version 59 of its terms and conditions. Again, I have included the old and new terms below for reasons of clarity.


[/FONT]

[/FONT][FONT=Arial,Arial][FONT=Arial,Arial]"7.2.3.3. The change that We gave You Written Notice of in point 7.1.4 is:


(i) an increase in Your Price Plan Charge (as a percentage) higher than any increase in the retail price index (also calculated as a percentage) or any other statistical measure of inflation published by any government body authorised to publish measures of inflation from time to time, and published on a date as close as reasonably possible before the date on which We send You Written Notice; and


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[/FONT]

[FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial](ii) You give Us notice to immediately cancel this Agreement before the change takes effect." [/FONT][/FONT](v59 Old Term)




[FONT=Arial,Arial]

[FONT=Arial,Arial]

"7.2.3.3. We have given You Written Notice of an increase in a Price Plan Charge under point 7.1.4 and


(i) the increase in Your Price Plan Charge (as a percentage) is higher than the annual percentage increase in the Retail Price Index (RPI) published by the Office for National Statistics (calculated using the most recently published RPI figure before we give you Written Notice under 7.1.4); and


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[/FONT]

[FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial](ii) You give Us notice to immediately cancel this Agreement before the change takes effect." [/FONT][/FONT](v59 New Term)


[FONT=Arial,Arial]

[FONT=Arial,Arial]

m. In reviewing the Old Term I note that this allowed a customer to terminate the agreement if a price increase was higher than any increase in the RPI "or any other statistical measure of inflation" published by a government body so authorised. The New Term prescribes that the customer is only entitled to terminate the agreement if the increase is higher than the annual increase in the RPI.


n. I am satisfied that the change from the Old Term to the New Term is likely to be of detriment to the customer as it restricts the right to terminate to only those instances where a price increase is in excess of the RPI. However it does not follow that a change that is of detriment to the customer will also be of material detriment. The customer must show, on the balance of probabilities, that the detriment is real, significant and quantifiable.


o. The customer has provided the rates of the CPI and the RPI for the months August 2013 to January 2014 inclusive. These show that the CPI has consistently been a lower percentage to the RPI. I find that under the Old Term the customer was entitled to rely


7


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upon an increase in excess of any such statistical measure. The restriction to only the RPI as a relevant measure is such that the customer will be worse off under the New Term than the Old Term. I am satisfied that the degree of detriment is quantifiable and real, and whilst it may not be substantial, the detriment is significant.


p. The customer is therefore entitled to terminate the fourth mobile number in line with clause 7.2.3.2 of the agreement. This states that a customer must ‘give [the company] notice to immediately cancel this agreement before the change takes effect’.


q. I have reviewed the correspondence provided by the customer in relation to the request to terminate the agreements. I note that every letter and email is expressly related to the numbers ending -629, -158 and -626 only. The fourth mobile number, ending -494, is not mentioned at any point within correspondence. This mobile number is also not mentioned expressly at any point within the customer’s claim to CISAS.


r. I therefore must find that the customer has not actually requested termination of the fourth mobile number, in line with clause 7.2.3.2 or otherwise. I therefore find that the customer has not requested the termination of the fourth mobile number and has, through his conduct, accepted the change to the terms and conditions.


s. The customer is claiming £100.00 compensation for various failures of the company. I am not persuaded that the customer is entitled to compensation. I am satisfied that the company has, at all times, held the reasonable belief that the change to the terms and conditions is not likely to cause material detriment to its customers. It has also responded to the customer’s correspondence and referred the customer to CISAS for independent review; the customer has not been delayed in approaching CISAS or otherwise disadvantaged by the company’s actions. I do not consider the company presenting its position on the question of interpreting the terms of the agreement to be any breach of its duty of care or any legislation; the company is entitled to state its case just as the customer is entitled to escalate this for a review by an independent third party.


t. Accordingly, for the reasons explained above, I am not persuaded that the customer is entitled to any of the remedies requested.


8


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Conclusion




[FONT=Arial,Arial][FONT=Arial,Arial]9. My conclusion on the main issues is that:


a. The company has not failed in its duty of care to the customer.


b. The reasons given by the customer are not sufficient to justify an apology, termination of his agreements backdated to 14 March 2014 and £100.00 compensation.


10. Therefore, my decision is that the claim does not succeed.


[/FONT]

[/FONT]Andrew Morris


Adjudicator