Hillingdon Country House Fitness Centre Unfair Standard Terms Case Study

The legal position of Carter and Beyonce, who are angry about the membership fee

Businesses have unfair standard terms in their contracts (The Law Commission and The Scottish Law Commission, 2012). According to the Office of Fair Trading (OFT), “a standard term is unfair if it creates a significant imbalance in the parties rights and obligations under the contract, to the detriment of the consumer, contrary to the requirement of good faith” (Office of Fair Trading, 2008). Given this definition, Hillingdon Country House Fitness Centre has some unfair standard terms to its members. For instance, the advertisement has misleading omission to customers. Misleading omissions have the following characteristics:

• Omitted or hidden information
• Unclear information
• Unintelligible information
• Ambiguous information
• Information that a party gives to clients when it is too late

In this case, the Hillingdon Country House Fitness Centre had a “Special Offer” for 12 months membership at a 50% discount with no joining fee. Thus, the problem was in what the Fitness Centre had omitted.

Carter and Beyonce noticed that, on the membership form, there was a general reference to a joining fee and the payment of monthly membership fees, but there was no indication of the actual amount(s).

The OFT has some provisions on unfair practices of health and fitness centers regarding the membership contracts. The OFT has paid special interest to the unfairness in the gym membership contracts. Concerning areas that the OFT has identified as containing unfair standard terms for consumers, the legal position of Carter and Beyonce remains clear because OFT considers such strategies as unfair to consumers. For instance, there is a lack of clarity about the membership fees. The Hotel did not clearly state the joining fees and the payment of monthly membership fees. Still, it failed to refer to the actual amounts of these charges.

It is such unclear, misleading, and ambiguous terms in the contract that Carter and Beyonce can rely on to establish legal grounds against the gym. Thus, any information the gym shall provide later for clarification shall form parts of the misleading omissions as expressed in the case of OFT v Ashbourne Management Services Limited and others[2011] EWHC 1237 (Office of Fair Trading, 2008).

The gym also provides 12 months membership period as the minimum period for the membership. This condition also has serious implications for Carter and Beyonce. For instance, the couple has to make monthly payments for the next 12 months. This is an obligation, which Carter and Beyonce must fulfill because the gym will not release them under any circumstance. This implies that any attempts to cancel such contracts may attract many forms of penalties based on the following:

• Lack of clarity about a minimum period of membership
• There is no reference to cancellation penalties or impacts of membership cancellation.
• The contract also does not have any provision for changes to the agreement.

The gym also hid or did not clearly express the difference between a joint membership and an individual membership. This leaves customers to presume that charges for joint and individual memberships are different. However, the charge reflects otherwise as Carter and Beyonce noted that both the staff at the Fitness Centre and the bank had assumed the amount they entered was per individual membership rather than for a joint membership.

According to Edwina, Carter and Beyonce are not eligible for any refunds because they joined two days later after the “Special Offer” had expired. However, it was within the public knowledge that there was a postal strike, which caused the delay in mail deliveries. In this context, the gym did not clarify any penalties or terms of membership arising from later deliveries.

The gym hid or did not clearly explain these terms and conditions for customers. However, health clubs and fitness centers also need to protect themselves from consumers. Lack of plain and clear expression may jeopardize the legal position of the gym.

Some of the Hotel’s claims are not against the law, but they are dubious and unfair terms for customers:

• Excluding the right to claim refunds
• Carter and Beyonce may lose all monies paid to the gym arising from high penalties.

Regulating bodies have noticed that the terms of the contract may not be clear to consumers. As a result, The Law Commission and The Scottish Law Commission conclude that any unfair term shall not bind the consumer to the contract. However, other parts of the contract “shall continue to bind the parties if it is capable of continuing in existence without the unfair term” (The Law Commission and The Scottish Law Commission, 2012).

There are also studies, which show that consumers are too busy to read complex and standard terms, which parties present to them. However, consumers are logical and make informed decisions if they get the right information. This means that the Hotel should present its contract in plain and intelligible language for consumers to allow consumers to read and understand such terms before committing to a contract.

The Hotel also engages in misleading acts. For instance, it used terms like Special Offer and joint membership with 50 percent discount, which induced Carter and Beyonce to sign the contract. Carter and Beyonce can claim that they signed the contract based on misleading actions of the Hotel (Office of Fair Trading, 2008).

The legal position Carter, who wants compensation for his back injury

It also stated in small print at the bottom of the form:

“Whilst the equipment is maintained to a high standard and guidance and supervision are provided, the Hillingdon Country House Hotel can accept no liability for injury, or loss of, or damage to, any property, that occurs during the use of the facilities.”

According to OFT, this statement reflects unfair standard terms in the contract. Thus, Carter is liable for compensation if the party’s circumstances under which he sustained the injury.

• Carter and Beyonce used the gym unattended.
• The treadmill he was using unexpectedly speeded up causing him to lose his balance and fall off.

The main condition for making a personal injury compensation claim is that an injury must have occurred (Campbell, 2012). Thus, cases of ‘near misses’ do not provide adequate grounds for compensation claims unless the person experiences quantifiable psychological problems because of the experience. In the case of Carter, the back injury has occurred. The injury compensation law has some provisions to guide such claims. These include the following:

• The extent or severity of the injury
• The length of time for recovery
• Impacts of the injury on the claimant (personal life quality and financial situation)

The law must also focus on the negligence of the Hotel. However, we have to acknowledge that the Hotel uses a top-of-the-range model from Super Fit (a reputable company in fitness equipment). In addition, it also maintains its facility as necessary. Still, we have to establish a condition of negligence.

Dalmar left Carter and Beyonce to train unattended

Injury compensation law must establish that there are persons who are responsible for the damage because of their careless actions or lack of concern. In this case, such acts of carelessness or absence of Dalmar from the gym contributed to the back injury of Carter directly or indirectly. Dalmar failed to provide adequate supervision during the training session. The injury compensation law recognizes that an injury must have taken place. However, there should also be someone to blame for the injury.

The injury compensation law must also clarify contributory negligence. We have two ways in which contributory negligence may affect personal injury compensation claims. First, claimants may contribute to their injury through negligence. However, this is not the case with Carter. The injury happened unexpectedly and Carter had no means of stopping it. In this case, we rule out the negligence of Carter as a contributory factor to his back injury. Second, there are no multiple injuries or many people responsible for the injury. Thus, contributory negligence from other people or factors does not apply in the case of Carter. In this case, the Hotel takes the blame for the injury. The comparative negligence principle does not apply in the case of Carter’s back injury. We note that Carter is completely not at fault. Therefore, it is the responsibility of the hotel to compensate for the injury.

Carter must consider the following when making claims for the back injury:

• Suffering and pain from the back injury
• Since Carter is a self-employed accountant, he must consider lost earnings for the period of the injury.
• Medical and all other related expenses
• Loss of earnings arising from the caregiver

The case of Carter assuming the risk also does not apply in this case. We know the inherent risks in fitness and health clubs, and that is why there are always personal trainers or supervisors. However, such risks are not common occurrences like in the case of Andrew Gravil v Richard Carroll and Redruth Rugby Football Club [2008] EWCA Civ 689. Carter sustained the injury while training on the treadmill when it unexpectedly speeded up. In this case, the Hotel cannot claim that the claimant assumed the risk of the back injury before training. This is because unexpected speeding of the treadmill is not a risk that is inherent in the gym (Goguen, 2012).

The Hotel also cannot claim that Carter failed to mitigate the effects of the injury. This is because Carter sought medical attention after the injury. Thus, any argument about Carter’s “failure to mitigate” consequence of the back injury does not apply in this case (Goguen, 2012). The claimant did not wait until the condition deteriorated to seek medical attention, which normally results in high medical costs. In addition, claims for lost wages should also remain intact as Carter mitigated the effects of his injury.

The case of Carter is not in isolation. People who have suffered injuries in the gyms have received compensations for such injuries depending on their cases. For instance, Ms. Brown won compensation of an unknown amount after the exercise bike threw her off and caused bodily injury, and affected her working life (Simon A. Holt & Co. Solicitors, 2007). This was an out-of-court settlement between the gym and Ms. Brown.

In another case, a sports center at Staffordshire received “a fine of £15,000 after a man broke his neck because the handlebars of an exercise bike broke” (YouClaim, 2011). The man received the compensation based on the following grounds:

• The handlebars of the bike fell from the frame
• The trainer was at the scene
• He spent ten months wearing a rigid neck collar
• The injury affected his personal and financial life
• The inspector established that the bike’s handlebars were beyond the recommended and marked safety area.
• The bike had no physical way of stopping the handlebars.
• There were no methodical means of checking whether the handlebar adjustment had exceeded the safety limit.

These rulings indicate that owners of fitness and health clubs must make sure that their customers have safe environments for exercise and leisure activities. Such facilities should be safe, assembled, and maintained according to the manufacturer’s instructions. Therefore, any injuries or deaths resulting from the use of such facilities usually affect their owners.

Claims against Super Fit

Super Fit supplies top-of-the-range equipment for fitness and health clubs. It also gives a six-month guarantee with all their products. However, the contract with the Hotel stated the following:

“After the six-month guarantee period, Super Fit can accept no liability for any defects in, or any injury caused by, the machine supplied”.

In this case, neither Carter nor the Hotel can make any claim against Super Fit. This is because of the following:

• The treadmill was over six months old thus, not eligible for guarantee.
• Super Fit cannot accept any liability arising from defects or injury from the machine after the six-month guarantee.
• Edwina referred Carter to the disclaimer at the bottom of his application form.

The likelihood of a successful claim against Super Fit diminishes after six months. Before six months, Super Fit can accept all liabilities from the machine. However, in this case, the Hotel must identify inherent problems with the machine and handle them. According to Associated Newspapers Limited, claims and possible acceptance of liabilities after six months in the UK are difficult to get (Associated Newspapers Limited, 2010). However, the Hotel must prove that the unexpected increase in speed originated from the machine itself. Edwina must show the following:

• No signs of misuse
• No shoddy components
• No-fault in design

These are the provisions of the Sales of Goods Act. Super Fit has no obligations to accept liabilities resulting from the use of the treadmill if Edwina cannot prove such claims before the expiry of the guarantee.

This case may differ if we look at the European Union (EU) directive of 1999/44/EC. This provision requires that all consumer goods sold anywhere in the EU must have a two-year guarantee. This period may even belong in other countries. Under the UK laws, the guarantee should not bind Super Fit if the treadmill has its fault from the Hotel. However, the EU rule does not require “consumers to prove that such faults are inherent in the product or down to their actions” (Associated Newspapers Limited, 2010). At the same time, it allows consumers to report such cases “within two months after detecting the problem” (Associated Newspapers Limited, 2010).

The legal position Dalmar, who feels that he has been unfairly dismissed

The facts behind Dalmar’s dismissal are as follow:

• Dalmar left Carter and Beyonce to work out in the gym unattended. As a result, Carter sustained a back injury from the treadmill unexpected speeding.
• The staff handbook indicates that the mini-gym should not be unattended with clients in it.
• Edwina immediately suspended Dalmar
• Dalmar was liable for gross misconduct
• Dammar has worked in the gym for over two years
• Dalmar ignored the disciplinary hearing and advice to bring a friend or an advisor.
• Dalmar received two month’s pay instead of notice

Dalmar’s response

• It was a monetary error because he did not leave clients unattended for long
• Carter’s injury did not result from his absence, but the faulty treadmill
• Dalmar felt unfairly dismissed

The Hotel must be aware that if it wishes to dismiss Dalmar for one act of misconduct, then it is imperative to show that the action of Dalmar amounts to gross misconduct (International Law Office, 2000). The challenge for employers has been the definition of what constitutes gross misconduct, which can justify summary dismissal. The Employment Arbitration Tribunal confirmed what constitutes gross misconduct in the case of Graham Group plc v Bishop (International Law Office, 2000). A single act that justifies dismissal must be:

• Serious
• Wilful
• Obvious

On the other hand, the Court of Appeal maintained that an employer should define what constitutes gross misconduct in their staff handbook. According to the Law Donut, a gross misconduct “on the part of an employee is so bad that it destroys the employer and employee relationship, and merits instant dismissal without notice or pay instead of notice” (Law Donut, 2012). In this sense, the Law Donut notes that lesser offenses, which mainly relate to work performance such as negligence, absenteeism, sub-standard works, and poor time management, do not usually constitute gross misconduct. However, such repeated acts may be serious. In this case, Dalmar may sue the Hotel for unfair dismissal like the case of Orr v Milton Keynes Council [2011] EWCA Civ 62. However, the Hotel may argue that:

• It took proper procedures before dismissal by holding a disciplinary hearing.
• It gave Dalmar a chance to come with an advisor at the hearing.
• Dalmar neither came to the hearing nor sent an advisor.

Given that the Hotel does not have other issues against Dalmar, the Tribunal may argue that the Hotel did not follow explore other measures before considering dismissal. These may include:

• Transfer
• Warnings
• Demotion

The Hotel failed to classify what constituted gross misconduct. In addition, it did not classify the claim against Dalmar as gross misconduct.

Given the severity of gross misconduct and subsequent dismissal, the Hotel did not follow procedures in its decision to dismiss Dalmar. These procedures could have included:

• Conducting thorough investigation and establishing how long Dalmar left clients unattended
• Interviewing all witnesses including Carter and Beyonce
• Establishing an impartial disciplinary team
• The disciplinary team made an instant decision without the employee
• Dalmar did not receive any advice to appeal against the decision

According to Law Donut, employees dismissed for gross misconduct should not receive any pay instead of notice as this may weaken the case (Law Donut, 2012). This is because gross misconduct is so severe to the extent that an employer can dismiss the staff instantly by following the correct procedure (Law Donut, 2012).

Royden notes that employers must also act reasonably before deciding to dismiss an employee as was the case of Foley v Post Office [2000] ICR 1283 (Roydens, 2005). In case, of unfair dismissal, the employer may compensate highly for the dismissal. Considering the facts of dismissal in this case, dismissal was harsh for Dalmar. In the case of Uzoamaka v Conflict & Change Limited [1999] ADR.L.R. 05/28, the Court of Appeal recognized that it was the parties to set what constituted gross misconduct (International Law Office, 2000). However, in this case, the Hotel never classified unattended mini gym with clients in it as gross misconduct. Dalmar can also sue the Hotel on grounds of unfair dismissal considering that he has worked in the Hotel for more than two years (Law Donut, 2012; Roydens, 2005).

This case raises serious issues. First, the employer had the liberty to define what constituted gross misconduct. However, the Hotel shall experience challenges in proving that the dismissal was fair. Second, the Hotel should consider areas or offenses with gross misconduct in their staff handbook. This is because Dalmar may claim that the staff handbook is mere guidance for employees’ behaviors and not part of the contract. The procedures for dismissing an employee are complex and require extensive advice even in cases where employers may claim cases of gross misconduct. Failure to follow the right procedure may result in high awards. At the same time, employees should seek advice because the dismissal procedure may turn out to be unfair like in the case of BTRT UK Ltd v Ms. P Wang EAT 17/07/09.

References

Associated Newspapers Limited 2010, Two-year warranty (EU law).Web.

Campbell, E 2012, Injury Compensation Law. Web.

Goguen, D 2012, Defenses in Personal Injury Cases: A look at common defense strategies that can bar or limit a personal injury lawsuit.Web.

International Law Office 2000, Employment & Labour – United Kingdom: Defining ‘Gross Misconduct’. Web.

Law Donut 2012, Gross misconduct: 16 FAQs.Web.

Office of Fair Trading 2008, Unfair standard terms.Web.

Roydens 2005, Dismissal Procedures.Web.

Simon A. Holt & Co. Solicitors 2007, Gym Member Wins Compensation for ‘Spin’ Class Injury. Web.

The Law Commission and The Scottish Law Commission. (2012). Unfair Terms in Consumer Contracts: a new approach?, Crown, London.

YouClaim 2011, Case study: Neck injury compensation and exercises in the gym. Web.