Plain English, Plain Sense

by Eric Pinckert

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Banking Contracts
The Benefits of Plain English

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Complicated words and language, like weeds, will always be with us. The reason is simple: clear expression requires a lot of effort, poor expression is easy. People always need to be encouraged to clean up their language and to make it more serv­iceable, to others and to themselves.

Every year noises are made about a growing need for plain language. During the booming 1980s and '90s, expression indulged itself—got sloppy. The coming year prompts us to have a look at what's been going on. Lawyers have not helped the problem. We prefer to add instead of subtract. Sometimes, we forget that you can't say it all. It may be possible to say absolutely everything that legally needs to be said, but it is also possible that no one wants to listen, or can hear it once it's said.

Last year, President Clinton ordered the federal government to draft all new documents 'in plain language,' and to 'revise all existing letters and notices into plain language by 2002.' Vice President Gore, who spearheads this effort, already claims credit for reducing thousands of pages of regulations and rules. Recall, however, President Carter's earlier and largely futile edict to reduce government regulations and 'make sure that those that are written are in plain English.' Good intentions and official edicts are not enough.

The Securities and Exchange Commission—correctly sensing that prospectus language was so inscrutable that it had become an embarrassment to the world's most sophisticated and fair financial market—threw its hat into the ring with mandated plain English under Rule 421. While the results are a work in progress, the rules have made serious steps forward in educating investors to the perils of particular investments, and of course, to their potential rewards.

More recently, the Federal Communications Commission adopted the Truth-in-Billing Principles for plain language telephone bills. This effort to allow consumers to read and understand their telephone bills seeks to combat the unfair and deceptive tactics of 'slamming' and 'cramming' outfits that unlawfully switch services and place charges on consumers' phone bills. This FCC order should create more telephone bills that are concise and comprehensible.

I work on the front lines of the plain English movement in the private sector. In my professional life, I strive to simplify and clarify business and consumer contracts, marketing communications, and both paper-based and electronic forms systems. Although I am often heartened by the pronouncements of government officials and assorted other pundits concerning the virtues of plain language reform, I am daunted by the pervasiveness of confusing, garbled legal language that remains in even routine business and legal communications.

Here are several examples where Siegel & Gale has used plain English to redraft and clarify confusing language. While they are illustrative, they are hardly the worst butchering of English I have seen. Several additional examples show how much more work needs to be done.

Banking Contracts

A banking client had the following sentence in one of its agreements:

    'Deposits may be made by a minor and withdrawals thereof may be made by the minor without the consent of a parent or guardian, neither of whom, in that capacity, shall have any right to attach or interfere in any manner with such deposits or withdrawals.'

This sentence sounds right out of the pages of Hadley v Baxendale. It is not, however, particularly accessible to ordinary people trying to understand it. We translated it to read, 'Minors may make deposits and withdrawals from their accounts without the consent or interference of a parent or guardian.' Plain English in action.


Patients often experience profound frustration when trying to determine what is and is not covered under their health plans. In addition to the usual legal jargon, healthcare offers a confusing lingo all its own. With a realization that healthcare materials must serve a diverse audience, including the elderly, the infirm, and patients with limited English skills, we have taken special pains to push for radical language simplification in this area.


This Grievance Procedure must be used if the nature of the complaint deals with the quality of the services given to the Member, including complaints about waiting times, physician demeanor and behavior, or adequacy of facilities (as opposed to whether or not a particular service is a Covered Service and what amount, if any, should be paid.) Also, this Grievance Procedure will be applied under all circumstances to any Universal Healthcare supplemental products which the Member may have purchased separately from this SeniorPlus plan. If the nature of the Member's complaint deals with a Covered Service stated in this SeniorPlus plan or the level of payment associated with this plan, please refer to the Medicare Appeals Procedure, stated in Section X.


If you have a complaint about quality of service received, waiting times, physician behavior, or the adequacy of medical facilities, please use our grievance process.

If you have a complaint about coverage or payment, please use the Medicare Appeals procedure (see Section X).

The simplified version says in 43 straight­forward words what the original version did in 120, and the new version avoids jargon like 'supplemental products' and 'covered services.'


Much hand wringing has accompanied the SEC's plain English rules for drafting financial disclosure documents. We worked with the SEC to create the 'Plain English Handbook' to help the financial community write disclosure documents, 'in a language,' as Chairman Levitt put it, 'investors can understand: Plain English.'

Certainly the need for more accessible language in prospectuses is indisputable. Practiced noncommittal timorousness, buried in mind-numbing detail, has allowed more than one 'less-than scrupulous issuer,' as Warren Buffet says, to obscure 'a subject it feels legally obligated to touch upon.'

Both Buffet and Levitt would be disappointed at the 'plain English' found in a recent prospectus I received from a mutual fund. One sentence concerning the allocation of fund expenses began:

    'In particular, but without limiting the generality of the foregoing, you shall not be responsible, except to the extent of the reasonable compensation of such of the Fund's {Trustees} {Directors} and officers as are directors, officer or employees of you whose services may be involved, for the following expenses of the Fund/In particular, but without limiting the generality of the foregoing, such expenses include the following: organization expenses of the Fund/each Portfolio (including out-of-pocket expenses, but not including your overhead or employee costs); fees payable to you and to any other Fund/Portfolio advisors or consultants, legal expenses . . . .'

This citation represents only a quarter of a single 400+-word sentence. I consider myself to be a fairly sophisticated reader, but by the end I still had precious little idea of how to estimate, calculate, or ascertain the expenses of my fund. Clearly, the authors—no single person could have written something this confusing—did not write this sentence with any reader in mind. I attribute the incomprehensible nature of this prospectus to the exigencies of an exhausted committee writing under time pressure. But could it also be, as Kurt Andersen writes in his millennial tale Turn of the Century, that the warnings and disclaimers in prospectuses 'are boring intentionally, word analgesics to numb anxious buyers and sellers'? I hope not. I think the investing public deserves more respect. There is also the well documented phenomenon that once readers feel the information they seek is too difficult to understand, they settle for incorrect information, which indeed may be the desired result.

Happily, other fund companies are doing better. By combining plain language drafting and smart information design, a number of fund companies are living up to the letter and spirit of the plain English rules. Nonetheless, no less august a figure than Harvard Law School's Hal Scott has opined that investors will still not read simpler prospectuses. I am more optimistic. Warren Buffett writes in his introduction to the 'Plain English Handbook,' investors have long 'been unable to decipher just what is being said, or, worse yet, had to conclude that nothing was being said' in prospectuses. Once prospectuses contain relevant, accessible information, I submit investors will have reason to read them and will read them.

Here are before and after examples of prospectus language we redrafted explaining repurchase agreements:


    A Fund may enter into repurchase agreements through which investors (such as a Fund) purchase a security (known as the 'underlying security') and the seller agrees, at the time of sale, to repurchase the underlying security at a specified time and higher price that determines the yield....Repurchase agreements are generally for short periods, often less than a week.


    If a fund enters into a repurchase agreement, it is really taking out a short term loan (usually for one week) and using certain investments in its portfolio to secure the loan.

Explaining what a repurchase agreement is in plain language orients the reader to the subject matter of the provision and allows for understanding. Note that the use of plain English in no way condescends or insults the intelligence of more sophisticated readers—a common argument against simplification.

The provision continues:


    In the event of a bankruptcy or default of certain sellers of repurchase agreements, a Fund could experience costs and delays in liquidating the underlying security, which is held as collateral, and might incur a loss if the collateral held declines in value during this period.


    The risks in using portfolio investments to secure a loan are:

  • there may be a delay in the fund getting its investment back; or
  • the funds may lose money if the value of these investments goes down and the lender fails financially before the loan is paid back.

By breaking up dense blocks of text into more manageable bites using common terms, bulleted lists, and a reader-friendly layout, we were able to offer a more accessible explanation of the rather rarified topic of how this fund uses repurchase agreements.

The Benefits of Plain English

I have seen many companies achieve measurable savings and increased revenue by adopting both plain English and effective information design. I have seen others squander the opportunity. The business case for plain language rests on a basic premise that, in an honest enterprise, it is impossible to deliver exceptional customer service if your clients or customers can neither figure out what you are telling them, nor understand the terms that govern your relationship with them. Moreover, marketing in plain English then retreating behind a wall of double-talk leads to frustrated, angry customers.

Most people intuitively understand the benefits of plain English, and I rarely encounter anyone willing to defend gobbledygook. Converting theoretical enthusiasm for actual practice takes work. As U.S. Representative Richard E. Neal recently noted, 'Simplification is like the weather: Everyone talks about it, but nobody does anything.' Siegel & Gale and our clients are doing something about it, even if it is a step at a time.

Eric Pinckert is a senior vice-president at Siegel & Gale, the world’s largest independent branding and interactive media consultancy, based in New York City. He can be reached in Los Angeles at (213) 620-0101 or