Customers on Sony’s recently hacked Playstation Network (PSN) have been asked to sign away their right to collective redress under new terms and conditions, but lawyers have doubted its validity in UK courts.

Collective redress allows many people in a similar situation participate in a legal case against one company or organisation over an alleged breach of the law, much like class action lawsuits seen in the US.

However, following the recent hacking of millions of PSN users’ accounts, Sony has prompted PSN users to relinquish their rights to collective redress, while banning those that do not sign the new conditions from accessing the multimedia service.

According to technology news website The Register, the news terms include a clause that asks users to resolve any PSN issues with an arbitrator.

"Any dispute resolution proceedings, whether in arbitration or court, will be conducted only on an individual basis and not in a class or representative action or as a named or unnamed member in a class, consolidated, representative or private attorney general legal action, unless both you and the Sony entity with which you have a dispute specifically agree to do so in writing following initiation of the arbitration," Sony Online Entertainment Network website said.

The changes will not affect those users who are members of a class action lawsuit that was filed prior to 20th  August, following the loss of 77 million customers’ users' name, address, country, email address, birthday and their username and password login for the PSN.

But the act has been challenged by one lawyer, who claims “any such term may contravene the Unfair Contract Terms Act (UCTA)” the guardian of consumer rights in the UK. Under the UCTA a term will be unfair if it unreasonably seeks to limit the supplier’s liability for the consequences arising from having themselves breached the contract.

For more on contract law and how your rights may be affected by Sony’s changes, contact our expert Manchester solicitors today.

Sept 2011