This is the Language skill from the EverQuest rpg. (I know the formatting of the little table will screw up, but it should still be comprehensible.) It's quite simple, works well, and is easily portable to other games/settings.
Language (Int) [Trained]
Characters begin the game with 4 (or 3 if the character is a troll or ogre) ranks in one or more native languages, and can buy more ranks in Language, just like any other skill. Having 1 rank in a particular language means the character can speak a few simple words and phrases, while having 2 ranks means the character can construct and comprehend basic sentences. With 3 ranks, the character can easily communicate most simple concepts. At 4 ranks, the character is as fluent as an average native speaker (though he may still have an accent). With 5 or more ranks, the character begins to understand the origins of various words and gain a scholarly knowledge of obscure points of linguistics, and is capable of masking a foreign accent. It is possible to have more than 5 ranks in a language, but no real benefit is gained for doing so unless perhaps one is a translator or the like.
Player characters are assumed to be literate in any language they speak (the character’s Language ranks apply to both spoken and written language), though a player may choose to make her character illiterate if she so chooses.
Check: Speakers with 3 or more ranks in a language generally don’t need to make language checks to hold simple, casual conversation with other speakers who also have 3 or more ranks. (If a character is straining to overhear a conversation, that’s a Listen check.) However, characters with little skill in a language or fluent listeners trying to make sense of broken speech are generally required to make a Language check to communicate or grasp ideas of any complexity. Total the number of ranks of the given language that any two speakers have between them, and consult the table below for the appropriate DC.
The Speakers: DC to Convey Complex Idea
Have 3 or fewer ranks between them 20
Have 4–5 ranks between them 15
Have 6 or more ranks between them 10
Are actively trying to communicate –2*
Are fluent in similar dialects (e.g. Elvish and Elder Elvish) +2**
*Lower the applicable DC by this amount.
**This is a competence bonus granted to both characters’ checks.
Language skill becomes very important in conjunction with language-dependent skills such as Bluff, Diplomacy, Disguise, Forgery, Gather Information, Intimidate, Read Lips, or Sense Motive, which often require that a character understand or be understood, as described in each of those skills. The Taunt skill is not technically language dependent, although a taunted target’s ability to understand the taunter is a factor in the success or failure of the taunt, as described in that skill’s description. Under specific circumstances, Knowledge, Perform, Profession, and Trade Skill may all require Language checks as well, at the GM’s discretion. Language checks made in conjunction with any of the above skills are almost always considered free actions.
A character with 5 or more ranks in a language can also attempt to discern whether another speaker is truly a native. This is an opposed Language check. If the listener succeeds, and the speaker is not a native, this information is discovered. If it’s truly important, the GM may make this roll.
Retry: Characters attempting to understand each other may retry as often as they wish, subject only to the limits of time and patience. Once a character has missed a roll to decipher a particular statement or concept, however, she cannot try again.
Special: A character with 5 or more ranks in any Language gets a +2 synergy bonus to Read Lips checks involving that tongue.