I Googled 'lens flare' and Wikipedia had this to say:\
Lens flare is the light scattered in lens systems through generally unwanted image formation mechanisms, such as internal reflection and scattering from material inhomogeneities in the lens. These mechanisms differ from the intended image formation mechanism that depends on refraction of the image rays. Flare manifests itself in two ways: as visible artifacts, and as a haze across the image. The haze makes the image look "washed out" by reducing contrast and color saturation (adding light to dark image regions, and adding white to saturated regions, reducing their saturation).