Consumer Arbitration Agreements Act 1988
| Year | 1988 |
Consumer ArbitrationAgreements Act 1988
1988 CHAPTER 21
An Act to extend to consumers certain rights as regards agreements to refer future differences to arbitration and for purposes connected therewith.
[28th June 1988]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
England, Wales and Northern Ireland
1 Arbitration agreements.
(1) Where a person (referred to in section 4 below as ‘the consumer’) enters into a contract as a consumer, an agreement that future differences arising between parties to the contract are to be referred to arbitration cannot be enforced against him in respect of any cause of action so arising to which this section applies except—
(a) with his written consent signified after the differences in question have arisen; or
(b) where he has submitted to arbitration in pursuance of the agreement, whether in respect of those or any other differences; or
(c) where the court makes an order under section 4 below in respect of that cause of action.
(2) This section applies to a cause of action—
(a) if proceedings in respect of it would be within the jurisdiction of a county court; or
(b) if it satisfies such other conditions as may be prescribed for the purposes of this paragraph in an order under section 5 below.
(3) Neither section 4(1) of the Arbitration Act 1950 nor section 4 of the Arbitration Act (Northern Ireland) 1937 (which provide for the staying of court proceedings where an arbitration agreement is in force) shall apply to an arbitration agreement to the extent that it cannot be enforced by virtue of this section.
2 Exclusions.
2. Section 1 above does not affect—
3 Contracting ‘as a consumer’.
(1) For the purposes of section 1 above a person enters into a contract ‘as a consumer’ if—
(a) he neither makes the contract in the course of a business nor holds himself out as doing so; and
(b) the other party makes the contract in the course of a business; and
(c) in the case of a contract governed by the law of sale of goods or hire-purchase, or by section 7 of the Act of 1977, the goods passing under or in pursuance of the contract are of a type ordinarily supplied for private use or consumption;
but on a sale by auction or by competitive tender the buyer is not in any circumstances to be regarded as entering into the contract as a consumer.
(2) In subsection (1) above—
‘business’ includes a profession and the activities of any government department, Northern Ireland department or local or public authority; and
‘goods’ has the same meaning as in the Sale of Goods Act 1979 .
(3) It is for those claiming that a person entered into a contract otherwise than as a consumer to show that he did so.
4 Power of court to disapply section 1 where no detriment to consumer.
(1) The High Court or a county court may, on an application made after the differences in question have arisen, order that a cause of action to which this section applies shall be treated as one to which section 1 above does not apply.
(2) Before making an order under this section the court must be satisfied that it is not detrimental to the interests of the consumer for the differences in question to be referred to arbitration in pursuance of the arbitration agreement instead of being determined by proceedings before a court.
(3) In determining for the purposes of subsection (2) above whether a reference to arbitration is or is not detrimental to the interests of the consumer, the court shall have regard to all factors appearing to be relevant, including, in particular, the availability of legal aid and the relative amount of any expense which may result to him—
(a) if the differences in question are referred to arbitration in pursuance of the arbitration agreement; and
(b) if they are determined by proceedings before a court.
(4) This section applies to a cause of action—
(a) if proceedings in respect of it would be within the jurisdiction of a county...
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