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Consumer Arbitration Agreements Act 1988

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Scotland

6Arbitration agreements: Scotland

(1)In the case of a consumer contract to which, by virtue of subsections (2) to (4) of section 15 of the Act of 1977 (scope of Part II of that Act), sections 16 to 18 of that Act apply, an agreement to refer future differences arising out of the contract to arbitration cannot, if it is a domestic arbitration agreement, be enforced against the consumer in respect of a relevant difference so arising except—

(a)with his written consent given after that difference has arisen; or

(b)where, subject to subsection (2) below, he has submitted to arbitration in pursuance of the agreement (whether or not the arbitration was in respect of that difference); or

(c)by virtue of an order under section 7 below in respect of that difference.

(2)In determining for the purposes of subsection (1)(b) above whether the consumer has submitted to arbitration, any arbitration which takes place in consequence of an order of the court under section 7 below shall be disregarded.

7Power of court to disapply section 6 where no detriment to consumer

(1)Subject to subsection (4) below, the Court of Session or the sheriff (“the court”) may, on an application made after a relevant difference has arisen, order that section 6 above shall not apply as respects that difference.

(2)No such order shall be made unless the court is satisfied that it would not be detrimental to the interests of the consumer were the difference to be referred to arbitration in pursuance of the arbitration agreement.

(3)In determining for the purposes of subsection (2) above whether there would be any detriment to the consumer’s interests, the court shall have regard to all factors appearing to be relevant, including, in particular, the availability of legal aid and the relative amounts of any expenses which he might incur—

(a)if the difference is referred to arbitration; and

(b)if it is determined by proceedings before a court.

(4)No order shall be made under subsection (1) above where, if (disregarding the arbitration agreement) the difference were to be resolved by civil proceedings in the sheriff court, the form of summary cause process to be used for the purposes of those proceedings would be that of a small claim.

8Construction of sections 6 and 7

(1)In sections 6 and 7 above “consumer” and “consumer contract” have the meanings assigned to those expressions by section 25(1) of the Act of 1977 and “domestic arbitration agreement” has the same meaning as in section 1 of the [1975 c. 3.] Arbitration Act 1975.

(2)For the purposes of sections 6 and 7 above a difference is “relevant” where, if (disregarding the arbitration agreement) it were to be resolved by civil proceedings in the sheriff court—

(a)the form of process to be used for the purposes of those proceedings would be that of a summary cause; or

(b)the proceedings would come within such description of proceedings as may, by order, be specified by the Secretary of State for the purposes of this paragraph.

(3)The power to make an order under paragraph (b) of subsection (2) above shall be exercisable by statutory instrument made with the concurrence of the Lord Advocate; but no order shall be so made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

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