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Consumer Arbitration Agreements Act 1988

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4Power 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 court and would not fall within the small claims limit; or

(b)if it satisfies the conditions referred to in section 1(2)(b) above and the order under section 5 below prescribing the conditions in question provides for this section to apply to causes of action which satisfy them.

(5)For the purposes of subsection (4)(a) above proceedings “fall within the small claims limit”—

(a)in England and Wales, if in a county court they would stand referred to arbitration (without any order of the court) under rules made by virtue of section 64(1)(a) of the [1984 c. 28.] County Courts Act 1984;

(b)in Northern Ireland, if in a county court the action would be dealt with by way of arbitration by a circuit registrar by virtue of Article 30(3) of the [S.I. 1980/397 (N.I.3).] County Courts (Northern Ireland) Order 1980.

(6)Where the consumer submits to arbitration in consequence of an order under this section, he shall not be regarded for the purposes of section 1(1)(b) above as submitting to arbitration in pursuance of the agreement there mentioned.

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