Keenan and Riches’BUSINESS LAW

Chapter 14Consumer protection

417

1 How would you define a consumer for the purposes
of framing protective legislation?

2 What justification could you give for providing
special protection for consumers?

3 What contribution has the EC made to the law of
consumer protection?

4 If you had a consumer problem, where could you go
to obtain advice and assistance?

5 How have the Package Travel etc. Regulations 1992

improved the rights of consumers in relation to

package holidays?

6 What matters should you consider before deciding to

sue a trader?

7 What are the advantages and disadvantages of

arbitration as a mechanism for resolving consumer

complaints?

Self-test questions/activities

the consumer from bringing an action in the ordinary
courts. The Consumer Arbitration Agreements Act 1988
was designed to deal with this problem by providing that
a consumer was not bound by a clause in a contract
which said that any dispute must be referred to arbitra-
tion where the amount claimed fell within the small
claims limit for county court arbitrations (see below).
It has now been decided that consumer arbitration
agreements should be dealt with as potentially unfair
terms in a consumer contract and therefore subject to
the protections contained in the Unfair Terms in Con-
sumer Contracts Regulations 1999 (SI 1999/2083). The
Arbitration Act 1996 repealed the Consumer Arbitration
Agreements Act 1988 and extended the application of
the Unfair Terms in Consumer Contracts Regulations
to consumer arbitration agreements. A term which con-
stitutes an arbitration agreement is unfair if it relates to
a claim for a pecuniary remedy which does not exceed
an amount specified by an order made under the Act.

The small claims track

Since 1973 the county court has operated a special scheme
for ‘small claims’. If a claim for £5,000 or less (or £1,000
or less in the case of a personal injury claim) is defended
the case will be allocated to the small claims track. Small
claims cases are usually heard by a district judge but
complex cases can be referred to a circuit judge. The judge

can adopt any procedure he considers fair. The court has

the power to use an external arbitrator if the parties

agree. The procedure for bringing a claim is relatively

straightforward so that it should not be necessary to

have legal assistance. There are a number of leaflets avail-

able from the county court which provide a step-by-step

guide to making a small claim. The parties are discour-

aged from using lawyers by the ‘no-costs’ rule which

means that each side must pay its own legal costs what-

ever the outcome. The only exception is where one of

the parties has incurred unnecessary cost because of the

unreasonable behaviour of the other, e.g. failing to turn

up to a hearing. The procedure for bringing a small

claim in the county court is summarised in Fig 14.3.

Although the small claims procedure is a more user-

friendly method of obtaining redress for consumer

problems than normal civil court procedure, it is not

particularly well-used by consumers. It is often used by

businesses to recover money owing by consumers! The

reluctance to use the procedure suggests that consumers

are generally unaware of the small claims system or

daunted by the prospect of taking DIY legal action. Even

where a consumer pursues a claim and obtains a judg-

ment, it may be more difficult to then enforce it and get

payment. A further problem is that an appeal can be

made against the judge’s decision only on very limited

grounds. Moreover, if a consumer appeals and is unsuc-

cessful, he or she may have to pay costs.