HL Deb 28 July 1977 vol 386 cc1184-6

1 After Clause 9, insert the following new clause:

Arbitration of differences (consumer dealings)

.—(1) As against a person dealing as consumer, an agreement to refer future differences to arbitration cannot be enforced except—

  1. (a) with his written consent signified after differences have arisen; or
  2. (b) where he has himself had recourse to arbitration in pursuance of the agreement.

(2) Subsection (1) does not affect—

  1. (a) the enforcement of arbitration agreements to which section 1 of the Arbitration Act 1975 applies (that is, arbitration agreements other than "domestic" within the meaning of that section);
  2. (b) the resolution of differences arising under any contract so far as it is, by virtue of section 1(2) and Schedule 1, excluded from the operation of section 2, 3, 4 or 7.

2 Clause 14, page 7, line 15, leave out "17" and insert (Arbitration of differences in consumer contracts)"

3 Clause 14, page 7, line 31, leave out" 17" and insert "(Arbitration of differences in consumer contracts)".

4 After Clause 17, insert the following new clause:

Arbitration of differences in consumer contracts

  1. .—(1) In the case of a consumer contract, an agreement to refer future differences to arbitration cannot be enforced against the consumer except—
    1. (a) with his written consent given after differences have arisen;
    2. (b) where he has himself had recourse to arbitration in pursuance of the agreement.
  2. (2) Subsection (1) above does not affect the enforcement of arbitration agreements to which section 1 of the Arbitration Act 1975 applies (that is, arbitration agreements other than domestic "within the meaning of that section).

5 Clause 25, page 13, line 37, after "7" insert "(Arbitration of differences (consumer dealings))".

6 In the Title, line 7, at end insert "and (for the whole of the United Kingdom) to render arbitration agreements unenforceable in certain cases ".

The Commons disagreed to the above Amendments for the following Reason:

7 Because they do not consider the arbitration procedure proposed to be appropriate.

Lord JACQUES

My Lords, with the leave of the House, I beg to move that this House doth not insist on their Amendments Nos. 1 to 6 to which the Commons have disagreed for the Reason numbered 7. Your Lordships will recall that this group of Amendments was moved in this House at Report stage. Their purpose was to extend protection to a consumer when a dispute subsequently arose, by giving him an opportunity to avoid arbitration being forced upon him when, for whatever reason, he would rather go to the court and have the dispute settled there. Arbitration clauses are not infrequently to be found in the small print of contracts, and it seems to me to be wrong that a consumer should have arbitration forced upon him when a dispute arises.

I remain of the opinion that these Amendments are improvements to the Bill. I know that they did not find universal favour among your Lordships, although in the event they were accepted without a Division. We have now reached the position where the other place has rejected these Amendments. Time is, therefore, getting very short. To avoid losing the Bill altogether, I would ask the House to accept the disagreement of the other place and not to insist on our Amendments. I beg to move.

Moved, That this House doth not insist on the said Amendments to which the Commons have disagreed.—(Lord Jacques.)

Lord HAILSHAM of SAINT MARYLEBONE

My Lords, I rise to say, as I said when the Bill was going through your Lordships' House, that the Commons have been exceedingly wise. The Amendments affecting arbitration clauses were retrogressive and contrary to the whole movement of opinion in commercial law in both this and other countries. I fully accept the proposal of the noble Lord, Lord Jacques, but with a greater sense of enthusiasm than he himself has felt able to display.

The LORD CHANCELLOR

My Lords, perhaps I may be permitted to say that it is with slightly less grace than the noble and learned Lord who has just spoken that I, too, bow to the views of the House of Commons on this matter, although it may well be that we shall have to revert to it on a future occasion.

Baroness PHILLIPS

My Lords, in support of my noble friend I should like to say that at the end of a Session like this it is always sad when we have to recognise that if we do anything more to a Bill inevitably it will be lost. It seems to be a rather unfortunate point of principle that we have to bow to the inevitable in order to get this Bill through Parliament. However, I was heartened to hear, in the careful words of the noble and learned Lord, that we may return to this matter later.

On Question, Motion agreed to.