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A growing number of business-to-consumer (B2C) contracts provide for arbitration, a mechanism for resolving disputes outside domestic courts. This can have advantages for both parties, including enforceability, flexibility, privacy and finality particularly where the contractual relationship spans different jurisdictions.

But arbitration is not always available for consumer disputes. For example, while arbitration clauses are increasingly found in US[1] B2C contracts, in the UK, compulsory arbitration for claims of £5,000 or less is deemed automatically unfair and unenforceable against the consumer. This restriction arises from consumer protection laws intended to avoid arbitration being used to fetter a consumer's recourse to justice. Where the claim exceeds £5,000, consumer arbitration is not automatically unenforceable, but its fairness will be assessed in context. Businesses including mandatory arbitration in their B2C contracts therefore need to think carefully about: (i) how to structure the clause to ensure enforceability (ie, how to ensure the clause is fair for the consumer in question); and (ii) their playbook if a consumer does not want to arbitrate once the dispute arises.

The surge in digital services that operate across borders, particularly since the Covid-19 pandemic, has led to a notable rise in the use of arbitration agreements in B2C contracts. This trend is not limited to a specific sector but is especially prevalent in fast-paced industries like finance, tech and digital assets. These digital services, many of which are of global reach, are increasingly leveraging sophisticated online terms and conditions. Unlike traditional contracts that were once penned on paper, these mandatory terms are now embedded within the digital architecture of websites, often in the form of browse-wrap and click-wrap agreements. The growing use of arbitration in these B2C terms is a testament to its clear benefits for both businesses and consumers, offering an often more efficient and flexible approach to dispute resolution.

Click-wrap agreements

Often contained in a pop-up, they require the user to scroll through the terms of use and affirmatively click a button or tick a box stating "I agree" before accessing the site.

Browse-wrap agreements

A website displays a notice or a banner notifying the user they agree to the site’s terms of use (available via a hyperlink) by using the site. The user is not required to click any button, nor take any affirmative action to indicate their acceptance of the terms.

This has led to a recent spate of cases considering the enforceability of consumer arbitration, many of which have arisen in the context of cryptocurrencies and digital assets. One of the key ingredients for a valid arbitration clause is that the parties must have mutually agreed to resolve their disputes through arbitration. Debate has arisen (among other things) as to whether click-wrap or browse-wrap agreements sufficiently bring arbitration clauses to the consumer's attention.

Recent cases in England and Singapore

Four recent cases addressed the interaction between consumer rights and arbitration. 

Plainly, the B2C arbitration landscape is changing and contentious. So, what should companies take away from the rapidly growing body of cases? The key practical considerations (from the highlighted cases in this article and elsewhere) are as follows:

  • An arbitration clause may be deemed unfair if it is contained within mandatory terms and conditions that are non-negotiable and not clearly signposted to the consumer.
  • Companies need to ensure their website architecture is designed carefully to ensure that online terms, including arbitration clauses, are sufficiently brought to the attention of users.
  • While click-wrap agreements may provide evidence of sufficient notice of arbitration clauses to consumers, arbitration clauses in browse-wrap agreements may be less likely to be enforceable as these do not require the user's active agreement.
  • Companies need to ensure that their arbitration clauses are tailored to the particular consumer to ensure they are fair. For example, they may wish to provide that the arbitral seat and governing law reflect the consumer's country of residence (depending on the potential jurisdictions involved). If a dispute is likely to involve domestic law concepts, that is another reason to consider this.
  • Consider tailoring the arbitration process and the level of arbitrator / administrative fees to the value of the claim.

These are only some of the many issues to be considered in this context. If you would like to investigate B2C arbitration for your business, please do reach out.

  1. A 2019 study in UC Davis Law Review Online (PDF) found that 81 of the 100 largest U.S. companies now use arbitration in their consumer contracts ( 

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London Singapore International Arbitration Dispute Resolution Technology, Media and Entertainment, and Telecommunications Technology, Media and Telecommunications Consumer International arbitration Charlie Morgan Hayley Brady Jake Savile-Tucker Rachel Kane Elizabeth Kantor