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Court decision: OFT - v- Ashbourne Management Services Limited
As the festive season approaches the temptations increase: a mince pie here, a gluhwein there, not to mention the big box of chocolates you receive on Christmas day and can’t seem to resist dipping into throughout the holiday period.
Come January, with the waistband a little tighter, you may be thinking about New Year’s resolutions, getting fit, going running, and possibly even joining a gym. You have a look around the gym, imagine yourself doing all of that invigorating exercise and then sign on the dotted line, which usually means paying a monthly fee for the privilege of using the gym’s facilities.
The trouble is you start off well, but by February it will be getting harder and harder to keep going. So what happens if you decide that you no longer wish to be a gym member?
In the past many gyms would impose lengthy minimum terms and hefty charges for cancelling your membership early. If a member stopped paying before their term had ended the gyms often demanded payment of the full amount for the whole of the agreed period.
The Office of Fair Trading considered a number of these contracts and took the matter to the High Court. OFT v Ashbourne Management Services Limited (operator of membership schemes for a 1,000 independent gyms across Britain) has proved to be a landmark case. The High Court ruled that the following terms in the contracts were unfair and could not be enforced:
- terms in certain contracts which required consumers to pay in full for the remainder of the minimum membership period if they wished to cancel during this period.
- terms which tie consumers in for more than 12 months. The judge indicated that if there is a longer period it would be unfair unless the consumer could give 30 days notice to cancel, and pay a modest sum in compensation. The court was willing to accept a 12 month minimum period in contracts which contain more circumstances in which the consumer can suspend or terminate their membership for stated reasons.
- terms which purport to entitle the gym to demand payment of sums which have not already fallen due where the consumer is less than 3 months behind with payment (and then only when the consumer is given a month to pay).
Mr Justice Kitchin ruled that Ashbournes business model was ‘designed and calculated to take advantage of the naivety and inexperience of the average consumer using gym clubs.’ If you feel that you are currently signed into a gym contract, which is long term with no room to terminate, or there are heavy handed collection techniques if you attempt to do so, then a few minutes advice from one of our experienced litigation solicitors can help. We will ensure you know your legal rights and can negotiate on your behalf.
Our Litigation team are here to help:
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