Every new year, at the stroke of midnight, thousands of people—myself included—make that familiar wishful resolution: to hit the gym and #transform, or simply to embrace the trending wellness movement. Fuelled by a surge of enthusiasm and the promise of a ‘new year, new me,’ many rush into purchasing long-term gym memberships. Yet, come February, it often feels like you could mistake the gym for a deserted island, with equipment collecting dust and motivation waning. But here’s the good news: gyms can't easily lock you into long-term contracts with unfair terms—thanks to the decision in The Office of Fair Trading v Ashbourne Management Services Ltd & Ors [2011] EWHC 1237 (Ch).
Ashbourne Management Services Ltd managed contracts between customers and gyms across the country, drafting membership agreements for approximately 300,000 individuals. A problematic aspect of their policy required full payment of the subscription if members cancelled before the minimum commitment period—ranging from one to three years—without options reflecting fair termination terms. Many customers faced situations where attending the gym became impractical or unaffordable. However, Ashbourne maintained a strict approach, even reporting unpaid debts to credit agencies, impacting credit scores. By July 2009 alone, this led to 17,000 reported defaults.
Ashbourne’s business proposal outlined their strategy: "Just the threat of Default Registration brings the vast majority of defaulters back on track." Many gyms use standard agreements requiring members to commit to long-term contracts, often starting at a minimum of one year. This approach could pressure individuals into signing and facing financial consequences if they defaulted. The claimants argued these agreements violated consumer protection laws. The concerns are clear—if committing to a TV series feels daunting, a long-term contract is substantial.
The Court agreed with the claimants, ruling that Ashbourne's standard form agreements were unfair and violated consumer protection laws. The terms were found to be traps for consumers, not allowing for fair exits from the contract. The ruling enforced stricter consumer protections, requiring Ashbourne to stop credit agency notifications for defaults or cancellations.
As Mr Justice Kitchin stated at paragraph 174, 'The terms of Agreements 1-10 setting minimum membership periods of 12, 24 or 36 months are so weighted as to cause a significant imbalance... contrary to good faith.'
OFT v Ashbourne Management Services serves as a reminder that consumers deserve transparency and fairness in transactions—a principle that all businesses should uphold. So, the next time you sign a gym contract, make sure to read the terms carefully!
At CaseSnappy, we’re committed to breaking down judgments with the same consistency as your law school studies. Our mission is to equip you with knowledge and clarity in both fitness and law. Check back next week for another edition of Decoding Judgments—because, just like in the gym, consistency is key!