Is it legal for a business to refuse to serve some customers?

Many customer-focused businesses have problems serving customers at one time or another. However, simply refusing to serve potential customers does cause potential risks to the business, including bad publicity and even potential lawsuits.

The recent news that Northern Ireland based Ashers Baking Company did not discriminate when they refused to make a cake promoting same-sex marriage does seem to indicate that there are circumstances when it’s legally acceptable to refuse to serve customers. However, this so-called “gay cake” legal case has rumbled on since 2014, until it was eventually dismissed by the Supreme Court. A similar case involving the Masterpiece Cakeshop in Colorado was also taken to courts in the United States on the grounds of discrimination. Both these bakeries cited their own religious beliefs as the reason they refused to serve these customers.

Is legal to refuse service?

In the United States, the main law that addresses the refusal to serve a customer is the Civil Rights Act of 1964, which covers discrimination against protected classes, such as race, gender, disability, religion, etc. This is the reason the Masterpiece Cakeshop was sued.

Here in the UK, legislation is much the same. Any business does have the right to refuse to provide a service, however, it’s important to ensure this is not discriminatory. If a business refuses to serve a customer on discriminatory grounds, it is illegal. Discrimination includes issues such as gender, sexuality, ethnicity, religion or disability, which are all protected characteristics.

What can refused customers do?

Customers who feel they have been treated in an unfair manner by a trader or service provider may have grounds for action under the terms of the Equality Act 2010. This was the basis of the action taken against Ashers Baking Company in Ireland, as their refusal to bake a cake promoting gay marriage was seen as discriminatory due to the fact the order was placed by a gay customer. Ashers lost the original law case and also an appeal, as they insisted their refusal to make the cake was based on the message on it and not on grounds of discrimination against the customer. Five Supreme Court judges eventually found in favour of the bakery, in a law case which lasted four years and cost £500,000.

Strict guidelines are in place for solicitors when it comes to refusal to provide a service and the Legal Ombudsman can be contacted by customers who have been refused the services of solicitors.

The Law Society advise that reasonable refusal to serve clients should only take place in the following circumstances:

– where a law firm does not actually undertake work or services of this nature
– if the client is unable to pay for the service requested
– in circumstances where the law firm is too busy to carry out this work
– on ethical or regulatory grounds, for example if it’s suspected the client is carrying out money laundering, or on insurance grounds
– if the job is too complex and there is not the needed expertise within the law firm

Any business could face cases of discriminatory behaviour, but it is possible to opt for business legal protection insurance. This type of insurance offers protection against a variety of situations that could be faced by business owners. Insurance Octopus is an independent business insurance broker and can help you ensure you are covered against any eventuality.