Do not gamble with your consumer terms and conditions

For companies conducting business online, the judgment in the recent case of Green v Petfre (Gibraltar) Ltd t/a Betfred (Green v Betfred) serves as a stark reminder for them to ensure their terms and conditions are drafted in a clear, intelligible manner and easily understood by consumers.

The judgment provides an example of the potentially significant consequences when this is not deemed to be the case.

The facts of the case:

In 2018, during an approximately five hour long session playing the online game ‘Frankie Dettori’s Magic Seven Blackjack’ on the Betfred gaming platform, Mr Andrew Green had amassed winnings of £1,722,500.24, having won the jackpot on three occasions.

Betfred had intended the chances of an individual winning the jackpot once to be 0.00018361%. However, during the aforementioned session, Mr Green had significantly exceeded these odds with three jackpot wins. However, upon attempting to withdraw his winnings, Mr Green was prevented from doing so.

Betfred told Mr Green that there had been a glitch within the game and therefore his winnings would not be paid to him as the terms and conditions stipulated that in such circumstances, Betfred were not required to pay out.

The claim:

In response to Betfred’s refusal to pay out his sizeable winnings, Mr Green brought a claim against Betfred, relying primarily on a specific term within Betfred’s terms and conditions which stated that: “customers may withdraw funds from their account at any time providing all payments have been confirmed”.

Mr Green applied for summary judgment or alternatively an application to strike out the defences raised by Betfred.

Betfred’s defence was based on three documents available on their website, namely the general terms and conditions, the End User Licence Agreement (EULA) and the individual game rules.

To summarise, the terms and conditions provided that Betfred was not liable in the event of communications or systems errors occurring in connection with the settlement of accounts or other features or components of the software.

This was echoed by the EULA which also added that Betfred and their affiliates would not be liable for payments made as a result of a defect or error in the software. Moreover, the game rules informed the user that a malfunction would have the result of rendering void all “pays and plays”. However, the term malfunction had not been defined.

In addition to the above, Betfred also submitted an argument that the parties had believed, mistakenly, that the game had been functioning as Betfred had intended and according to its rules at the time, thereby rendering the contract between them void.

Decision:

The court found in favour of Mr Green, with Betfred not only forced to pay his initial £1,722,500.24 winnings, but an additional £600,000 in interest, due to the more than three years it took Mr Green to receive his winnings.

Foster J’s decision was based on a number of points, four of which are of particular significance, namely:

  • The meaning of the wording used by Betfred within their exclusion clauses. The wording of the clauses was deemed to be inadequate “as a matter of natural meaning of the language in context to exclude liability to payout Mr Green’s winnings in the events which happened”. The fact that the term “malfunction” had not been defined within the terms led to Foster J adopting the natural meaning of the word which she stated was, “a detectable breakdown or interruption in service”. On the facts, the game in question appeared to function flawlessly, simply producing a set of odds that Betfred had not intended. Further, Betfred admitted that had the “glitch” not occurred, the outcome achieved by Mr Green would have been possible albeit extremely unlikely.
  • Secondly, the judge stated that she did not believe that Betfred had adequately signposted the three exclusions on which their defence was based and that they “failed to highlight the meaning and effect intended” as “the unhelpful often iterative presentation in closely typed lower-case or numerous paragraphs of capital letters meant that the relevant clauses were buried in other material”. Foster J went on to add that as a result of the player having to click and scroll through the terms conducting a search for the most relevant to him, it would have been unreasonable to expect Mr Green to have “found and noted the importance of the key clauses relied upon”. Consequently, should the exclusions have been worded in such a way that they had been considered effective to exclude Betfred’s liability, they were not incorporated into the contract.
  • Thirdly, the terms on which Betfred had hoped to rely were neither fair nor transparent as they had not made it clear to Mr Green that Betfred intended to void a payout where a hidden technical defect had occurred through the use of unambiguous language. As a result, they did not meet the requirements of the Consumer Rights Act 2015 and did not bind Mr Green, the consumer.
  • Finally, the judge stated that the doctrine of mistake was not applicable on the facts as performance of the contract was not rendered impossible by the mistake.

Effect of the judgment:

As can be seen, the judgment in Green v Betfred demonstrates the narrow interpretation that the courts can adopt when considering the validity of online terms and conditions. Therefore, it is necessary to take great care when drafting terms and conditions.

The judge noted, somewhat reassuringly, that she does not believe that “acceptance of terms by means of a “click wrap” is inadequate to form a binding contract that contains limitations to or exclusions of liability”.

Nevertheless, it is necessary to ensure that all conditions which could be deemed onerous or unusual for the consumer should be worded in a clear, unambiguous way, this case also highlights the need for signposting of key clauses to bring them to the attention of consumers.

Of particular significance within this judgment is Foster J’s comments regarding the overuse of capitalisation within Betfred’s terms and the reduction this had on the effect. In essence, to highlight everything is to highlight nothing.

Should you require any assistance with drafting or signposting relevant clauses within your terms and conditions, please get in touch with a member of the commercial team.

Authors: Peter Kouwenberg, Associate Solicitor and James Davey, Trainee Solicitor.