The winner takes it all (the loser’s ts and cs were too small): Green v Petfre (Gibraltar) Limited t/a Betfred [2021] EWHC 842 (QB)

Mrs Justice Foster DBE's decision is of interest not just to the gaming industry but to all businesses who conclude consumer contracts online. The court was scathing of the “lawyerly” phrases Betfred sought to rely on in its “long and complex, repetitive…and...in parts, obscure” terms and conditions. Amongst other things, the obligation on the player to “consult an attorney” if in any doubt as to the meaning of the terms and conditions was, the court held, a “singularly ineffective attempt to shift the burden of providing clear language and proper warning where liability is sought to be excluded”.

The claim

Mr Green relied upon Clause 2.4 of Betfred’s Terms and Conditions for his claim: “Customers may withdraw funds from their account at any time providing all payments have been confirmed.”

Betfred defended Mr Green's claim in 5 different ways. It argued:

• Clause 2.4 of the Terms and Conditions related to a customer withdrawing money it had placed into an account. It did not apply to payment out of “chip balances”;
• Clause 4.4 of the Terms and Conditions and clause 5 of the End-User Licence Agreement (the "EULA") allowed Betfred not to make payment where there was a defect in the game (and, on the facts, Betfred argued that there was such a “glitch” or defect in the game);
• The rules of the game (incorporated by reference under clause 2 of the EULA or by necessary implication) excluded liability for payment in the event of a malfunction; and/or
• The parties were operating under a mutual mistake which voided the gaming contract.

Betfred also argued that, as well as having substantive defences to the claim, the claim was not suitable for summary disposal because it related to standard terms in the online gaming industry which had wider implications, necessitating expert evidence and a full trial of the issues.

The issues

Mrs Justice Foster DBE considered that there were three main issues to be determined:

• Meaning - What did the clauses Betfred relied upon actually mean, and did they exclude liability?
• Incorporation - Were any of the clauses incorporated into the contract with Mr Green?
• Fairness - Was there any statutory or common law prohibition on Betfred relying on the exclusion clauses?

Meaning

In applying the approach to construction set out by Lord Hodge in Wood v Capita Insurance Services Ltd [2017] AC 1173¹, Mrs Justice Foster DBE identified “infelicities of presentation” in Betfred’s terms and conditions, which she concluded did not represent “features of an open and fair consumer contract that is easy to access and understand”. The exclusion clauses Betfred sought to rely upon were, she held, “purported attempts to exclude the generally implied terms of merchantability of fitness for purpose”. To the extent that they went further than that and sought to exclude liability in the way in which Betfred asserted, the language was “obscure and unclear”.

Mrs Justice Foster DBE’s conclusion on the various exclusion clauses upon which Betfred sought to rely (in particular those relating to malfunctions and defects), was that the language was “inadequate to exempt Betfred from the obligation to payout on an ostensibly winning bet or series of bets”. Had that been the intention of Betfred’s terms, the language would have needed to be much clearer.

Incorporation

Even before legislation such as the Consumer Rights Act 2015 (the “Act”), it was well established that unusual or onerous terms will only be incorporated with sufficient notice. In the iconic words of Lord Justice Denning²: "[s]ome clauses which I have seen would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient". In summary, Mrs Justice Foster DBE concluded that each of the clauses upon which Betfred sought to rely fell within that category.

Mrs Justice Foster DBE held that, particularly in the context of an online betting contract, a player would be “most unlikely to spend significant time trawling through documentation, particularly if it is repetitive and not clearly relevant to him. The exclusion of or limitation to liability to pay in circumstances where play has continued over a number of hours and is ostensibly wholly valid, is something that would need to be achieved with great care and particularity.”

Fairness

The Act requires that in contracts between traders and consumers (such as this one), terms and notices must be transparent and fair. Unfair terms will not bind the consumer. While Mrs Justice Foster DBE accepted that Mr Green was an experienced and competent player of online games, it held that for Betfred to be able to rely upon the exclusion clauses relating to defects (in the form it argued they operated) the contract would have required a fuller and clearer description and unambiguous language to satisfy the requirements of the Act. The obscurity of the language, the context of the contract, and the failure adequately to signpost the exclusion clauses were held to be inconsistent with the fairness envisaged by the Act.

Limiting liability in consumer contracts

Consumer contracts are subject to complex law and regulation. Fundamentally, however, Betfred was unable to rely on its terms and conditions because it was unclear (even to a High Court judge) what they meant. Clarity in drafting of contractual obligations is crucial, and even more so when a contracting party is a consumer.

In the instant case, Mrs Justice Foster DBE was unpersuaded of any need to refrain from considering these issues on a summary basis because of the “possible wider potential scope of the decision within the industry”. Put simply, she said, “the central issue is whether these clauses do what the Defendant says they do”. The answer, “as a matter of the natural meaning of the language” was that they did not.