The decades-old principle that clauses in contracts that are particularly onerous (such as those that exclude or severely limit the liability) must be adequately brought to the attention of the “buying” party is familiar to many.
However, the recent decision in Green v Petfre (Gibraltar) Limited (t/a Betfred) has brought this principle up to date, with the court determining that exclusion clauses in Betfred’s on-screen “clickwrap” terms and conditions had not been adequately brought to the attention of a gambler who was seeking to recover £1.7m of winnings.
On 26 January 2018, after having played “Franki Dettori’s Magic Seven Blackjack” for over five hours, Andrew Green had amassed winnings of £1,722,500.24. When Mr Green contacted Betfred to claim his winnings he was informed that Betfred would need to carry out a systems check with the game’s creator, Playtech, on account of the winnings being so large.
Subsequently Playtech notified Betfred that there had been a technical glitch in the game to the effect that the odds of Mr Green winning the jackpot had increased significantly from 0.000018361%, to Mr Green being able to win the jackpot three times in one visit. The “glitch” had been a failure of the game to re-set itself, resulting in Mr Green accumulating more “trophy” cards than the game should have let him, thereby increasing his chances of winning the jackpot. Neither Betfred nor Mr Green were aware of the glitch at the time.
Mr Green issued a claim for recovery of his winning asserting that Betfred’s refusal to pay was a breach of a promise contained in the terms and conditions document that customers may withdraw funds from their account at any time.
Relying on exclusion clauses contained in its terms and conditions, an End User Licence Agreement and in the Game Rules, Betfred argued that it was entitled to refuse to pay out winnings on account of there being a defect in the game.
Mr Green applied to strike out Betfred’s defence asserting that Betfred did not have a realistic prospect of succeeding in its defence. The basis of Mr Green’s application was that:
- The meaning of the exclusion clauses did cover the actual technical glitch that had occurred
- The clauses had not, in any event, been sufficiently notified to him and so had not been incorporated into the contracts with Betfred
- Even if incorporated, under the Consumer Rights Act 2015 clauses of this nature were required to be fair and transparent, and they were neither
In a damning judgment on the quality of the drafting of the contracts upon which Betfred relied, Mrs Justice Foster sympathised with Mr Green’s position.
As to the meaning of Betfred’s exclusion clauses, the judge analysed in detail the terms relied upon, and identified drafting inconsistences, typographical mistakes, unnecessary use of capitalised lettering, unclear layout and terminology which, whilst not fatal to reliance upon an exclusion clause, were “not at first blush features of an open and fair consumer contract that is easy to access and understand”.
These issues aside, the judge considered that the exclusion clauses relied on in the terms and conditions, the EULA and the Game Rules were simply not apt to cover the particular circumstances of the case, namely a hidden defect (which, the judge was at pains to point out, is quite different from a malfunction, breakdown or interruption in service which is what the exclusion clauses all seemed to be addressing).
On the second question, the judge found that none of the terms seeking to exclude liability had been sufficiently brought to the attention of Mr Green. This was due to a combination of inadequate signposting of these exclusions of liability, and a failure to highlight the meaning and effect of the exclusions that Betfred intended. Such terms should have been more adequately drawn to the attention of Mr Green - “burying” them in closely-typed lower case text, or in numerous paragraphs of capitalised letters was insufficient. Commenting on the mechanism by which acceptance of terms and conditions is signalled (sometimes known as “clickwrap”), the judge made it clear that binding contracts could still be formed this way. However, in the context of a gambling site where “a player is most unlikely to spend significant time trawling through documentation, particularly if it is repetitive and not clearly relevant to him”, excluding the operator’s obligation to pay “is something that would need to be achieved with great care and particularity”.
Not surprisingly, in addressing the third issue, the judge was not satisfied that the requirements of “transparency” (i.e. a term expressed in plain and intelligible language) and “fairness” (taking into account the nature of the subject matter of the contract and the knowledge of the consumer signing up to it) under the Consumer Rights Act had been met.
Mr Green therefore succeeded in striking out Betfred’s defence and was entitled to the £1.7m winnings that had been withheld from him.
This case provides a salutary reminder that businesses must pay close attention to how the “small print” is drafted in any contracts with consumers. As in this case, these issues often come to the fore in an online setting where terms and conditions can be accepted with the click of a mouse button, and businesses may wish to give this further thought particularly given the ever-increasing digitisation of the consumer marketplace.
A business who seeks to hide (or inadequately signpost) key terms or fails to make clear precisely the circumstances in which a transaction may be voided is unlikely to be able to avail itself of clauses limiting its contractual obligations.
This judgment shows that courts will also scrutinise the “look and feel” of the terms and conditions – font size, syntax, formatting etc. – as part of its investigation as to whether onerous or unexpected clauses have been sufficiently brought to the attention of the consumer.