They say that the house always wins, but as the recent case of Andrew Green -v- Petfre (Gibraltar) Limited t/a Betfred illustrates, even the house can get caught out sometimes.
When lucky punter Andrew Green won over £1.7m following a 5 ½ hour stint on Betfred’s ‘Frankie Dettori’s Magic Seven Blackjack’ game in January 2018, he was dismayed to find out a few days later that the company was refusing to pay out, claiming that there was a glitch in the game, and that the house rules stated that, in those circumstances, Betfred were not required to pay. Mr Green sued, and the matter eventually ended up in Court. Following a hearing on 15 October 2020, Mrs Justice Foster DBE granted Mr Green summary judgment and awarded him his winnings.
The dispute turned on the meaning and validity of Betfred’s various attempts in its terms and conditions to exclude its liability in certain circumstances.
Background
By the time Mr Green had finished playing on 26 January 2018, he held betting chips to the value of £1,722,500.24 in his online account with Betfred. Initially he was given the impression that, subject to certain checks, he would be able to withdraw his winnings.
However, he was later contacted by Betfred and advised that he would not be paid as his success had been due to a software glitch in the game. Betfred claimed that the glitch, which was unknown to both parties at the time, meant that where play continued without a break, it gave players a much better chance of winning than intended; if play continued uninterrupted for a long enough period, the player would eventually end up holding only winning cards.
The Dispute
In Court, Betfred argued that the relationship of the parties was governed by three separate, but connected, contracts. These were the Terms and Conditions which Mr Green had accepted when he originally registered to play in their Online Casino (“the Terms”), the End User Licence Agreement (“the EULA”), and the rules of each game (“the Game Rules”). Betfred relied on three terms within these agreements, each purporting to exclude and/or limit Betfred’s liability, which it said had contractual effect:
-
- Clause 4.3 of the Terms aimed to exclude liability for the quality of the software by confirming that the software was provided “as is” without any warranties or representations etc and by excluding any warranties (express or implied, statutory or otherwise).
- Clause 4.4 of the Terms confirmed that Betfred did not warrant that the software would be non-infringing, error free or uninterrupted, or that any defects in the Software would be corrected. It stated that in the event of communications or systems errors, neither Betfred nor their software provider would be liable.
- Clause 5 of the EULA essentially mirrored the above clauses whilst also adding that Betfred would not have any liability for any payments made as a result of a defect or error in the software.
- A ‘note on malfunctions’, referred to in the Game Rules of the game played by Mr Green stated that a malfunction voids all pays and plays.
Betfred argued that the clauses absolved it of responsibility to pay out Mr Green in circumstances where there is a hidden defect in the software.
Narrow Interpretation
Foster J held that:
-
- clause 4.3 did not assist and appeared to be a comprehensive attempt to exclude liability for any warranties of merchantability or fitness for purposes, much like clauses commonly found in a contracts for the supply of goods or digital content;
- clause 4.4 of the Terms was not adequate to cover the circumstances of the case, as it did not deal with a failure to pay out winnings, nor a fault, glitch or programming mistake that is undetectable to the parties;
- the Terms did not make clear what “error free” meant and there was no attempt to define terms like “communications or systems errors”; Foster J considered that the words were most likely references to an error relating to one computer system communication with another, for example by delaying a transfer of funds, but ‘at best the meaning was unclear’;
- clause 5 of the EULA was too obscure to cover Betfred’s interpretation that a player’s bet may be voided, and appeared to deal with payments made in error rather than players in the position of Mr Green;
- all the clauses that Betfred relied on to exclude their liability comprehended hinderances to the user that are detectable, and did not cover a hidden defect such as the one found in the game played by Mr Green.
In relation to the Game Rules, Foster J noted that the word “malfunction” was not defined. Absent definition, the natural meaning of the word was a detectable breakdown or interruption in service and indeed, elsewhere in the documents, it was associated with communication interruptions. In this case Foster J observed that, whilst the game functioned flawlessly, it produced a set of odds that were not what Betfred intended. Betfred was forced to concede that what happened to Mr Green was possible, even without the glitch, although it was extremely unlikely.
Incorporation of the terms
Regardless of their meaning, Foster J held that none of the terms were sufficiently brought to Mr Green’s attention to be incorporated into the contracts. The meaning and intent of significant exclusions was not properly highlighted. Whilst it would have been possible to exclude liability if the terms had been properly signposted, attempts by Betfred to draw the attention of the reader, such as the capitalisation of key passages, were over-used to the extent that their power was significantly diminished.
Foster J noted that online consumers are unlikely to spend time trawling through mounds of documentation. Where a company such as Betfred seeks to exclude liability to pay where play has taken place over an extended time period and is on the face of it valid, this can only be achieved through great care and particularity.
Mistake
Betfred also raised what one might call a ‘stocking filler’ argument that both parties had mistakenly believed that the game was functioning properly in accordance with its intended design and rules. In particular, it was argued that the Game Rules required that “trophies are collected from random trophy cards that are dealt to you and the dealer during the initial deal”. In reality, as Betfred argued, they were also allocated because they had been previously designated.
Swiftly rejecting this argument, Foster J held that the mistake did not render the contract incapable of performance (as required by the doctrine of mistake), but simply less advantageous to one party: Betfred.
Lessons Learned
This case is another cautionary tale highlighting the importance of ensuring that exclusion clauses are specific and clear enough to cover the circumstances for which liability is seeking to be excluded. In particular:
- Broad, ambiguous wording is unlikely to ever be sufficient.
- Whether in commercial or consumer contracts, care needs to be taken to signpost significant clauses to the reader. Traditional methods commonly adopted by drafters to highlight onerous clauses, such as through capitalisation of text, are not always sufficient to adequately bring the relevant clause to the reader’s attention. Of particular note in this case is Foster J’s conclusion that the over-use of capitalisation diminished its effect.
- Particularly when dealing with consumers, drafters should endeavour to use plain English and avoid using ‘lawyerly’ language that might be considered obscure. Similarly, drafters will also need to consider whether terms are “fair” so that they meet the requirements of the Consumer Rights Act 2015.
These problems are not new, although Foster J’s condemnation of Betfred’s efforts to highlight their exclusion clauses will cause concern. The practical difficulty inherent in specifically excluding liability for every possible eventuality that might arise is made more burdensome by the need, particularly in consumer contracts, to use clear, plain, ‘unlawyerly’ language.
One possible solution, particularly for online contracts, might be to provide to readers a high-level, plain-English summary of the key exclusions and their intended effect, with links in the summary to the specific contractual language for the curious consumer. This approach ought to satisfy Foster J’s concerns about both the accessibility of the language used and the need to carefully flag key terms to the reader.