Green -v- Betfred – online gaming platform unable to rely on exclusion of liability clauses to avoid pay-out to winning customer

Introduction

The growth of online gaming in England means that gamblers are now more likely to be found at computer screens than casino tables. This was illustrated by the case of Andrew Green v Petfre (Gibraltar) Limited t/a Betfred [2021] EWHC 842 (QB), in which the Court held that the Defendant was unable to rely on exclusion clauses in its terms and conditions to avoid paying out GBP1.7 million to the Claimant after a glitch in one of the Defendant’s online games resulted in a significantly higher chance of winning a jackpot than had been intended.

Key Points

• Vague exclusion clauses may not cover the desired events.
• Opaque drafting and poor sign-posting may void the incorporation of exclusion clauses. Such drafting may also result in reliance on such clauses being negated at common law or by the Consumer Rights Act 2015.
• Click-wrap agreements may not always be relied upon indefinitely.
• Clauses drafted to incorporate other documents via reference may not be effective if they are unclear with regards to the impacts of incorporation.

Facts

In January 2018, Andrew Green (the Claimant), logged into his online Betfred account and played a virtual card game. He won the game’s jackpot three times in quick succession, accruing net winnings of GBP1.7 million. The Defendant instructed the game’s provider to verify the winnings and discovered that a software glitch had vastly increased the odds of the game’s jackpot prize being won. The Defendant refused to pay out.

The Claimant sued for the winnings and issued an application for summary judgment on the grounds that the Defendant had breached clause 2.4 of the Defendant’s Terms and Conditions (Terms) which, the Claimant argued, enabled players to withdraw funds from their account at any time.

Parties’ legal positions

Defendant counsel argued that:

• clause 2.4 of the Terms only applied to monies deposited by players;
• clause 4.4 of the Terms and clause 5 of the End User License Agreement (the EULA) - which the Claimant accepted together with the Terms via a “click-wrap” agreement - provided that the Defendant was not obliged to pay out if the game had a defect;
• the rules of the game (the Rules) were incorporated into the contract between the Claimant and the Defendant (the Contract) by the EULA and the Rules provided that the Defendant was not obliged to pay out in the event of a malfunction; and
• the Claimant and Defendant were operating under a mutual mistake which voided the Contract.

Claimant counsel countered that:

• the clauses the defence was predicated on (the Clauses) did not exclude liability in this instance;
• notification of the Clauses was insufficient for incorporation; and
• the Consumer Rights Act 2015 (CRA 2015) and common law required such clauses to be “clear, fair, and transparent”, which, Claimant counsel argued, they were not.

Judgment

Summary judgment was granted in favour of the Claimant and the Defendant was ordered to pay the Claimant his winnings.

The key questions before the Court were:

1. the meaning of the Clauses;
2. whether the Clauses were incorporated into the contract; and
3. whether the Claimant could rely on the Clauses to exclude liability.

It was held that:

1 – Meaning of exclusion clauses

• The clauses in the Terms were not sufficiently clear to exclude the Claimant’s liability with regards to winning bets. Clause 4.4 of the Terms “is not dealing with the failure to payout winnings at all” whilst the vague and rambling clause 4.3 of the Terms was too unclear to be of use as it: “appears to relate first to questions of copyright then to the operation of the software which is not warranted as being without error or without interruptions…There is no warranty that problems will be corrected. There is then a disclaimer about viruses.”
• The clauses in the EULA lacked the clarity to exclude such liability, as exemplified by the fact that the word “malfunction” was not defined. Foster J concluded that to interpret those clauses so as to exclude the Defendant’s liability in such circumstances “requires a strained and unnatural meaning to be given to the terms.”

2 – Incorporation of exclusion clauses

• Even if the clauses did cover the software error, the Terms and EULA did not incorporate the clauses into the Contract. Their unclear drafting was one factor behind this. The Terms were hard to decipher and some 24 pages long. The EULA was “long and complex, repetitive, both internally, and in terms of areas of its content has similarity with the Terms and Conditions…in parts, obscure.” Further, the fact that the Claimant had not seen the EULA since he clicked to accept its terms in 2013 (when he had opened his Betfred account) meant that, absent a reminder, it was “fanciful” to argue that the EULA’s terms had been brought to his attention sufficiently for the purposes of excluding liability.
• Foster J noted that “click-wrap” terms and conditions were not necessarily an ineffective means of bringing a clause to a contractual counterparty’s attention but that, in this instance, the drafting and signposting had been inadequately clear.
• As to the incorporation of the game Rules by reference, it was found that clause 2 of the EULA, a coverall which provided for the incorporation of all rules on the Defendant’s website and in the relevant software into the Contract, was not sufficient notification-wise to bind the Claimant to a powerful exclusion clause.

3 – Reliance on exclusion clauses

• The unclear drafting of the Terms and EULA meant that said documents were not transparent as per section 64 CRA 2015 as their “opaque and difficult” drafting meant that they would not be clear to the average consumer.
• On fairness, Foster J found that “The obscurity of the language, the context of the contract, and the failure adequately to signpost the exclusion clauses and explain their consequences to the player are inconsistent with the fairness envisaged by the Act”.
• Therefore, even if the Clauses were incorporated into the contract between the Claimant and Defendant, they could not be relied on by the Defendant.
• The doctrine of mistake was inapplicable as the non-existence of the presumed jackpot probability was the Defendant’s fault and the Contract had been performed.

Recommendations

Companies seeking to rely on exclusion clauses should ensure that such clauses are clearly drafted and well signposted. This is fundamentally important to the effectiveness of exclusion clauses both in terms of contractual incorporation and reliability under consumer rights legislation.

Click-wrap terms and conditions can be effective but must be clear. If consumers have not read such terms and conditions for substantial period of time, they ought to be reminded of, and asked to agree to, these terms again.