An archived article that we wrote in June 2021…
For those of you who are old enough to remember 80s girl group Bananarama (and their collaborators, Fun Boy Three), you will recall their 1982 hit “It Ain’t What You Do (It’s The Way That You Do It)”, a song that should be the opening score to Mrs Justice Foster’s recent judgment in the case of Mr Andrew Green -v- Betfred. It’s a decision that should sound alarm bells throughout the online gaming industry and is a call to arms for operators to review their terms and conditions.
Background
In brief, Mr Green had been playing a newly released online game called ‘Frankie Dettori’s Magic Seven Blackjack’ on Betfred’s website, from which he accumulated winnings in excess of £1.7 million. Betfred referred the matter to the game provider, Playtech, who advised them that the winnings had arisen due to a “glitch” in the game and that Mr Green should not be ‘paid out’. Mr. Green duly took legal action to sue Betfred who defended the claim primarily on the grounds that Mr Green had accepted terms and conditions that contained an exclusion of liability to payout for software malfunctions.
Decision
Mrs Justice Foster issued a summary judgment (i.e., seeing no need for a trial) which runs to forty-four pages and essentially concluded that the exclusion of liability clauses were neither transparent nor fair and so Betfred was not entitled to rely on them. Betfred was ordered to pay out Mr Green’s winnings plus interest.
The running theme of the judgment is one of total dissatisfaction (nay, disgust) with the state of the website’s terms and conditions, the game rules and the end user licence agreement for the game itself. “Inadequate signposting”, “obscurity of language” and “opaque and difficult” are just a small selection of some of the phrases used in the judgment to characterise the terms and conditions; in fact, the majority of the forty-four page judgement is a forensic dismantling of the terms and conditions. Unfortunately, this is of no surprise; on many occasions, we have been asked to review existing terms and conditions that are simply not fit for purpose and present themselves as a hotch-potch of terms that have been contaminated over many years by clauses that are either outdated or have been added as a band-aid. The effect of this approach is a patchwork quilt of terms that make little sense and are effectively rendered unenforceable.
The following is a summary of the key failings identified in the decision:
1. Unclear Wording: the wording within the terms and conditions and, particularly in relation to the critical exclusion clauses, was not clear.
2. Failure to sign-post: exclusion clauses that were “buried” within the terms and not sufficiently drawn to the consumer’s attention were deemed inadequate.
3. Unfair and not transparent: clauses that were not sufficiently transparent or fair under the Consumer Rights Act 2015 could not be relied upon.
4. Repetitive Information: it was not reasonable to expect players to spend substantial time sifting through documentation containing repetitive information to locate the key terms.
The judgment refers to a “number of infelicities of presentation” in the terms and conditions, concluding it was iterative, repetitive, inconsistent and even noting typographical mistakes and closely typed clauses. In itself, this might not seem important but it is absolutely critical that terms and conditions in any consumer context should be plain, intelligible and well sign-posted; anything other than that is potentially fatal, if challenged. The fact that the terms were presented in an “unhelpful” manner and so were not sufficiently brought to Mr Green’s attention resulted in a significant exclusion of liability term not being deemed to be incorporated in the terms.
One of the specific findings of the judgment was that there was no definition of the meaning and extent of the word “malfunction” and so the Judge concluded that it could not be applied. The game itself functioned flawlessly but produced a set of odds that were not what was intended. On that basis, the term “malfunction” could not be applied to the exclusion clause on which Betfred sought to rely.
One of the pillars of the Consumer Rights Act 2015 is that an unfair term will not bind the consumer. Again, the fact that the exclusion clauses (and the terms in general) were not clearly sign-posted to the player meant that they were inconsistent with the fairness envisaged by the Consumer Rights Act. In short, prominent terms must be brought to the consumer’s attention in such a way that the average consumer would be aware of it.
Exclusion Clauses
It is important to understand that the judgment does not mean that exclusion clauses cannot be effectively used by gaming operators. If properly applied and presented, exclusion clauses can still provide important protection in the event of errors occurring.
What to do?
Clearly, there are a number of matters that all operators should be considering carefully in the light of this decision. First and foremost, operators should be reviewing their terms and conditions by pulling together expertise from legal, compliance, finance, tech and customer services. It is a feature of the respective skill sets and experience that each of those departments will have their own insights and, ultimately, your legal advisors will need to pull those insights together into a set of terms and conditions that are clear and enforceable.
The following is a summary of practical points to consider:
- ensure that the terms are well structured and provide easily identifiable sections for each product offered on the website.
- the layout of the terms should be well presented, with consistent use of definitions of and clear numbering throughout.
- avoid repetition.
- any documents that are referred to (e.g., privacy policies and game rules) must be easily accessible – use clearly visible hyperlinks.
- consider using ‘scroll to accept’ technology so that customers must work their way through the terms in order to provide their acceptance.
- periodically ask customers to re-accept terms rather than relying on terms that they may have accepted several years earlier.
- consider moving sections that are not legal terms into a separate FAQs section; it is not uncommon to see functional matters (e.g., how to withdraw funds) in terms and conditions which can often get in the way of the essential legal terms.
- draw key terms to the customer’s attention; signpost essential clauses in a summary of the key terms and, where appropriate, use capitalised wording, although don’t overdo it as the Judge noted that “the prolific use of capitalisation…diminishes its power”.
- ensure that any exclusion clauses relating to game errors are in the terms and conditions rather than the game rules. Any such exclusions must be carefully drafted to fully capture what is meant by “errors” or “malfunctions” and the consequences of any errors or malfunctions occurring.
- if game rules do contain important terms, then you may need to ask customers to accept those separately.
- assess whether the terms are fair and reasonable; is there anything there that you might think was confusing or unfair if you were the consumer? Clarity and transparency are ultimately the key and it is vital that operators view their terms and conditions through the lens of their consumers.
Finally, as a separate exercise, operators should consider the exclusions and limitations of liabilities in their agreements with content providers. It is becoming increasingly common to see provisions that dilute or limit the liability of game providers for errors arising in their games. Such agreements will often contain “large win procedures” which, in itself, is not a bad thing provided that it should not allow game providers to relive themselves of liabilities. Game providers may also seek to contractually commit operators to include their own EULAs on the consumer website and these should be examined with the same scrutiny as the general terms and conditions and how the two interact.
Conclusion
The judgment in Green -v- Betfred has brought into sharp focus that terms and conditions are an essential component of an operator’s business and not merely something that sits in the footer of the website. The cost of inefficient terms and conditions can be considerable and so, as the industry continues to thrive to achieve best practice, it may be time to dust down those terms and give them a full refresh. It ain’t what you do, it’s the way that you do it….and that’s what gets results.