Gambling with your online terms?
But have you ever actually read the terms? Has anyone other than the lawyers who drafted them? For businesses, this poses a serious question; how can they enforce terms they know consumers are unlikely to read and how do they make sure they are “fair and transparent” as required by the Consumer Rights Act 2015? If they are not “fair and transparent” the business will not be able to rely on them.
This, of course, is an issue which hit the headlines this week after online casino player Andrew Green won a High Court case against Betfred’s refusal to pay him £1.7m winnings.
The David slaying Goliath story is compelling. Mr Green played Blackjack on the Betfred casino one night. After a couple of hours play he had won “chips” worth over £1.7m. He went to withdraw them and his request was declined. Eventually, Betfred told Mr Green that an error in in the software had meant that Mr Green had won in error. Betfred sought to rely on various terms in several different sets of terms to limit their liability. In a summary judgement, the High Court held that Betfred could not rely on them. Betfred has said it will not appeal the decision and will now pay Mr Green his winnings, plus interest and costs.
The parts of Betfred’s terms that are quoted in the judgement are fairly typical of other click wrap terms. The judgment does not break new ground but it does give a detailed insight in to how the courts will interpret online terms if they are challenged.
I think it is fair to say that the court was fairly damning of Betfred’s terms, describing them as, “iterative and repetitive”, “obscure and unclear”, “long and complex”, “singularly ineffective” and “opaque and difficult”.
What could have saved Betfred?
Using clear language is vital if you want to exclude liability. One of the key points in the case was whether an exclusion for a “computer malfunction” would cover an error in the software. The judgment is clear, it does not, as a user would have associated that term with a hardware error rather than a software error. Had Betfred better described what the term malfunction meant and explicitly included software errors, they would have had a better chance of it covering the liability they were seeking to exclude.
Other than some generic language at the beginning of the terms and copious use of capital letters throughout the terms, Betfred made no attempt to bring exclusions to a user’s attention.
The law has long required a party that wants to rely on “onerous or unusual” terms, such as limits or exclusions of liability, to bring it to the attention of the other party. It is not enough to include the terms in amongst the other terms of the agreement.
Online businesses should consider how they highlight any exclusions or limitations to users. For instance, the wording by the tick box of the click wrap terms could specifically refer to important exclusions and include hyperlinks to the specific clauses so that users do not have to trawl through all of the terms to find the relevant clauses.
Regularly reminding users of the terms will also increase the chances terms will bind them.
Finally, if an online business wants to impose exclusions or limits on their liability, they will need to consider whether the term meets the test of fairness and transparency required by the Consumer Rights Act. To quote the judgement, “the terms must be expressed fully and clearly and contain no hidden traps or pitfalls, especially clauses that may operate to the customer’s disadvantage”. Drafting suitable clauses is not an easy task when dealing with consumers, especially when a user is unlikely to understand the underlying technology that is used to run an online platform. Careful thought is needed to make sure terms can be understood by users.
It will be interesting to see how online businesses react. Will we see a different approach to online terms emerge? There is a delicate balance to be struck between user experience and taking steps to ensure that the terms will apply if they are challenged.
In light of the judgement, I suspect Betfred will be reviewing their terms and how key exclusions are communicated to customers to improve the chances they will be able to enforce them in the future. If you run an online business, you might want to do the same. Failing to do so may be a bet too far.