The High Court’s decision to dismiss an application for summary judgment in Parker-Grennan v Camelot UK Lotteries Ltd [2023] EWHC 800 (KB) is welcome news for B2C gambling operators.

Background

Ms Joan Parker-Grennan (“JPG”) first opened an online National Lottery account on 27 February 2009 and, in doing so, she ticked a box to confirm that she had read and agreed to be bound by Camelot UK Lotteries Ltd’s (“Camelot”) terms and conditions, as well as the rules for Instant Win Games (“IWGs”) and Game Procedures for specific games.

On 25 August 2015, JPG bought a £5 ticket to play the IWG, £20 Million Cash Spectacular, on Camelot’s website, with prizes ranging from £5 to £1 million. In accordance with the game rules, in order to win a prize one of JPG’s numbers in the “YOUR NUMBERS” section had to match another number in the “WINNING NUMBERS” section of the screen.

These are the screenshots used in the judgment to illustrate the game format and rules:

During the IWG, an interim (and optional) animated display appeared showing that JPG had matched two numbers:

a) one of the matches (15) would have resulted in JPG winning a prize of £10 and was flashing with a corresponding message to confirm the win;

b) the second match (1) would have resulted in JPG winning £1 million, but there were no flashing lights or message to reflect this.

This is the screenshot of the interim screen seen by JPG, that was presented as evidence in the High Court:

The final game outcome screen (which was not provided in the High Court’s judgment) showed that JPG had won £10 only.
Camelot refused to pay out the £1 million prize, arguing that the result of the game was predetermined as £10 and the second match on the interim screen was a coding-related error in the optional animated display.

JPG’s claim and Camelot’s defence

JPG applied for summary judgment on the basis that it was clear that she was entitled to £1 million in addition to the £10 prize.
In their defence, Camelot argued that JPG was entitled to the £10 prize only. As previously conveyed to JPG, Camelot reiterated that a coding issue had generated an error in the software responsible for the optional animations for the IWG and that the £10 prize had been “predetermined” by a computer as the prize that would be won in conjunction with JPG’s ticket.

In support of their defence, Camelot referred to the relevant Game Procedures, IWG rules and account terms, stating that these made it clear that the interim animated display was irrelevant to the question of whether a player had won a prize, which was predetermined by Camelot’s computer system as outlined in clause 3 of the IWG rules.

Clause 6 of the IWG rules went on to provide:

“Validation Requirements

6.1 Before a Prize can be paid on a Play, it must be successfully validated in line with Camelot’s reasonable validation procedures adopted from time to time. Camelot’s decision about whether the Play is valid will be final and binding.

6.2 Without limiting the effect of Rule 6.1, Camelot will declare a Play invalid (and will not, therefore, pay any Prize) if:

…(e) the outcome of a Play as displayed on the Game Play Window is inconsistent with the result of that Play as predetermined by Camelot’s Computer System;”

The Game Procures also provided that:

…”If You match a number from the WINNING NUMBERS Section to a number in the YOUR NUMBERS Section, the two matching numbers will turn white and flash in a green circle indicating that you have won the Prize for the matched YOUR NUMBERS.

When You have revealed all numbers and Prizes a message will appear at the top of the Game Play Window indicating the amount You have won, if any. The word ‘FINISH’ will appear underneath the message. You must select FINISH to complete the Game.”

Mr Justice Jay’s judgment

The High Court judge, Mr Justice Jay, dismissed JPG’s application for summary judgment on the following three grounds:

1. Incorporation

The relevant terms were properly incorporated into Camelot’s contract with JPG via accessible hyperlinks and drop-down menus. The terms on which Camelot relied to defeat JPG’s application for summary judgment were not “onerous or unusual”, and were “clearly drafted”, so did not require special treatment to draw them to JPG’s attention.

2.Fairness

None of the terms on which Camelot relied to avoid liability were unfair, as per the Unfair Terms in Consumer Contracts Regulations 1999 (“UTCCRs”), which were the applicable consumer protection laws when JPG played the IWG.

Mr Justice Jay drew a contrast to the case of Green v Petfre (Gibraltar) Ltd (t/a Betfred) (the “Green Case”), in which Mrs Justice Foster DBE found for Mr Andrew Green (Betfred’s customer) on every point, holding that in the Green Case, Betfred’s applicable terms were too onerous to be incorporated into a contract with a consumer.

3.Interpretation

It was only the amount shown on the final game outcome screen and Camelot’s official list of winning numbers that was conclusive as to the amount won. Mr Justice Jay provided the following explanation:

“[JPG’s counsel’s] submission that the Defendant may have intended an outcome of £10 but the actual outcome was £1,000,010 cannot be accepted. It entirely ignores: (a) what the Claimant saw after she pressed the finish button, (b) the Game Procedures, (c) the relevant parts of clause 6, and (d) the Defendant’s evidence about how its computer system worked. The outcome of £10 was both the intended and the actual result.”

Although JPG’s application for summary judgment was dismissed, this did not preclude JPG from continuing to trial. However, Mr Justice Jay’s concluding remarks strongly suggested that without further expert evidence, the High Court would be minded to dismiss her claim. It is now apparent that JPG has decided against pursuing to trial, ostensibly due to a lack of further evidence.

Conclusion

Although this case involved an interpretation of the UTCCRs, which have now been superseded by the Consumer Rights Act 2015 in the United Kingdom, the High Court’s finding in favour of Camelot in this case is great news for gambling operators. This is because (as many readers will know), the Green Case, which involved the application of the same principles in a different context, cast doubt over gambling operators’ ability to limit liability for software errors in a consumer context. However, in his judgment Mr Justice Jay clearly distinguished the present case with Betfred, noting that:

“In the Green case, Foster J found for [Mr Green] on every point: the [applicable] term was poorly drafted and did not provide the exclusion from liability which the Defendant sought, the [applicable] term was too onerous to be incorporated; the [applicable] term was unfair… …To my mind, Green is an example of an egregious case of bad drafting and unfairness at all relevant stages. In addition, Green was a strong case on the facts: there could be no dispute that [Mr Green] had won; the issue was whether [Betfred] could avoid having to pay.”

In our view, the opposite outcomes for Betfred and Camelot, albeit with slightly different facts, provide much needed clarity in this area and pave the wave for future success by B2C gambling operators in defending consumer claims in relation to software errors and malfunctions. They also underscore the importance of taking proper legal advice on customer terms and conditions and game / betting rules. Ensuring that these documents are clearly drafted, properly incorporated and fair, could make all the difference in the event of a consumer claim.

Next steps

We have a strong and experienced commercial practice at Harris Hagan. Please get in touch with us if you require any assistance reviewing and/or drafting website terms and conditions, rules of play or other commercial gambling contracts.

With credit and sincere thanks to EGR Global for publishing a version of this article in the EGR Global magazine (www.egr.global) and to Adam Russell for his invaluable research and co-authorship.