Exclusion clauses: don’t take a gamble

The recent case of Green v Betfred is a stark reminder to businesses that, in order to be effective, exclusion clauses in consumer contracts must be clear, well sign-posted and easily accessible. This case is particularly relevant to online businesses relying on "click-wrap" mechanisms to bind consumers to terms (ie those that require customer to check the 'accept box' to continue). Exclusion clauses that consumers can only find after "trawling" through lengthy and convoluted documentation are unlikely to be upheld.

In 2018, Andrew Green played a game of Blackjack newly introduced on Betfred's website. After 5½ hours of consecutive play, an undetectable 'glitch' in the game's software led to Mr Green being dealt almost exclusively winning cards. Mr Green won over £1.7m in chips, but Betfred refused to let him cash out, relying on several exclusion clauses, including one that said "a malfunction voids all pays and plays". On a summary judgment, Betfred's terms were held to be ineffective in excluding its liability to Mr Green for "an undetected and undetectable" defect.

The scope of the exclusion clauses

Key to the judge's decision was the poor drafting and presentation of Betfred's terms and conditions. The judge considered that Betfred's exclusion clauses were:

• made up of component terms that were undefined and spread across several documents;
• unclear and their intended effect obscure; in particular,
• the word "malfunction" was used in other contexts of the terms to suggest a hardware or  telecommunications breakdown as opposed to the undetectable glitch that arose in Mr Green's case.

The judge noted that other clauses of Betfred's terms demonstrated that it was capable of  drafting clearly. If Betfred had intended the exclusion clauses to exempt it from paying out ostensibly winning bets, Betfred would (and should) have drafted them to say so clearly. As such, the judge found that Betfred could not avoid paying Mr Green the £1.7m as a matter of the exclusion clauses' language. 

Incorporation into the contract

The judge also found that the exclusion clauses were not in any event incorporated into Betfred's contract with Mr Green, as they were buried in documentation that:

• was inadequately signposted and contained repetitive, unnumbered, and closely-typed paragraphs;
• may have caused confusion by "liberally employing" capitalisation in certain, but not all, important sections;
• addressed the whole range of Betfred's services and required a customer to "click through and scroll online, searching out what appears to be relevant to him"; and
• Mr Green first 'accepted' when he opened his account several years earlier, and of which he was not reminded before playing the new game.

Further and crucially, Mr Green's failure to check the 'accept box' of the terms containing the key exclusion clause upon which Betfred relied (the "malfunction" clause above), did not prevent his entry into the new game.

The Consumer Rights Act 2015

Finally, the judge held that, even if the exclusion clauses had been incorporated into Mr Green's contract, they would have been ineffective under the Consumer Rights Act 2015. That Act requires the terms traders offer consumers to be fair: they must be transparent, prominent and their meaning clear to an average and informed consumer (sections 64(3)-(5)). For all the reasons set out above, these exclusion clauses were unfair.

Conclusion: use technology to your advantage

The Betfred case indicates that the Court is unlikely to consider the now commonplace 'scroll through' or 'accept box' functions sufficient to bring exclusion clauses to consumers' attention. Businesses, particularly those trading on online platforms and apps, should therefore take note.

We suggest approaching terms and conditions the same way you would approach other aspects of your websites and apps:  

• Consider the user experience - design the interface of terms and conditions to optimise clarity and usability;
• Signpost exclusion clauses - technology allows for such signposting to be done in more creative and clear ways than traditional, paper-based approaches - use this to your advantage;
• Multiple services/platform - design terms and conditions so that consumers can seamlessly find all terms applicable to their specific uses; and
• Access rights - build systems that prevent consumers from accessing products unless they have expressly accepted the exclusion clauses upon which your business seeks to rely.

The technology expertise that many companies already possess provides precisely the sort of tools to maximise the chances of exclusion clauses being upheld. Companies should therefore see this as an opportunity to innovate their way out of a known problem.