Losing the lottery - effective online terms

In Parker-Grennan v Camelot UK Lotteries Ltd the claimant played an instant lottery game online. It involved matching “Your numbers” to “Winning Numbers” and when these appeared on her screen, the number 15 matched. This flashed and a green circle appeared around it, accompanied by a message saying Mrs Parker-Grennan had won £10 from her £5 stake. However, she noticed there was also a match for the number 1, which had the maximum prize of £1 million. No flashing, green circle or message appeared in relation to this.

Having taken a screenshot of the result, Mrs Parker-Grennan sought to claim the big prize, but Camelot informed her that the appearance of the match on the screen was the result of a coding error and that the prize for each ticket was pre-selected. Her ticket won £10, not £1m.

The small print

Camelot relied upon its online terms and conditions, available via hyperlinks from its site and accepted by Mrs Parker-Grennan by the usual “click-wrap” method of ticking a box, selecting those games she wished to play from a drop-down menu. When changes were made to any terms, a message appeared when she entered the site and she had to accept those changes.

Camelot relied upon various terms:
In the Game Procedure specific to the game in question, it stated “This Game is a game of chance. The outcome of a Play in the Game is pre-determined by Camelot’s Computer System at the point of purchase.”

It also explained that any win would be shown by “the two matching numbers will turn white and flash in a green circle indicating that you have won the Prize … a message will appear at the top of the Game Play Window indicating the amount You have won, if any.”

In the “Rules for Interactive Instant Win Games”, it stated that a Play would be invalid and no prize paid out if, amongst other circumstances, “The Play Number for the Play is not on Camelot’s official list of Winning Plays”.

The same rules also stated that “Camelot may declare a Play invalid (and will not be obliged to 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”.

Finally, these rules included a term that “Camelot’s decision about whether or not a Play is a Winning Play, or in relation to any other matter or dispute arising from the payment or non-payment of Prizes, will be final and binding provided that it is a reasonable decision”.

Lines of attack

Mrs Parker-Grennan argued that Camelot owed her the £1m on alternative grounds, two of which were that the terms it relied upon were not incorporated into the contract and that, if they were, they were invalid under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).

The judge gave the basic incorporation argument short shrift: the application of general contractual principles leads to the conclusion that terms are properly incorporated by the click-wrap technique. The hyperlinks and drop-down menus employed by Camelot were sufficient to incorporate these terms.

However, the terms relied upon might not have been incorporated if they were “onerous or unusual” and this occupied far more of the judge’s time. Ultimately, he was not persuaded that this was the case: “They were no more and no less than the rules for this particular game”. The judge thought it very unlikely that Mrs Parker-Grennan would have decided against playing had these terms been drawn to her attention, as they contained nothing outlandish or hugely unbalanced. The fact that the dispute resolution clause provided for Camelot to determine whether a prize had been won was not inherently objectionable, particularly because it contained an express requirement that the decision be reasonable.

The judge felt that the terms created some level of imbalance between Camelot and the consumer, but not such as to engage the provisions of the UTCCR. It was not one-sided to set out a validation process which required that Camelot should only pay out when the player’s ticket number was on its official list of Winning Plays. This ensured the integrity of the game and protected Camelot’s odds and pricing structure. The fact that Winning Plays were created randomly and unrelated to the screen animations meant that the terms created no unfairness.

Déjà vu?

If the facts of this case are sounding familiar, you may be recalling the 2021 case of Green v Betfred, our analysis of which can be found here. In that case the gambling website was not protected from the effect of a software error by its terms and conditions and was forced to pay out £1.7m to Mr Green. So, what were the key differences in the terms and how they were made clear to the customer?

Headings
Camelot’s terms and condition appeared under logical headings such as “Validation requirements” and “Limitation of liability”. Those used by Betfred at the time of the Green case contained exclusion of liability provisions that were spread across multiple clauses and not signposted for what they were.

Specific to the services used
Betfred’s terms addressed the whole range of its services and required a customer to (in the judge’s words) "click through and scroll online, searching out what appears to be relevant to him". By contrast, Camelot used one set of terms for the account relationship and then another set for each type of service it offered, such as “Interactive Instant Win Games”. While this mean there were more sets of terms in play, the judge found that it made it easier for the customer to see which terms applied to them.

Clarity
Camelot’s terms and conditions were expressed in clear English and divided into digestible sections. The drafting in the Green case was called “an egregious case of bad drafting and unfairness at all relevant stages”, containing repetitive, unnumbered, and closely-typed paragraphs.

Acceptance
There was no question that Mrs Parker-Grennan had accepted the relevant terms, due to the need to click on a box when she opened the account and tick another box for each game she wished to play. In his case, Mr Green had in fact not ticked the 'accept box' for the terms containing the key exclusion clause upon which Betfred relied, but this did not prevent him playing.

Conclusions

Camelot clearly got a lot right in the drafting of its terms and conditions: using plain English, useful signposting through meaningful headings and there being no way of circumventing the acceptance of the terms.

Where Mrs Parker-Grennan was most able to attack them was in the assertion that they created an imbalance between the parties such that they should be rendered unenforceable under the UTCCRs, or unincorporated for being unusual and onerous. This will always be a matter of fact, based upon the relationship and the nature of the contract. Here the way in which the game functioned was clearly explained and it was the graphic display rather than the game that had malfunctioned, meaning that there was no question in reality as to whether she had won.

For Camelot to retain the right to determine, on a final and binding basis, whether a customer had won was perhaps getting close to an actionable imbalance. But even with this provision, the judge found there was sufficient commercial rationale for it. The requirement of reasonableness in the exercise of that discretion also went some way to help, though it would almost certainly have been implied if not mentioned expressly.

It remains important to approach online terms and conditions with the user experience firmly in mind. Clarity and useability are key and any terms, such as exclusion clauses, which operate against the user’s interest should be clearly signposted. The Camelot case also shows that having more than one set of terms and conditions may be preferable where users are selecting particular services, rather than one combined set that may become impenetrable.