In an age when all it takes to accept a website's terms and conditions is a simple click, the judgment in Parker-Grennan v Camelot UK Lotteries Ltd serves as a timely reminder of what can be at stake when the website does not function as it should. It also reveals how the ways in which terms and conditions are drafted can either protect businesses from liability, or open them up to challenges on the basis of incorporation, enforceability and fairness.
Background
Mrs Parker-Grennan played an Instant Win Game on the National Lottery website, which gave players a chance to win a prize ranging from £5 to £1 million after purchasing a £5 ticket. In order to win, the player needed to match one of the numbers generated as "their numbers" to "winning" numbers. When Mrs Parker-Grennan played, the game's animation showed she matched the number "15", which started to flash and she was informed that she had won £10. However, Mrs Parker-Grennan also saw that she had matched a second number, which carried a prize of £1 million. The second number did not flash and no notification popped up saying that she had won £1 million.
Upon attempting to claim her prize money, Camelot refused to pay out more than the £10 prize Mrs Parker-Grennan had won, stating that she had not won £1 million because the second matching number was the result of a coding error in the software responsible for the (optional) animations. In fact, at the point of purchasing the game, a random "play number" was generated which determined the prize that Mrs Parker-Grennan would win, rather than the animation. Camelot argued that on a proper interpretation of the terms stated on its website, the animated display had no bearing on her winnings.
Mrs Parker-Grennan argued that she had done precisely what the wording on the Game Details screen had told her to do – "Match any of the WINNING NUMBERS to any of YOUR NUMBERS TO WIN PRIZE" – and sought summary judgment.
The High Court decision
Incorporation
One of the key elements of a contract is certainty of terms. While one party's standard terms and conditions can be incorporated into a contract, even if they are not read by the other party, reasonable steps must be taken to bring the existence of those terms and conditions to the notice of the other party. This is especially the case for any onerous or unusual clauses, which require specific signposting to be brought to the attention of the other party. The first question before the judge was therefore whether the terms and conditions on which Camelot relied had been incorporated into its contract with Mrs Parker-Grennan.
The users of Camelot's website had to accept the website's terms and conditions (comprising Camelot's account terms, rules for instant win games, and relevant game procedures) prior to playing any of its games. Additionally, any updates of significance to those terms required acceptance by players each time. These were all available via drop-down menus and hyperlinks. The judge considered that in this case, this was, in principle, sufficient to incorporate the terms.
Further, in the judge's view there was nothing onerous or unusual about the various terms Camelot sought to rely upon. The Instant Win Game rules were clearly drafted and set out logically, with reasonably prominent headings. While they stated that Camelot could decide, on a final and binding basis, whether a player had won a game, any such decision had to be reasonable. The judge concluded there was nothing unusual about such a clause, which is well-established for all sorts of games and prizes available online and elsewhere, and given the reasonableness proviso, it was also not onerous.
The judge added that, while the wording on the Games Details screen ("match any of the WINNING NUMBERS") did indeed have contractual effect, no reasonable consumer could believe that it was the sole defining factor in the relationship between the parties. Its contractual status therefore meant very little.
Unfair contract terms
The judge went on to hold that none of the terms on which Camelot relied were unfair under the Unfair Terms in Consumer Contracts Regulations 1999 (the "UTCCR"), which applied as the circumstances of the case arose before the coming into effect of the Consumer Rights Act 2015 on 1 October 2015. Prior to that date, the UTCCR provided that terms which had not been individually negotiated, and caused a significant imbalance between the parties to the detriment of the consumer, contrary to the requirement of good faith, would be unfair and unenforceable. The judge commented that the correct approach when applying the UTCCR was not to examine the entire contractual package, but rather to determine whether each individual clause was unfair.
The judge noted that in this case, the network of contractual provisions on which Camelot relied were clearly drafted and well signposted. While he was prepared to accept that some of the clauses created an imbalance, he did not think it was significant. For example, the judge found that terms giving Camelot the right to validate prizes were necessary to ensure the integrity of the National Lottery and protect Camelot's pricing structure and odds. In addition, while the term regarding Camelot's decision being final and binding (subject to reasonableness) did create a significant imbalance between the parties, the provision was not incorporated or applied in a manner that was contrary to the requirement of good faith and therefore did not meet the unfairness test. Camelot was entitled to have control over its validation process and to accord itself considerable leeway in doing so.
Construction
Finally, the judge ruled that on the proper interpretation of the contract between Camelot and Mrs Parker-Grennan, and on the basis of Camelot's evidence as to the operation of the website, Mrs Parker-Grennan had won £10 rather than £1 million. Her application for summary judgment was dismissed and the judge advised that unless she decided to obtain her own expert evidence addressing Camelot's evidence, her claim would follow suit.
Concluding remarks
Standard terms and conditions provide substantial benefits to businesses operating both on and offline, enabling the business to determine the parameters of its contractual relationships consistently, and introduce valuable protections such as liability limitations. In modern times, such standard terms are frequently found on websites and, as this case demonstrates, in order to be effective it is important that website owners ensure that they are clearly signposted, drafted in an accessible and clear manner, and that the fairness of each term is carefully considered (for example, by including a reasonableness requirement for terms that may otherwise create a significant imbalance between the parties).
In the betting and gaming space, it is also important to ensure that players have accepted such terms and conditions prior to being able to play online games, for example by obliging players to actively click or tick a box.
On the other hand, website users should be aware that there may be different sets of rules that apply to their usage of a website. They should not assume that one set of procedures, or the wording on one page, will define the entirety of their relationship with the website owner. The crucial parts are often all in the "small print".