Losing out on a £1m lottery win — Court of Appeal considers incorporation of online terms and conditions

The Court of Appeal’s judgment in Parker-Grennan v. Camelot UK Lotteries Ltd provides important guidance to online traders on what steps are sufficient to validly incorporate standard terms and conditions.

Here, Richard Hough and Dana Samatar explore how one lottery player went from believing they had banked £1m to a mere £10 cash prize.

Top prize

Ms Parker-Grennan had an online National Lottery Account and Camelot was the licensed operator of the National Lottery. 

To incorporate various sets of terms and conditions (Ts and Cs) into its contracts with customers, Camelot — like many online retailers — used a ‘click-wrap’ process, which allows users to agree to be bound by specific terms by checking a box or clicking a button. Camelot’s customers could access the different sets of terms through hyperlinks and drop-down menus.  

In 2015, Ms Parker-Grennan played a new online interactive instant win game called ‘£20 Million Cash Spectacular’ (the Game). 

From the Game’s animations, it appeared that she had won the top prize of £1m. Ms Parker-Grennan took a screenshot of the page and called Camelot — only to be informed that the Game wasn’t finished until she clicked the ‘Finish’ button. 

When she subsequently clicked the ‘Finish’ button, her prize was £10. This amount was credited to her account.

Software error

It came to light that the reason why Ms Parker-Grennan saw those animations was due to a software error.

Ms Parker-Grennan brought proceedings against Camelot. She argued that she had done what it said on the page of the website that displayed the particular details of the Game — "Match any of the WINNING NUMBERS to any of YOUR NUMBERS to win PRIZE". 

If an error in the animations had unintentionally led to her winning a prize, then this was a claim that Camelot could pursue against its software suppliers. 

The High Court found in favour of Camelot. It decided that Camelot’s Ts and Cs had been incorporated into the contract, which included that the outcome of any game was pre-determined and that there might be a discrepancy between the pre-determined outcome and what appears on screen. 

Terms and conditions

Ms Parker-Grennan appealed. In relation to incorporation, the Court set out that the applicable legal test is “whether Camelot did what was reasonably sufficient to bring the various Terms and Conditions to the notice of a player of the Game. The trader is generally required to signpost "onerous or unusual" terms if he wishes to incorporate them”. 

In this case, the Court found that there was “nothing onerous or unusual” about the terms upon which Camelot was seeking to rely. 

The Court noted that traders aren’t required to do everything in their power to try and make a customer read the terms. Instead, they’re only required to take reasonable steps to bring the terms to the customer’s attention. This involves giving the customer sufficient opportunity to read the terms, which can be achieved “by providing a hyperlink to the terms or a dropdown menu which the consumer can click (or not) as they choose”. 

The Court highlighted that if the customer has to click on “so many different hyperlinks in order to find the relevant terms”, it might be that the terms can’t be considered readily accessible.

Ms Parker-Grennan also sought to argue that the Ts and Cs were unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) because they weren’t individually negotiated and so “any particular term caused ‘a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer’”. 

While the Court of Appeal ruled that the UTCCRs did apply here, it rejected Ms Parker-Grennan’s argument on the basis that the Ts and Cs “were clearly drafted and well signposted through the various hyperlinks”. 

Readily accessible

This provides useful clarification in relation to the incorporation of standard terms and conditions in online agreements.

Online traders should keep in mind that standard terms and conditions should be readily accessible to customers. Additional signposting may be required for onerous or unusual terms.  

If these requirements aren’t met, standard terms and conditions (or sections of them) may not be incorporated into contracts with customers or may be unenforceable on the basis of the UTCCRs. This can have significant implications. 

If you need assistance with drafting contracts with customers — including terms and conditions — our commercial team can assist.