May 5, 2023
Even though County Court judgments don’t set any precedent, it’s hard to ignore the recent decision in O’Brien v Star Sports (On Course) Ltd in the Central London County Court.
At first glance, apart from some slightly unusual facts and questionable witness testimony, the case wasn’t particularly remarkable: a customer claimed to be a problem gambler and that, by permitting him to continue to place bets, the defendant betting shop was liable for his losses. Similar cases have come before courts in the past and, while the facts will differ, they are largely disposed of on the basis that it has long been held as a matter of law that gambling operators do not owe a duty of care to problem gamblers.
What was different in Mr O’Brien’s case was that he sought to rely on the effect of section 49(1) of the Consumer Rights Act 2015, which provides that a contract for services includes an implied term that the trader will perform the service with reasonable skill and care. Mr Brien’s argument, and a novel question for the court, was whether the requirement to perform the service with reasonable skill and care extended to a requirement to comply with the provisions of the Social Responsibility Code issued by the Gambling Commission (the Code). Simply put, if an operator does not comply with the terms of Code, is it in turn not acting with sufficient reasonable care and skill for the purposes of the Consumer Rights Act 2015 and therefore in breach of contract?
The judge was unpersuaded. She referred to s.24(8) of the Gambling Act 2005 which expressly provides that a “failure to comply with a provision of a code shall not of itself make a person liable to criminal or civil proceedings”. If Mr O’Brien was right, it would be a significant departure from this clear statutory language and provide an alternative, workaround route for customers to seek to recover losses for alleged breaches of the Code.
The judge held that no such alternative route existed: that was the clear effect of s.24(8) which expressly excluded a civil cause of action, and nothing in the legislation or the debates that accompanied it suggested that Parliament intended otherwise. Equally, when the Consumer Rights Act was introduced in 2015, there was no express amendment to the Gambling Act 2005 (which the judge would otherwise have expected) to make it clear that the new legislation would apply in the way that O’Brien argued.
The judge was quick to point out that her judgment didn’t absolve operators of their obligation to perform the contract with reasonable care and skill, but that “it was a duty to exercise reasonable care in the context of the contract [she gave the example of accurately displaying odds etc], not the licensing provisions under the GA the latter being the responsibility of the Gambling Commission.”
Failed at the first hurdle
Mr Brien’s case had failed before the judge even turned to this important and novel point of law. Critically, she found that Mr O’Brien was at some point using funds to gamble to which he was not entitled and had no right to use and, as such, “the illegality taints the whole claim, and the Claimant is not entitled to recover any sum”
The judge further rejected arguments that the defendant knew or ought to have known that Mr O’Brien was a problem gambler because on the scant evidence before her (Mr O’Brien refused to submit relevant financial or medical records in support of his arguments) she held that he was not a problem gambler anyway. Equally, save at the very end of his final gambling session, his activity raised no internal triggers (and after the trigger was raised Mr O’Brien left and the defendant’s evidence was that it would have intervened if he had returned). The defendant was also able to demonstrate that Mr O’Brien’s gambling activity was largely in line with that of other customers.
Further still, the judge found that, even if the court were to have upheld Mr O’Brien’s claim in negligence or contract, his case on causation was “unsustainable”: not only was his betting “probably at a substantial level” at other establishments during the relevant period, but he continued to do so despite these proceedings. In these circumstances, and despite being invited to disregard it on the basis that it pre-dated the Gambling Act 2005, the judge accepted that the judgment of the Court of Appeal in Calvert was unavoidable and had direct application. As the court put it then: “the quantification of his loss cannot ignore other gambling losses which [a customer] would probably have sustained but for their breach of duty”.
The judgment, though not binding on other courts, is noteworthy as being a careful, thoughtful and considered written judgment following full argument by counsel for both parties at trial. It is the latest in a long line of cases from Calvert to Ehrentreu (which the judge also cited with approval) upholding the orthodox position that, whether in contract or tort, it would be “truly exceptional” for a court to impose a duty on a gambling operator to protect a customer from inflicting economic harm on themselves. Any suggestion that this position is modified or tempered by the Consumer Rights Act 2015 was comprehensively dismissed.