HomeInsightsCourt of Appeal puts the reins on TRP v SIS High Court finding

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In a recent ruling[1] concerning use of horseracing data, where the judges were at odds with each other, the Court of Appeal overturned the High Court’s decision and held that Sports Information Services (SIS) had not misused confidential information belonging to The Racing Partnership (TRP) and Arena Racing Corporation (Arena), but that SIS had conspired to injure them by unlawful means.

The majority of the Court held that there was no misuse of confidential information because it was reasonable for SIS to rely on assurances and a warranty it had received from the Tote that SIS was free to use the information that the Tote had supplied. The Tote was an apparently respectable counterparty and commercial life would be made much more difficult if a counterparty had to second guess the truth of such a warranty.

However, SIS admitted that for two months it had knowingly breached its contracts with the Betfair and Betdaq betting exchange websites, by taking and using pricing information on those exchanges to create and supply its own Betting Shows.  In that respect the Court of Appeal held that SIS was liable for conspiracy to injure TRP and Arena by unlawful means.

All bets are off as to the conclusion that will be reached by the Supreme Court if SIS seeks and is granted leave to appeal.

Background

Since 1 January 2017, TRP has had the exclusive right to collect and distribute live betting and horseracing data from Arena racecourses to off-course (including online) bookmakers and betting operators pursuant to an agreement with Arena.  Prior to this, SIS had a similar agreement with Arena, which gave it the right to collect and distribute this data to off-course bookmakers.

A number of betting operators contracted directly with TRP to receive a rights package including this data.  However, it transpired that other operators, including Ladbrokes, Coral and Betfred, instead received data from SIS, who in turn obtained the data from the Tote, which had a presence on-course at Arena racecourses.

SIS also used the information it obtained via its breaches of the Betfred and Betdaq contracts to create and provide its own betting prices (Betting Shows) to Ladbrokes and the others.

TRP and Arena launched High Court proceedings against a number of parties, including Ladbrokes and the Tote, although SIS was the sole remaining defendant by the time of the trial.  TRP successfully argued at first instance that SIS’s use, between January and July 2017, of factual information relating to the course and the relevant races (Race Day Data), constituted misuse of confidential information.

TRP and Arena failed on a number of other grounds, including conspiracy to injure by unlawful means. The alleged unlawful means at first instance were both the misuse of the confidential information, and SIS’s knowing breaches of the contracts it had with Betfair and Betdaq.

SIS appealed against the judge’s finding that it was liable for misuse of confidential information; TRP cross-appealed against the judge’s dismissal of the claim for unlawful means conspiracy.

Court of Appeal decision

Whilst the overall outcome of the judgment was that SIS’s appeal on misuse of confidential information and TRP’s cross-appeal on conspiracy both succeeded, the appeal judges were not unanimous on either issue.

Misuse of confidential information

Arnold LJ gave the leading judgment in which agreed with the judge’s decision that SIS was liable for misuse of the pleaded confidential information (Key Raceday Triggers), on the basis that the Key Raceday Triggers had the necessary ‘quality of confidence’ and were imparted in circumstances importing an obligation of confidence.

Lewison LJ reached the opposite conclusion, finding that the judge had asked the wrong question. The right starting point was freedom of speech.  Unless a person is subject to a contrary obligation, he is free to communicate what he sees or hears.

SIS itself was not contractually bound to either Arena or TRP not to disclose information.  So any obligation it had not to disclose must have arisen in equity. Under long-standing case law, such an obligation would only arise if any reasonable person standing in SIS’s shoes would have realised on reasonable grounds that it was being given the information in confidence.

Here, the Tote had supplied the information to SIS and had given it a warranty and assurances that it could use it and that such use would not breach any third party rights.  The question was whether SIS should have second guessed those assurances and made additional or different enquiries than it had in fact made.  The Tote was an apparently respectable counterparty; and commercial life would be made much more difficult if a counterparty had to second guess the truth of such a warranty. The only answer was “no”.

Phillips LJ had the deciding ‘vote’ in which he agreed with Lewison LJ that SIS’s appeal should be allowed i.e., that SIS was not liable for misuse of confidential information.

Unlawful means conspiracy

TRP and Arena based their claim for this on two types of unlawful means: the misuse of confidential information, and SIS’s admitted breaches of its contracts with Betfair and Betdaq.  Although not clearly stated in the judgments, the majority decision of the Court of Appeal that SIS had not misused confidential information meant that the only remaining alleged unlawful means on the appeal were the admittedly knowing contract breaches.

Conspiracy to injure by unlawful means is a difficult tort on which there have been previous conflicting decisions by the Court of Appeal, and Arnold LJ recognised that the tort needed to be kept within bounds.  The key areas of judicial conflict are (1) whether the conspiracy only subsists if at least two of the co-conspirators know that something unlawful is being done and (2) in what circumstances an unlawful act should be held to have led to or caused the damage in question.

Both Arnold LJ and Lewison LJ gave long and careful judgments on the issues, but again came to different conclusions.  This time the casting vote by Phillips LJ went in favour of Arnold LJ, but the judgments make it clear that the difficulties with the tort remain.

On the facts, the majority agreed that SIS was liable for the conspiracy.

Commentary

Misuse of confidential information

It is notable that the Court of Appeal was unanimously of the view that a compilation of racing data could constitute confidential information, even if the data arises/is generated in the public arena and even if there is only a short window in which it retains commercial value.  Arnold LJ, in the minority, was of the view that the true criterion for confidentiality is not secrecy, but inaccessibility.  If the information could be, and was indeed, controlled then the information was inaccessible from any public domain source during the relevant time frame and hence had commercial value.

Generally speaking, the easiest case to bring in a case of this sort would be breach of contract.  However, TRP and Arena had to rely on a claim for misuse of confidential information because the Tote was not contractually bound by Arena’s terms and conditions of entry to its racecourses[2].

The judgment serves as a further useful reminder to ensure that terms and conditions of entry to private places such as racecourses are drawn to the attention of visitors, whether they are there in their private or commercial capacities.

Unlawful means conspiracy

The issues addressed in the judgment in relation to the tort of conspiracy to injure by unlawful means raise interesting points of legal principle and are likely to be the subject of any further appeal.

It was common ground that the tort required at least the following: (i) a combination between two or more people; (ii) concerted action pursuant to that combination which is unlawful; (iii) an intention to injure the claimant (it being sufficient that the conspirators seek a benefit at the claimant’s expense); and (iv) damage to the claimant.  However, it fell to the appeal judges to decide whether knowledge of the unlawfulness of the means employed (and if so, whose knowledge) is also a requirement of the tort of conspiracy, and here they could not agree.

The issue of what exactly is required to establish ‘causality’ or ‘instrumentality’ between the unlawful means and the injury to the claimant also divided the Court of Appeal judges and is ripe for further appeal.  Arnold LJ expressly reached his conclusion with “some hesitation” and in the face of seemingly contradictory case law.  This is a difficult tort, and the law has some way to go before it is clear.

 [1] The Racing Partnership Ltd (TRP), Arena Racing Corporation Ltd (Arena) & anor v Sports Information Services Ltd (SIS) [2020] EWCA Civ 1300

[2] Historically, the Tote had a statutory right to enter the Arena racecourses, and from January 2013 it had implied permission, under an agreement between the Tote and Arena, to enter the Arena racecourses for the purpose of collecting and distributing Race Day Data for its pool betting service but not for any other purpose.