Confidential Information and Conspiracy - The Racing Partnership v Sports Information Services

Hippodrome de Deauville - Clairefontaine / Attribution

 












Court of Appeal (Lords Justices Lewison, Arnold and Phillips)  The Racing Partnership Ltd and others v Sports Information Services Ltd [2020] EWCA Civ 1300 (9 Oct 2020)

This was an appeal from Mr Justice Zacaroli's judgment in The Racing Partnership Ltd and others v Done Brothers (Cash Betting) Ltd and others [2019] EWHC 1156 (Ch), [2019] 3 WLR 779, [2019] WLR(D) 492, [2020] Ch 289. The claimants ("TRP") had sued Sports Information Services Ltd ("SIS") and others for copyright and database right infringement, breach of confidence, breach of contract and conspiracy.  Mr Justice Zacaroli dismissed all the claims against SIS except the action for breach of confidence.  SIS appealed to the Court of Appeal against the finding of breach of confidence.  TRP cross-appealed against the dismissal of its claim for conspiracy,  The appeal was heard between 7 to 9 July 2020 and judgment was handed down on 9 Oct 2020. 

The Judgment
In  The Racing Partnership Ltd and others v Sports Information Services Ltd [2020] EWCA Civ 1300 (9 Oct 2020), Lord Justice Arnold would have dismissed SIS's appeal for breach of confidence but allowed TRP's in so far as the unlawful means in the conspiracy claim consisted of breach of confidence and breach of certain terms and conditions.  Lord Justice Phillips and Lord Justice Lewison allowed SIS's appeal. Lord Justice Phillips also allowed TRP's cross-appeal though Lord Justice Lewison would not have done so.    

The Facts
TRP  supplies live betting and horseracing data collated at various racecourses pursuant to agreements with the course owners to off-course bookmakers including those who carry on business online.  In relation to 6 racecourses owned by Arena Leisure Ltd ("Arena"), TRP obtained its data pursuant to an agreement that it made with Arena on 13 May 2016 which came into force on 1 Jan 2017.  

Before that agreement came into force Arena had granted SIS a package of rights that including broadcasting and the collation and distribution of data.  That grant expired on 31 Dec 2016.  For the first couple of months after the expiry of its contract with Arena, SIS obtained "Betting Shows" (a vital piece of information collated from racecourses is a single representative price for each horse in a race, sometimes referred to as the consolidated pre-race price computed from a selection of the fixed odds being offered by a sample of on-course bookmakers) from a variety of sources including Betfair and Berdaq.  It acquired "Raceday Data" (information specific to the racecourse on the day of the race, such as the weather conditions, the state of the course (the "going"), the withdrawal or non-running of any horses, changes in jockeys, the "off" (i.e. the start time), the finish time, any steward's inquiry and the result) from the Tote.

Conspiracy Allegations
TRP alleged that SIS, Ladbrokes, Betfred and the Tote conspired to use unlawful means to injure it.  At trial, TRP had contended that, while the Tote was permitted by Arena to collect and distribute on-course data to bookmakers for pool betting purposes, it was prohibited from collecting and distributing such data for any other purpose. It complained that the Tote had acted in breach of a contract with Arena by (i) collecting and distributing data that was not required for pool betting and (ii) collecting and distributing data for fixed-odds betting that it was only permitted to collect and distribute for pool betting. TRP relied upon (a) an agreement between Arena and the Tote entered in 2013 ("the Tote Agreement") with effect from 1 January 2013, and (b) terms and conditions known as "the Arena Terms". 

Allegations of Breach of Confidence
TRP contended that the Raceday Data which SIS obtained from the Tote constituted information that was confidential to one or more of the claimants and that by obtaining such data and supplying it to Betfred and Ladbrokes SIS had acted in breach of confidence.

SIS's Grounds of Appeal
SIS appealed against the trial judge's finding that it had acted in breach of confidence on the grounds that:
  • the Raceday Data did not have "the necessary quality of confidence", but was "public property and public knowledge"; and
  • the Raceday Data were not imparted to SIS "in circumstances importing an obligation of confidence".
The words in inverted commas refer to the well-known judgment of Mr Justice Megarry in 
Coco v A.N. Clark (Engineers) Ltd [1969] RPC 41 at 47:

"First, the information itself ... must 'have the necessary quality of confidence about it'. Secondly, that information must have been communicated in circumstances importing an obligation of confidence. Thirdly, there must have been an unauthorised use of the information to the detriment of the party communicating it."

The "Necessary Quality of Confidence"
TRP had pleaded that "the Key Raceday Triggers" constituted confidential information that had been misused by SIS. The "Key Raceday Triggers" was defined as "non-runners, withdrawals, the off and the result" and "the result" and "in particular … (i) the point in time at which the race has finished, (ii) whether any issue is referred to the Stewards and (iii) the official outcome of the race taking into account any such issues". 

Mr Justice Zacaroli had found all the Raceday Data to be confidential information but Lord Justice Arnold found that the judge had no basis for reaching that finding.  The learned Lord Justice reformulated the question as to whether during the short time it was not on the public domain, " either (a) each type of information comprised in the Key Raceday Triggers constituted confidential information or (b) a compilation of such information did."(see paragraph [51] of his judgment).  SIS offered four reasons why the judge had erred in his finding plus others in oral submissions each of which was considered by Lord Justice Arnold.  He concluded at [77] "each type of information in the Key Raceday Triggers was, during the relevant time frame, confidential information. Moreover, even if there was doubt about any of the individual types, a compilation of such information was certainly confidential to Arena/TRP."

Lord Justice Lewison referred to Mr Justice Megarry's dicta in Coco:

"It seems to me that if the circumstances are such that any reasonable man standing in the shoes of the recipient of the information would realise that upon reasonable grounds the information was being given to him in confidence, then this would suffice to impose on him the equitable obligation of confidence." 

He also considered the words of Mr Justice Arnold (as he then was) in Primary Group (UK) Ltd and others v The Royal Bank of Scotland Plc and anther [2014] EWHC 1082 (Ch), [2014] RPC 26, [2014] 2 All ER (Comm) 1121 at [213]:

"The reasonable person who has notice that the information he has received or acquired is confidential is bound by an equitable obligation of confidence precisely because he has such notice. To put it another way, the yardstick for judging whether or not a document is "obviously confidential" is the reasonable person standing in the position of the recipient."

He expressed the test as follows: at [182]:

"The question, then, is not what is the correct legal analysis; but what a reasonable person would be expected to understand. Applied to the facts of this case, the question becomes: should SIS have realised that the Tote was bound by a confidence obligation even though, as Arnold LJ has said at [26] and [42], there was no contractual restriction on its ability to disseminate information that it had collected and compiled itself?"

Lord Justice Lewison noted that the races were televised with the result that anyone with television could have seen for themselves the "off" and both the finish and the winner in real-time. He concluded at [189]: "I do not consider that it can credibly be said that information which anyone with the means employed to effect it were unlawful, and if there were a combination either to effect the unlawful object or to use the unlawful means, then the combination was unlawful, then those who formed it were misdemeanants and a person injured by their misdemeanour has an action in respect of his injury."

He noted Lord Watson's dicta when the case reached the House of Lords:

"As the law is now settled, I apprehend that in order to substantiate their claim, the appellants must shew, either that the object of the agreement was unlawful, or that illegal methods were resorted to in its prosecution."

He also reviewed  Lonrho plc v Fayed [1992] 1 AC 448, Kuwait Oil Tanker Co SAK v Al Bader [2000] All ER 271, Total Network SL v Revenue and Customs [2008] AC 1174, [2008] BVC 340, [2008] BTC 5216, [2008] UKHL 19, [2008] 2 All ER 413, [2008] 2 WLR 711, [2008] 1 AC 1174, [2008] STI 938, [2008] and JSC BTA Bank v Khrapunov  [2018] 2 WLR 1125, [2018] 3 All ER 293, [2018] UKSC 19, [2018] ILPr 26, [2020] AC 727, [2018] 2 All ER (Comm) 479, [2018] WLR(D) 184.  TRP had pointed out none of those cases suggested that knowledge of the unlawfulness of the means used was a necessary ingredient of the tort.  SIS replied that the question of knowledge had not been addressed in any of those cases.

Lord Justice Arnold then considered three cases in which knowledge of unlawfulness had been an issue, namely British Industrial Plastics Ltd v Ferguson [1938] 4 All ER 504.  Churchill v Walton [1967] 2 AC 224. and Belmont Finance Corp v Williams Furniture Ltd (No 2) [1980] 1 All ER 393,  In British Industrial Plastics Ltd. Lord Justice Finlay had said:

"The essence of conspiracy is the co-operation of the minds of the conspirators in pursuance of the unlawful design. A person could never be liable for conspiracy, either in a civil or in a criminal court, if he had no knowledge that the design was unlawful, and the essence of the action for inducing a breach of contract is knowledge on the part of the defendant. There never could be liable for that tort unless it was shown that the defendant knew that there was a contract, and, having that knowledge, induced its breach."

Lord Justice Arnold regarded his dicta as 

"persuasive authority that knowledge of the unlawfulness is required for unlawful means conspiracy; but the case is not binding authority for that proposition because the point was not in issue and all the judgments treated the claim for unlawful means conspiracy as standing or falling with the claim for inducing breach of contract."

In Churchill, Lord Dilhorne had said that, in order to establish a criminal conspiracy to do an unlawful act, it is necessary to show that the accused had knowledge of the facts which made the act unlawful; but knowledge of the law on the part of the accused is not required.  In Lord Justice Arnold's view, Churchill contradicted Lord Justice Finlay's statement of the law quoted above at least so far as criminal conspiracy is concerned.

After considering the authorities, Lord Justice Arnold concluded at [139] of his judgment that knowledge of the unlawfulness of the means employed is not required for unlawful means conspiracy.   It followed that the trial judge had been wrong to hold that knowledge that the means is unlawful is required in order for the tort of conspiring to injure by unlawful means to be established where the means is an infringement of a private right.

Lord Justice Phillips agreed with Lord Justice Arnold that knowledge of the unlawfulness of the means employed is not required for unlawful means conspiracy.   Notwithstanding a similarly comprehensive review of the authorities, Lord Justice Lewison came to a contrary view.

Comment
Although this case is not easy to follow because of the conflation of the issues in the two appeals in Lord Justice Arnold's judgment and its sheer length and complexity, it is important because it resolves difficult issues (albeit by a majority decision in  both instances) in the law of confidence and conspiracy.  As Lord Justice Arnold observed at [106] the question of whether knowledge was an essential requirement of the tort of conspiracy had been a thorny issue with which a number of first instance judges have had to grapple in recent years, reaching divergent conclusions.  However, a two to one majority decision is unlikely to be the last word when there was a strong dissenting judgment by a judge of the eminence of Lord Justice Lewison.

Anyone wishing to discuss this case or the issues in it is welcome to call me on +44 (0)20 7404 5252 during office hours or to send me a message through my contact form.

Comments

Alistair Kelman said…
It was a pity that the Court of Appeal did not consider the facts of:

https://www.bankofengland.co.uk/report/2020/report-on-the-misuse-of-the-boes-press-conferences-audio-feed

which might have led them towards a decision which was easier to use as a precedent in other situations.
The original incident was written up in the Guardian
https://www.theguardian.com/business/2019/dec/19/hedge-funds-hacked-into-bank-of-england-briefings
and in the FT (behind its firewall) https://www.ft.com/content/0c2718d4-d69d-480a-a03f-aae668e44a62


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