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David Ashforth Comment - re Palpable Error wording issue - Racing Post - Thursday 27th November 2008

Under the 2005 Gambling Act, fully operational since last September, bets are now legally enforceable contracts. When punters or bookmakers believe that a contract has not been honoured, and a gambling debt remains outstanding, they can apply to a court to enforce the contract.

Steve Baker’s threat to do so was sufficient to persuade Totesport to pay up but, until a body of case law has been established covering a range of different circumstances, the problems that arise when payment is refused on the ground that the price laid was a ‘palpable error’ will persist.

It could be a long time before a body of case law exists. During the first year of the act’s operation, no cases appear to have been ruled upon in court.

In its 2007 report, Ibas noted that, for both football and horseracing, “disputes over prices laid in error were again the most significant category”. It has long been so.

Ibas called, as its chief executive Chris O’Keeffe has done again, for bookmakers to remove the ‘palpable error’ provision from their rules, on the grounds that its definition is subjective and can be used to protect bookmakers, inappropriately, from misjudgements when setting prices.

A clearer definition of ‘error’, supported by examples, would be helpful, but there is no easy answer to the problem.

If there was, in today’s more customer service-oriented environment, the answer would have been acted upon.

Bookmakers cannot expect to escape responsibility for the actions of their staff, even when staff have failed to follow company procedures.

Any error in laying a price raises the question of the adequacy of recruitment, staffing levels and staff training, for which customers should not be penalised.

On the other hand, bookmakers need protection from collusion between a customer and member of staff, and it is unreasonable to expect to be paid out at 100-1, odds written in genuine error by a cashier, when the price on display was 10-1.

The solution, an imperfect one, is for Ibas and the betting industry, in conjunction with the Gambling Commission, to continue to work to improve the clarity and fairness of bookmakers’ rules, and standards of customer care when handling disputes about prices laid in error. Each case still has to be dealt with on its merits; Ibas still has a valuable role to play in adjudicating such disputes; and deciding on court action will continue to be a last resort.

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