Mulvaney & Martin v Sporting Exchange Ltd (t/a Betfair)

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 18 March 2009
• Neutral Citation: [2009] IEHC 133
• Date: 18 March 2009
• Court: High Court
• Docket Number: [2004 Nos. 19924 and 19925 P]

[2009] IEHC 133

THE HIGH COURT

[No. 19924 P./2004]

[No. 199254 P./2004]

Mulvaney & Martin v Sporting Exchange Ltd (t/a Betfair)

BETWEEN

SEAMUS MULVANEY

PLAINTIFF

AND

THE SPORTING EXCHANGE LIMITED TRADING AS BETFAIR

DEFENDANTS

AND BY ORDER

ALAN CONNOLLY, PAULA CAREY, MARK McELROY, TONY KAVANAGH, PAT KEELEY AND JASON KELLY

THIRD PARTIES

AND

ELLEN MARTIN

PLAINTIFF

AND

THE SPORTING EXCHANGE LIMITED TRADING AS BETFAIR

DEFENDANTS

AND BY ORDER

HUGH HYNES

THIRD PARTY

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 18

EEC DIR 2000/31/EC ART 14

EEC DIR 2000/31/EC ART 13

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 15

EEC DIR 2000/31/EC ART 1(5)(D)

GAMING & LOTTERIES ACT 1956 S2

NATIONAL LOTTERY ACT 1986 S1

CRIMINAL PROCEEDINGS AGAINST GAMBELLI 2006 1 CMLR 35 2003 ECR I-13031

LIGA PORTUGUESA DE FUTEBOL PROFISSIONAL (CA/LPFP) BAW INTERNATIONAL LTD v DEPARTAMENTO DE JOGOS DE SANTA CASA DA MISERICORDIA DE LISBOA (CASE C-42/07 OPINION OF ADVOCATE-GENERAL BOT)

EEC DIR 2000/31/EC RECITAL 16

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 2(F)

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 16

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 17

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 12

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 13

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 14

EUROPEAN COMMUNITIES (DIRECTIVE 2000/31/EC) REGS 2003 SI 68/2003 REG 3

EEC DIR 98/34/EC ART 1(2)

COLLINS THE LAW OF DEFAMATION & THE INTERNET 2ED 2005 PARA 17.03

BUNT v TILLEY 2007 1 WLR 1243

EEC DIR 2000/31/EC RECITAL 20

EEC DIR 2000/31/EC RECITAL 18

EEC DIR 2000/31/EC ART 14(1)(A)

EEC DIR 2000/31/EC ART 14(1)(B)

COMMERCIAL LAW

E-Commerce

Internet - Website - Liability - Liability for material hosted on website - Chat room - Intermediary service provider - Relevant service provider - Information society service - Gambling exemption - Whether internet chat room covered by E-Commerce Directive - Whether host of chat room intermediary service provider - Whether provision of chat room constitutes relevant service consisting of storage of information provided by recipient of service - Bunt v Tilley [2006] EWHC 407, [2007] 1 WLR 1243 followed - European Communities (Directive 2000/31/EC) Regulations 2003 (SI 68/2003) - Directive 2000/31/EC - Preliminary issues answered in favour of the defendants (2004/19924P & 19925P - Clarke J - 18/3/2009) [2009] IEHC 133

Mulvaney v Sporting Exchange Ltd t/a Betfair

1. Introduction

2 2 1.1 These linked cases arise out of separate proceedings in which the plaintiffs, who are both bookmakers, claim damages for libel. The defendants ("Betfair") carry on business as a provider of a betting exchange, mainly through a website, Betfair.com. The website contains a chatroom, known on the site as the Betfair forum (the "Chatroom") in which registered customers of Betfair may make comments concerning sports, betting or other issues.

3 3 1.2 The libel proceedings concern comments posted on the Chatroom by registered clients of Betfair, being the respective third parties in each set of proceedings. The plaintiffs allege that the inclusion of the relevant comments on the Chatroom constituted a publication by Betfair of those comments and are pursuing a claim of libel against Betfair on that basis.

4 4 1.3 A variety of issues potentially arise in the these proceedings. However, the parties were agreed that issues as to the applicability of Directive 2000/31/EC on certain legal aspects of information society services, in particular Electronic Commerce in the internet market ("the E-Commerce Directive") should be tried as preliminary issues in the respective proceedings. It seems likely that the central factual issues in the respect of these proceedings will be tried by a judge sitting with a jury as is the norm in defamation cases. On that basis it was, quite properly, felt by the parties that the issues of European Law which arise under the E-Commerce Directive could not conveniently be dealt with at the same time as a jury trial. This court agreed. For that reason issues concerning the applicability of the E-Commerce Directive were directed to be tried in advance of any trial of the remainder of the issues in these proceedings. The judgment is directed towards those issues. Against that background it is necessary to turn briefly to the issues which arise in the proceedings and the undisputed facts.

2. Facts and Issues

2 2 2.1 The parties agreed on certain facts for the purposes of this hearing. At the material time the Chatroom enabled only registered customers of Betfair to publish their respective opinions. The applicable rules of the Chatroom at that time, which were placed on the front page of the Chatroom webpage, were as follows:

"Any customer wishing to post a message agrees not to post any item that:"

1. Is defamatory or discloses any information that the customer has no legal right to disclose.

2. Is (or contains anything which is) vulgar, hateful, obscene or insulting.

3. Contains any form of advertising, promotional materials or any form of commercial activity.

4. Contains any promotion of any competitors of Betfair of their products.

5. Contains any virus, corrupted files, "Trojan horses" or any other matter that could cause harm to the computer of any third party.

6. Contains any intentionally false or misleading statement or any statement seeking to unfairly manipulate a market.

7. Is an attempt to collect or store data about other customers.

8. Contains a link to any other website address of, or promotes the services of, a competitor of Betfair.

9. Is in a language other than English."

3 3 2.2 It is accepted that no betting activity takes place through the Chatroom. The Chatroom is maintained and run through a separate section of Betfair's website that does not include what is descried as betting functionality.

4 4 2.3 Betfair has pleaded that it did not publish the relevant alleged libels. As an alternative or additional ground of defence, Betfair relies on the exclusion of liability for internet intermediaries contained in the E-Commerce Directive which was transposed into Irish law by the European Communities ( Directive 2000/1/EC) Regulations, 2003 (S.I. 69 of 2003) (the "2003 Regulations"). In particular Betfair has pleaded that it is an "intermediary service provider" providing a relevant service consisting of the storage of information provided by a recipient of the service for the purposes of Regulations 18 of the 2003 Regulations. Betfair has pleaded that it has, in those circumstances, no liability to the plaintiffs where it says it had no actual knowledge of the publication of the alleged defamatory material, was unaware of the facts and circumstances giving rise to same and where it further says that and it acted expeditiously to remove the relevant material on obtaining knowledge of such facts and circumstances. In reply to the defence, the plaintiffs have pleaded that Betfair is not entitled to rely on the E-Commerce Directive or any provision thereof.

5 5 2.4 On 12 February 2007 Herbert J directed that these preliminary issues concerning the application of the E-Commerce Directive be tried without a jury. The questions so directed to be tried at this hearing are as follows:-

1 Whether the defendant in the provision of the Chatroom for its subscribers through its website known as Betfair.com falls within the scope of the E-Commerce Directive? If the answer to issue 1 is yes than the following issues fall to be determined.

2 Whether the defendant is an "intermediary service provider" within the meaning of the 2003 Regulations?

3 Whether the provision by the defendant of the Chatroom for its subscribers through Betfair.com constitutes the "provision of a relevant service consisting of the storage of information provided by a recipient of the service "within the meaning of the 2003 Regulations?

6 6 2.5 In substance there are two sets of issues. Firstly, as will be seen, the E-Commerce Directive and the 2003 Regulations contain a gambling exclusion. The first set of issues are as to whether that exclusion applies in this case so as to take the Betfair Chatroom outside the scope of the protection of the Directive and the Regulation. In the event that the gambling exclusion does not apply a second set of issues arise as to whether the protection of the Directive and the Regulation apply to Chatrooms.

7 7 2.6 In those circumstances, it is appropriate to turn first to the E-Commerce Directive.

3. The E-Commerce Directive

2 2 3.1 The E-Commerce Directive was put in place to remove obstacles to cross-border online services and to provide a legal framework for E-Commerce. The E-Commerce Directive, amongst many other things, defines the circumstances in which internet intermediaries, as defined, can be held accountable for material which is hosted, cached or carried by them but which they did not create. The relevant provisions are not confined to the publication of defamatory material.

3 3 3.2 The principal provision relevant to the issues in these proceedings is Article 14 of the E-commerce Directive, which relates to "hosting" and provides as follows:-

2 "1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:

(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the...