In the judgment of The Racing Partnership Limited & Ors v Sports Information Services Limited  EWCA Civ 1300, the Court of Appeal considered important issues relating to: (1) the legal protection of sports data and other information which is not subject to traditional intellectual property rights; (2) the scope of an action in breach of confidence; and (3) the nature of the economic tort known as unlawful means conspiracy.
The case related to the creation and provision of certain information relating to horseraces by the Defendant (“SIS”) to various bookmakers from January to July 2017. The information in question comprised betting odds (known as “betting shows”) on the horses in the races and other data (known collectively as “raceday data”), relating to horseraces taking place at certain racecourses over which TRP had data rights (the “TRP Courses”). Raceday data includes for example, non-runners and the “off” (i.e. the moment a race starts).
The Claimants (“TRP”) advanced three categories of claim against SIS at the trial at first instance:
intellectual property claims, being infringement of copyright and infringement of a database right on the basis that SIS were copying or otherwise unlawfully making use of TRP’s own betting shows. SIS counterclaimed for declarations that its creation of betting shows did not infringe TRP’s rights in this way;
a claim in breach of confidence on the basis that the raceday data emanating from the TRP Courses was TRP’s confidential information which was being used by SIS without authorisation; and
a claim in the economic tort of conspiracy by unlawful means on the basis that SIS conspired with bookmakers and the Tote to use unlawful means to injure the TRP.
In a judgment handed down by Mr Justice Zacaroli in May 2019, the claim in breach of confidence was partly successful. The other claims failed, while SIS’s counterclaim succeeded.
At the Court of Appeal, TRP appealed in respect of the claim in the economic tort of conspiracy by unlawful means, arguing against Zacaroli’s J two key findings that:
(following British Industrial Plastics Ltd v Ferguson  4 All ER 504 and Digicel (St Lucia) Ltd v Cable & Wireless plc  EWHC 774 (Ch)) a party’s liability under the tort of unlawful means conspiracy, at least where (as here) the unlawful means in question consisted of breach of confidence, depended upon the defendant having knowledge (whether actual or ‘blind eye’ knowledge) and also at least one other conspirator having such knowledge; and
the unlawful means for the purposes of the tort in this case were not directed TRP and the “instrumentality of the harm caused to them”.
The Defendants appealed in respect of the claim in breach of confidence, arguing against Zacaroli’s J conclusion that:
‘raceday data’ had the necessary quality of confidence because TRP had the ability to impose restrictions on the use of raceday data and it had commercial value; and
a reasonable person in SIS’s position would have appreciated that the Tote acquired the raceday data in circumstances importing an obligation of confidentiality.
The Court upheld the appeal in respect of breach of confidence (2:1) and also upheld the appeal in respect of unlawful means conspiracy (again, 2:1).
Particularly striking, however, is that between the four judges who have heard this case, one at first instance and three in the Court of Appeal, every combination in respect of the two issues was achieved: one judge found for TRP on both issues, one for SIS on both and the other two judges found for TRP on one and SIS on the other, but in both combinations, underlying the complex and uncertain nature of the law in question.
We consider each of the issues in turn.
Breach of confidence
As noted above, the breach of confidence claim related to the use by SIS of raceday data from the TRP Courses. These data were provided to SIS by the Tote, which ran the Totalisator in Great Britain (that is the form of betting on horseraces where winning punters simply share the pool of total amounts staked as opposed to receiving winnings on the basis of fixed odds offered by a bookmaker).
The Tote had operated on racecourses in Great Britain since its formation in 1928, including the TRP Courses in question in this case. In doing so, it collected and disseminated raceday data around the country (and indeed the world) for the purposes of its pool betting service. From 1 January 2017, it made the raceday data it collected from the TRP Courses available to SIS so that SIS could include this in its package for bookmakers, for the purposes of SIS’s fixed odds betting services. As noted above, TRP claimed the raceday data (originating from the TRP Courses over which it held data rights) was subject to an obligation of confidentiality owed to it and that the use of the raceday data by SIS constituted a breach of that obligation of confidentiality.
First Instance Decision
The requirements for a claim in breach of confidence are those set out in Coco v AN Clark (Engineers) Ltd  RPC 41, 47: (1) the information must have the necessary quality of confidence; (2) the information must have been imparted in circumstances importing an obligation of confidence; and (3) there must be an unauthorised use by the confidant to the detriment of the rights holder.
Zacaroli J analysed the relevant authority, that of the House of Lords in Douglas & Ors v. Hello! Ltd & Ors  UKHL 21. In that case, concerning a duty of confidentiality in respect of photographs of the wedding in 2000 of Catherine Zeta Jones and Michael Douglas, Lord Hoffman, who gave the leading judgment, held that the photographs were subject to an obligation of confidentiality owed to the couple because they contained information: (a) of commercial value; and (b) over which the couple had sufficient control to enable them to impose an obligation of confidence.
Zacaroli J applied that reasoning to the raceday data for the TRP Courses holding that: (i) the raceday data had the necessary quality of confidence, because TRP had the ability to impose restrictions on the use of raceday data and it had commercial value; and (ii) a reasonable person in SIS’s position would have appreciated that the Tote acquired the raceday data in circumstances importing the obligation of confidentiality (i.e. for the purposes of its pool betting service), which therefore precluded its use for fixed-odds betting. On these bases, the judge held that SIS had acted in breach of confidence in receiving and disseminating the raceday data.
Court of Appeal Decision
Philips LJ and Lewison LJ upholding the appeal; Arnold LJ dissenting
(i) Was the raceday data confidential?
The Court noted that TRP’s claim as pleaded was limited to the “Key Raceday Triggers” rather than any wider category of raceday data and Zacaroli J had been wrong to make any finding in respect of raceday data generally. A re-analysis of whether the information within TRP’s claim was confidential was therefore undertaken – again in line with the principles in Hello!, having due regard this time to individual “Key Raceday Triggers” only. It was also noted that Zacaroli J had failed to distinguish between the individual Key Raceday Triggers on the one hand and the compilation of those Key Raceday Triggers on the other.
The Court assessed whether Key Raceday Triggers individually could be considered both to be of commercial value and capable of being placed under restricted use by TRP. An important factual consideration in this regard was that (at least some of) the Key Raceday Triggers are pieces of information that are televised live when the races are shown (for example, information such as the “off” and both the finish and the winner can be viewed in real time on television). Having regard to this reality, the Court came to the conclusion that it could not credibly be said that information which anyone with a television set could receive in real time is confidential information.
Lewison LJ did recognise that the compilation of the Key Raceday Triggers was “potentially” of a confidential nature, but emphasised that it was a compilation made by the Tote and so any value or control belonged to the Tote and not TRP.
(ii) Should SIS have been aware that the information was confidential?
On the second issue, Lewison LJ and Phillips LJ both found that the judge at first instance had approached the question from the wrong starting point. At trial, Zacaroli J appeared to focus his analysis of the issue on whether there was a legal prohibition – by way of a contract or otherwise – that SIS ought to have been cognisant of which prohibited their ability to disseminate raceday data. The judge found that there was, and that SIS ought to have been aware of this. The Court of Appeal’s view was that this resulted in the imposing of unfair standards upon SIS as to what they could reasonably be expected to know about the nature of information supplied to it by the Tote; specifically, whether any such information was confidential.
The Court reconsidered the relevant authorities on the test of where obligations of confidence arise. Lewison LJ noted that in the leading case Coco v AN Clark (Engineers) Ltd, Megarry J formulated the test to mean that information is confidential if any reasonable man would realise, upon reasonable grounds, that information is given to him in confidence. It was further noted that in Attorney-General v Guardian Newspapers Ltd (No 2)  1 AC, Lord Goff (albeit speaking in terms of ‘notice’ rather than ‘knowledge’) communicated the test as follows: “the yardstick for judging whether or not a document is “obviously confidential” is the reasonable person standing in the position of the recipient” [at 213]. It was stressed that the question is not “what is the correct legal analysis”, but “what a reasonable person would be expected to understand”.
Lewison LJ and Phillips LJ decided that the trial judge had unduly derogated from this well-established standard. The result imposed a standard of legal knowledge and analytical skill upon SIS akin to those that might ordinarily be expected from a High Court Judge. The error was that the judge started with his own legal analysis of the situation (that information, in whole or in part, supplied to SIS by the Tote was confidential) and then asked whether that was nullified by assurances and warranties to the contrary given to SIS by the Tote.
A relevant fact in this case was that SIS had in fact positively considered whether information supplied to them might be subject to rights held by TRP and indeed went so far as to make several inquiries of the Tote in respect thereof. The Court found it significant that SIS, in response to those inquiries, received not only assurances to the negative, but also a contractual warranty to that effect from the Tote. As noted above, the test is what a reasonable person in the position of SIS (having received assurances and contractual warranties) should have understood: should SIS have second guessed the assurances and the warranty? On this reasoning, it was held that the only possible answer is that SIS were right to rely on the assurances given by the Tote, a commercially experienced and reputable company. Indeed, Lewison stressed that “it would be difficult to see what else a reasonable person should have done”.
Accordingly, the Court of Appeal held that SIS could not reasonably have been aware that the information supplied to them by the Tote was confidential. For that reason, the claim in breach of confidence against SIS failed.
Unlawful means conspiracy
In the case at first instance, TRP advanced a range of alleged unlawful means on the part of SIS to found this part of their claim. These included the alleged breach of confidence in respect of the use of the raceday data (see above), also that SIS was in breach of contract with two betting exchanges by using their data for commercial purposes in breach of their terms and conditions. In respect of the latter ground, it should be noted that the exchanges themselves brought no claims against SIS and TRP instead sought to use an alleged breach of a contract (to which they were not a party) to found a claim in unlawful means conspiracy.
The cause of action of unlawful means conspiracy is one of the well-established economic torts. However, despite having been subject to considerable judicial consideration in recent years, the parameters of the tort remain extremely uncertain in a number of regards. It is questionable whether the Court of Appeal judgment in this case has offered much further clarity in this regard.
First Instance Decision
The commonly accepted elements to establish the tort of unlawful means conspiracy are: (1) a combination or agreement between two or more persons; (2) to take action which is unlawful; (3) with the intention (but not necessarily the predominant purpose) of causing damage to the claimant; and (4) the claimant suffers damage as a result (see for example, Kuwait Oil Tanker Co SAK v Al-Bader (No.3)  2 All ER (Comm) 271 (“Kuwait Oil”).
At first instance, Zacaroli J made three key rulings.
- Firstly, SIS’s use of the exchanges between March and September 2017 did not constitute a breach of contract, so the period in which a breach of the exchanges’ terms and conditions might found an unlawful means conspiracy was limited to a short period from January to March 2017.
Second, that any breach of the betting exchanges’ terms and conditions by SIS did not constitute unlawful means for the purposes of the tort because any such breach was not directed at TRP and nor was it the “instrumentality of the harm caused to them” as he stated was required.
Thirdly, that a party’s liability under the tort of unlawful means conspiracy, at least where (as here) the unlawful means in question consisted of breach of confidence, depended upon the defendant having knowledge (whether actual or ‘blind eye’ knowledge) and also at least one other conspirator having such knowledge.
Zacaroli J considered the many authorities on this complex area of law.
In British Industrial Plastics v Ferguson  4 All ER 504, where there were parallel claims for inducing a breach of contract and conspiracy to injure by unlawful means, the Court of Appeal held that it is an essential requirement in the tort of conspiracy that the defendant knew of the unlawfulness of the conduct. By contrast, in Belmont Finance Corporation v Williams Furniture (No.2)  1 ALL ER 393, the Court of Appeal came to the opposite conclusion, holding that ignorance of the law was no defence in the tort of conspiracy.
Both decisions were referred to by the Court of Appeal in Meretz Investments NV v ACP Ltd  Ch 244, where it was concluded that it is a defence to an action for conspiracy to injure by unlawful means (a different but related tort) if the defendant acted in the belief that he had a lawful right to act as he did.
Subsequently, the issue has been considered in Digicel (St Lucia) Limited v Cable & Wireless Plc  EWHC 774 (Ch), First Subsea Ltd v Baltec Ltd  EWHC 866 (Ch) and, most recently, Stobart Group v Tinkler  EWHC 258 (Comm). Unpredictably, while Digicel followed Ferguson and Meretz, First Subsea preferred Belmont, as did Stobart.
Ultimately, Zacaroli J, followed Ferguson and Digicel, finding in favour of SIS.
Court of Appeal Decision
Arnold LJ and Philips LJ upholding the appeal; Lewison LJ dissenting
(i) Was the breach by SIS directed at TRP or instrumental of the harm caused to them?
As noted above, Zacaroli J held that any breach of the betting exchanges’ terms and conditions by SIS did not constitute unlawful means for the purposes of the tort because any such breach was not directed at TRP and nor was it the “instrumentality of the harm caused to them”. The Court of Appeal however turned heel on Zacaroli J’s reasoning, finding that SIS’s breach of the exchanges’ terms and conditions was directed at TRP and instrumental of the harm caused to them.
In considering this issue, the Court considered the oft-cited courier/pizza delivery example in which a hypothetical courier/pizza delivery business, by encouraging its delivery drivers to ignore speed limits and jump red lights, is able to obtain more custom to the detriment of its competitors. The question is whether the unlawful driving acts could be deemed as directed towards competitors of the courier/pizza delivery business. It was accepted by the majority in Commissioners v Total that, in that example, the pizza delivery business should not be liable. The reasoning is as follows: the cause of the claimant’s loss results from the competitiveness of the defendant’s business due to its speedier services, not from the breaking of traffic laws and regulations; the defendant’s breach of traffic laws is an incident of fulfilling the promise of speedier deliveries, not the cause of the claimant’s loss.
The key question for the Court of Appeal in this case then was whether SIS’s breaches of the exchanges’ terms and conditions caused TRP loss or were simply the occasion for that loss – in other words, could the present case be distinguished from the pizza delivery example? The Court held (hesitantly) that the distinction could be made.
It was viewed that since TRP suffered loss because it was competing with SIS to supply the same information to the same customers, and SIS obtained some of that same information by breaching the exchanges’ terms and conditions, the unlawful means did directly cause loss to TRP.
(ii) Is knowledge of the unlawful means required in unlawful means conspiracy?
The Court of Appeal considered that the correct starting point was to distinguish between those cases that did not consider the issue at hand directly (i.e. the authorities dealing with issues related or ancillary to knowledge), and those which did in fact consider the role of knowledge of the unlawful means as an issue in the case. The Court stressed that whilst Ferguson and Digicel – on which Zacaroli J based his judgment – were authoritative on the law of unlawful means conspiracy in several respects, they were not authorities on the specific issue of whether knowledge of the unlawful means is a requirement for that tort, the specific issue in this case.
In British Industrial Plastics Ltd v Ferguson  4 All ER 504, where a defendant received information about a patentable invention from the claimant’s former employee, it was expressed in the judgment that 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 [514D]. Arnold LJ and Phillips LJ concluded in their analysis however that, ultimately, Ferguson cannot be said to be binding authority for such a proposition because whether the defendants were required to have knowledge of the unlawfulness of the means for the tort of unlawful means conspiracy was not in issue in the case. It appears the decisions with regards to the same issue in both Meretz and Digicel were founded, therefore, not on binding authority.
Belmont Finance Corp v Williams Furniture Ltd (No 2)  1 All ER 393 however did consider the issue directly. In that case, it had been alleged that there had been a conspiracy involving a company providing unlawful financial assistance for the purchase of its own shares. It was held that, given conspiracy is an agreement between two or more persons to effect an unlawful purpose which results in damage to a third party, a person will be party to a conspiracy if he knows the essential facts to constitute that conspiracy, even if he does not think that they constitute an offence. The three Lords Justices in that case were in agreement to that effect. Here, the Court followed Churchill v Walton [1967 1 All ER 497], [1967 2 AC 244], which despite involving a strict liability criminal offence, did not appear to turn on those circumstances and so the formulation of unlawful means conspiracy in that case was deemed authoritative.
>SIS argued that Ferguson was not considered in the Belmont case and so Belmont had been decided per incuriam. However, Arnold LJ and Phillips LJ agreed that, as discussed above, since the question of knowledge was not directly in issue in Ferguson, Belmont was not decided per incuriam.
It followed ultimately that the Court of Appeal majority viewed Belmont as the binding authority on this issue and found, therefore, that knowledge of the unlawfulness is not required for unlawful means conspiracy.
This case underlines the extreme complexity and uncertainty which arises in relation to the legal protection which can be afforded to types of commercially valuable information which is not subject to protection by traditional intellectual property rights. It is very unusual for the Court of Appeal to reverse wholesale a decision at first instance (that is reversing both a finding of liability and non-liability).
More specifically, the parameters of the tort of unlawful means conspiracy have been extraordinarily broadened by the decision of the Court of Appeal. In particular, in theory on the low test suggested by the Court of Appeal, privity of contract in the commercial context will be severely undermined since third parties who suffer detriment due a breach of a contract between two other parties will be in a much stronger position to sue over it.
This case may yet go to the Supreme Court, in which case, going by the very mixed judicial decisions so far, there is any chance of yet another formulation of the test for and application of the tort of unlawful means conspiracy.
CMS acted for SIS in this case. SIS is seeking permission to appeal the outcome in relation to unlawful means conspiracy to the Supreme Court.
To read the judgment in full please click here.