Fighting ticket touts: the duty to provide ticket information, lessons from first test case under s.90 Consumer Rights Act 2015
Published 26 July 2019 By: Louise Millington-Roberts
For those of us who work in event management, ticketing has always been a contentious issue. The government’s historic preference was for the industry to police itself, this was until it acknowledged the scale of ticket fraud in the UK and the lack of transparency the consumer faced.1 When the government made the historic decision that the industry should no longer continue to regulate itself, it introduced obligations on sellers of tickets via secondary ticketing facilities, and on the secondary operators themselves, under the Consumer Rights Act 2015 (CRA 2015).
April 2019 saw the conclusion of a test case under the new legislation that those in secondary ticketing had been eagerly anticipating. The case was brought by North Yorkshire County Council (NYCC) against Worldwide Ticket Limited. It named ticket touts who had been trading in tickets on the secondary market in breach of Section 90 of the CRA 2015 (see footnotes2) which relates to the duties on re-sellers to provide information about tickets. Despite the ticket touts admittance of their guilt, the case (which was the first of its kind heard by a Tribunal) granted their appeals due to administrative failings on behalf of NYCC (as described below). The case does however highlight the procedure that must be followed, as well as providing guidance when setting financial penalties. A copy of the decision is available here.3
This article analyses the case and the lessons learned from it. Please note that this article builds upon the author’s previous LawInSport articles that cover historical developments in this area of law written in 20134 20145 and 20176.
North Yorkshire County Council –v- Worldwide Ticket Limited and Others
Background – The CMA Compliance Review
In December 2016, the Competition and Markets Authority (CMA) launched investigations into compliance by the ticketing industry with consumer protection legislation, following concerns identified “during its compliance review, that people are not getting the full range of information required by consumer protection law when buying tickets put up for resale” 7. The CMA focused its investigations on ticket resale platforms, whilst National Trading Standards (a UK government agency) investigated the conduct of the sellers who sell via the platforms.
Since the CRA 2015 was first introduced, specific information about tickets must be provided to buyers (see Footnote 2). Event rights holders (whose tickets are being resold by sellers, often in breach of ticket terms and conditions) have been providing the CMA and Trading Standards with examples of non-compliance with this legislation and have been eagerly awaiting its enforcement.
In this particular case, NYCC, the local weights and measures authority, the enforcement authority for the purposes of enforcing this legislation (under section 93 of CRA 2015), met with the CMA and Trading Standards who provided NYCC with evidence that the ticket touts in this case had breached their duty to provide information about tickets pursuant to section 90 of CRA 2015.
The ticket touts did in fact accept that they had breached the legislation, however they challenged the financial penalties that NYCC were looking to impose.
Discovery of Sufficient Evidence
The appeals in this case were granted as NYCC were found to have “sufficient evidence” of the breaches in their possession by 31 August 2017, yet failed to serve a notice of intent to impose a financial penalty within the required 6 months of receipt of the evidence pursuant to Schedule 10 CRA 2015 (see below).
It was accepted that it did not matter that the schedules of evidence received from the CMA were unprompted and not formally requested by NYCC. The Tribunal accepted that it is the knowledge attributable to the “appropriate officer” which is the relevant test of when a breach was “discovered” (Paragraph 30) and that the officer acting for NYCC did have clear evidence of breaches and failed to act on this information within the time limit set8.
Notice of Intent Procedure
Schedule 10 of the CRA 2015 sets out the procedure that must be followed to impose a financial penalty, including the service of a notice of intent. It also provides for a right of appeal against a final notice.
The Act provides for specific time frames, including that a notice of intent must be served “before the end of the period of 6 months, beginning with the first day on which the authority has sufficient evidence of the persons breach” (Schedule 10 (1)(2)).
Within 28 days beginning the day after the notice was sent, written representations may then be made by the person on whom the notice is served (Schedule 10 (2)). After the expiry of this period the enforcement authority must decide whether to impose a financial penalty and the amount (Schedule 10 (3)(1), and if it decides to do so, must serve a final notice (Schedule 10 (3)(2)) outlining amongst other things the amount, reasoning, time for payment and right of appeal (Schedule 10 (3)(4)).
The Tribunal found that the appeals against a Final Notice were allowed as the decision to impose a financial penalty was “wrong in law”. The Judge said that “Parliament clearly intended for there to be a time limit of six months only between an enforcement authority having sufficient evidence of a breach and the service of the Notice of Intent in respect of that breach” (Paragraph 39).
In this case NYCC should have either served a notice of intent within 6 months of receipt of the disclosed evidence or made its own test purchases at a later date followed by service of a notice of intent, rather than relying on the CMAs test purchase evidence.
The Judge also gave guidance with regards to the calculation of a financial penalty as the ticket touts also challenged the severity of the fines. The amount of the penalty is within the discretion of the local weights and measures authority as provided for by Section 93 (9)(a) of the CRA 2015. The maximum penalty that can be imposed is £5000 (Section 93 (9)(b)) which was imposed in this case. This is specifically provided for as being in respect of the same breach (Section 93 (8)).
The ticket touts in this particular case had been found to have breached the provision of information requirements by not providing seat numbers, one tout in 69% and the other in 83% of the live listings on one platform and 95% on another platform.
In this case the Judge did not find as to whether the maximum penalty imposed was a fair amount. Rather, she found that there is no power to
“take into consideration any other historic breaches, especially where these had not been notified to the person on whom the Notice of Intent was served”. (Paragraph 44).
As NYCC set the financial penalty with “reference to undisclosed information” regarding the ticket touts trading history, the approach was deemed to have been “procedurally unfair”.
Only tough action will deter defiant ticket resellers and operators, and it is unfortunate that this test case did not do the industry justice.
It remains to be seen if the current legislation will ever deter ticket touts and how exactly the implementation of the financial penalty will be interpreted. Whether a £5,000 fine for breach of the CRA 2015 is substantial enough, if only imposed in relation to all listings for a particular event or of a particular kind.
It is clear to the author that as in all claims, it is the compilation of the evidence which is of vital importance and that focus should not just be on one particular act of non-compliance, in this case the provision of seat numbers, but all acts of non-compliance as well as trading history.
Should the Government legislate further?
In the author’s opinion, legislation needs to apply to all ticket touting, whether on the street or online, and a cap on ticket resale price of no more than 10% should also be implemented to price both ticket touts and fraudsters out of the market. The author has historically championed complete transparency to help fight ticket fraud, and to a certain extent the Act provides for this. However, for the legislation to be effective, not only does it have to be effectively enforced, the financial penalty needs to be a significant deterrent.
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- Tags: Commercial | Competition and Markets Authority (CMA) | Consumer Rights Act 2015 | Contract | Dispute Resolution | Regulation | Ticket Touts | Trading Standards
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Louise has extensive experience working with major brands in the field of sport, media, commercial and intellectual property law, providing practical commercial advice on specialist legal matters including rights and brand protection, the commercialisation of brand, sponsorship, endorsement, and event management.