Online Ticket Exchanges – RFU does the Double
Case review: Rugby Football Union v Viagogo Ltd. ( EWCA Civ 1585), ( EWHC 764(QB))
On December 20, 2011 the Court of Appeal directed Viagogo Ltd., (“Viagogo”) an online ticket exchange to furnish details such as the names and addresses of persons who advertised and sold tickets of the 2010 Autumn Internationals and the 2011 Six Nations matches held at the Twickenham stadium through the website at a price higher than its face value, to enable Rugby Football Union (“RFU”) to take action against the wrongdoers. “if through no fault of his own a person gets mixed up in the tortuous acts of others so as to facilitate their wrongdoing whether voluntarily or involuntarily he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers and co-operating in righting the wrong if he unwittingly facilitated its perpetration.”
The thriving ticket-scalping trade is fuelled by sporting events enjoying an enormous mass appeal and fan following. The scarcity and non-availability of tickets to these events has resulted in the emergence of an extensive market for scalpers, who look at this as an alluring opportunity to cash in on the public craze and frenzy. Though local and national laws have been formulated by the legislating bodies in England to combat this problem, the significant challenge and difficulty arises in identifying and tracking the miscreants. The Criminal Justice and Public Order Act, 1994 was enacted to penalize unauthorized persons touting tickets of designated football matches. According to Section 166 of the above mentioned act, “an unauthorized person cannot sell a ticket for a match or otherwise dispose of such a ticket to another person.” A person is deemed to be “unauthorized” unless he has been authorized in writing to sell or otherwise dispose of the tickets by the organizers of the match. In addition under the said section a reference to sell a ticket included a reference tooffering a ticket for sale, exposing a ticket for sale, making a ticket available for sale by another, advertising that a ticket is available for purchase, giving a ticket to a person who pays or agrees to pay for some other goods or services or offering to do so. A person guilty of violating the provisions of this section, was liable to a fine not exceeding level 5 on the standard scale (£5,000).
However, the law makers realized that the provisions of this section were insufficient in restraining the illegal practice as touts exploited the loop holes in the existing legislation to continue with their businesses. Hence the Violent Crime Reduction Act, 2006 was enacted to amend the existing law and extend its applicability to other disguised actionsf touting. It brought people offering tickets as a part of wider hospitality/holiday packages under the purview of Section 166, made it an offence for newspapers to carry advertisements for ticket touts and prohibited touts from offering match tickets free on purchase of another over priced commodity or article.
In addition the organizers, administrative and management bodies of these sporting events indulge in providing elaborate terms and conditions on the venue tickets which define what may be termed as valid transfers and what may amount to as unlawful and actionable wrongs. The individuals purchasing such tickets are bound by these terms and conditions and are liable to pay a penalty or face proceedings or any other sanction in case of breach.
Though touting outside the event venue or in its vicinity are the most popular and conventional methods used by the scalpers, using the secondary ticket websites on the internet for the same is fast emerging as an attractive alternative as it not only cuts down the risks of running into enforcement agencies but also ensures additional identity protection as most of the websites incorporate privacy policies which safeguard personal information of their users. The use of websites for scalping also makes the discovery and ascertaining of the touters extremely expensive, complicated, laborious and time consuming for the organizers.
In Rugby Football Union (RFU) v. Viagogo ltd, the applicant is the governing body for rugby union in England and is also the owner of Twickenham stadium. RFU has exclusive authority to issue permissions or licenses for entry to rugby matches organized at the stadium. These permissions are issued in the form of a bar coded paper ticket at affordable and reasonable prices with the intention to increase public interest and involvement in the sport. The defendant operates a flourishing online business and facilitates the trade in tickets by providing a secondary market for prospective buyers and sellers.
The applicants were aggrieved by the unauthorized advertisements and sale of tickets to the Autumn International 2010 and the Six Nations 2011 matches at rates in excess of the face value of these tickets conducted by individuals on the Viagogo platform and approached the Queen’s Bench seeking a Norwich Pharmacal order, requiring Viagogo to identify the names and addresses of such individuals who used its website to make the illegitimate transactions.Typically, a Norwich Pharmacal Order requires a respondent to disclose certain documents or information to the applicant. The respondent must be either involved or mixed up in a wrongdoing, whether innocently or not, and is unlikely to be a party to the potential proceedings. The order is granted only where it is necessary, in the interests of justice. Orders are commonly used to identify the proper defendant to an action or to obtain information to plead a claim.
In addition since half the tickets to the stadium were distributed through member clubs the applicants also sought identification of other particulars like the gate, block, row and seat number of tickets sold on the website, to determine where the ticket had originally come from. RFU contended that each ticket was issued on certain terms and conditions which forbade its advertisement and sale at a price higher than its face value and provided that the permission granted through the ticket would stand automatically revoked if the ticket was transferred in contravention of the terms and conditions and the individual accessing the stadium using the unlawful ticket would be a deemed trespasser and would consequently be denied entry to the stadium or ejected from it after admission.
In light of the contentions and arguments placed before the Queen’s Bench the main issues that came up for consideration and deliberation were:
- Were arguable wrongs committed against the RFU?
- Whether RFU intended to seek redress for the wrong?
- Whether disclosure of the information which RFU requires is necessary for it to pursue the redress against the wrongdoers?; and
- Whether RFU has an arguable case?
Queen’s Bench Judgment
While considering the scope of the first issue, the Bench concluded that arguable wrongs were committed against RFU even though Viagogo may have got involved in it unintentionally. The Court accepted the contentions on behalf of RFU that the Clubs, by virtue of obtaining tickets for distribution, do not acquire any title in it and only act as agents of the RFU which enjoys sole ownership of the tickets. The Clubs were therefore not only bound by the terms stipulated by RFU which prohibit the advertising or sale of the tickets at a price higher than its face value, but were also obligated to distribute the tickets on the same conditions regarding transfer and sale. The Bench concurred with the submission made on behalf of RFU that if any tickets were sold or transferred in violation of the ticket terms and conditions, it would act as an automatic expiration of the rights conferred by such ticket and the person entering the stadium using such an unlawful ticket would be a trespasser. The Bench also agreed that the people or individuals including the original applicant (i.e., the Club) and other intermediary transferees would be joint tort feasors as they aided and abetted the wrongdoing. Lastly it confirmed that even though there was no positive action which showed the revocation of the ticket, the holder was aware from the terms and conditions enlisted on it that he is acting in violation of the policy and would thus be guilty of trespassing if he enters the stadium.
With regard to the second issue, the Bench held that RFU was genuinely seeking a relief against the wrong committed and the same cannot be termed insignificant or inconsequential only on the ground that RFU may not pursue legal proceedings against the wrong doers. The fact that RFU may take action against the original recipient/club members or expose the wrongful conduct of the intermediate transferees or undertake any other action which it may deem appropriate to prevent such activities in future is a substantial remedy validating the passing of Norwich Pharmacal order in their favour.
On the issue of whether the disclosure of information was necessary for the redress sought by RFU the Bench shot down the arguments proposed on behalf of Viagogo that there were other alternate sources for obtaining the said information such as conducting test purchases on the website or carrying out spot checks at the stadium and in any case the information provided by Viagogo will not enable RFU to identify significant number of wrongdoers. The Bench held that the alternatives suggested were not pragmatic and rather ludicrous and that since RFU was devoid of any straightforward and available means to obtain the said information the passing of the Norwich Pharmacal order seemed to be the only practical remedy.
The Bench while rejecting Viagogo’s claim that a substantial number of its customers may be innocent as they did not intend to commit a wrong, held that intention was of no consequence as the customers were knowingly acting in contravention of the terms and conditions of the ticket which made them liable to any action RFU wished to take against them including denying them entry into the stadium and ejecting them after admission. The Bench also dismissed the argument that Viagogo’s customers enjoyed the right to privacy in relation to their personal information and passed the Norwich Pharmacal order in favour of RFU requiring Viagogo to provide the information sought by RFU to enable them to seek adequate redress.
Judgment of the Court of Appeal
Viagogo challenged the decision of the Queen’s Bench inter alia on the grounds that the said Order amounted to a violation of the fundamental rights of the individuals guaranteed under Articles 7 and 8 of the Charter of the European Union which provided for the protection of the individual’s private and family life and data concerning him/her which may be processed in a fair manner for specified purposes only and on the basis of the consent of such individual or some legitimate purpose laid down by law. Viagogo contended that Section 35 of the Data Protection Act, 1998, which allowed for the disclosure of personal information if it was necessary for the purpose or in connection with any legal proceedings, obtaining legal advice or for exercising, establishing or defending legal rights, was subject to the conditions of being “necessary” and “proportionate” to the aim sought to be achieved through such disclosure. It was argued on behalf of Viagogo that since none of these conditions were met, the order of the Queen’s Bench be set aside.
The judgment of the Court of Appeal in favour of RFU will strengthen RFU’s resolve to pursue similar litigations against other secondary ticket websites which were used by individuals to make illegitimate sales to the 2010 Autumn Internationals and the 2011 Six Nations matches held at the Twickenham stadium. It may also serve as a significant precedent for event organizers and administrators who wish to seek information from these websites and other online facilitators to track touters and scalpers and curb such malpractices. Though it may be too early to suggest the idea but this judgment may have just rung the death knell for ticket touters and scalpers who had found a safe haven on the internet. However, one can definitely not ignore or overlook the numerous other methods that scalpers could resort to, to carry on trading. In India, except Rajasthan no other state in India specifically penalises the unlicensed resale of tickets to sporting events, even though it is a well established and flourishing business offline (and increasingly online). In addition, the punishments provided are extremely inadequate and inconsequential to have any deterrent effect. However, in order to effectively regulate the practice of ticket scalping, big players like the IPL and ICC have started to act proactively, by subjecting each ticket to certain terms and conditions which are clearly printed on the ticket and prohibit any unauthorized transfer, sale, advertisement and so forth.. With the growing popularity and interest in sporting events, a legislation which complements the measures taken by event organizers to curb scalping should be enacted.
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