The law has always recognised that adults of sound mind must look to themselves and take responsibility for their own actions, however unwise. The High Court made that point in ruling that a spread betting company could not be blamed for a punter’s losses of over £2 million.
The man, who had made about £10 million from the sale of his business, claimed that the company’s employees had enticed him to aggressively bet on movements in stock indices with no regard to his best interests. In the knowledge that he had large sums of money at his disposal, but no aptitude for successful spread betting, they had induced him to stake increasingly large sums in an unfair and unprofessional manner that breached conduct rules that apply to financial services providers.
In dismissing his claim, however, the Court noted that it was not suggested that he had developed a diagnosable gambling addiction until after his account with the company was closed. He had been betting within his means and the company was not on notice that he might be a problem gambler.
The company had followed industry rules in assessing his suitability for spread betting and had offered an execution only service, merely following his instructions. To that extent, his spread betting was similar to placing wagers on the outcome of horse races. Although he had been sent market information, he had at no time been contacted by the company’s staff and solicited to bet.
The company was under a duty to act honestly, professionally and fairly, but that did not mean that it was obliged to prevent clients from executing transactions that had been assessed as appropriate for them. The company had entertained, or offered to entertain, the man at race meetings, golf days and football matches, but that did not in any meaningful sense amount to encouraging him to bet. Even had the company taken steps to prevent him placing bets, the reality was that he would have obtained spread betting facilities elsewhere.
