Illegal ticket touts who contend that their crimes are victimless are seeking to justify the unjustifiable. The Court of Appeal made that point in a landmark case of crucial importance to the sports and entertainment industries.
The case concerned two leading lights of a company that purchased tickets in bulk from event organisers before re-selling them at a substantial mark-up via secondary ticketing websites. So-called ‘bots’ and other software were used to dupe event organisers into believing that each ticket was being purchased by an individual. Prosecutors estimated that, during a 30-month period, the company spent about £4 million on acquiring tickets and obtained returns in excess of £10.8 million.
Following a trial, both men were convicted of fraudulent trading, contrary to Section 993(1) of the Companies Act 2006, and of possessing or controlling an article – the relevant software – for use in fraud, contrary to Section 6(1) of the Fraud Act 2006. They each received substantial sentences of imprisonment.
Ruling on their challenge to their convictions, the Court noted that event organisers routinely impose restrictions limiting the number of tickets that any one individual can purchase and prohibiting their re-sale. The object of such restrictions is to prevent the very activity in which the company had engaged.
Organisers were concerned that the re-sale of tickets at hyper-inflated prices caused them reputational harm and was deeply unfair to fans. The relevant tickets were re-sold without alerting consumers to the real risk that they would be cancelled, and entry to events refused, because of the route by which they had been acquired.
In his defence, one of the men argued that at least some primary ticket sellers were aware that the company was purchasing tickets with a view to re-selling them in bulk on the secondary market and positively encouraged the practice. The Court, however, found that there was no requirement for the prosecution to prove an intention to deceive third parties in order to establish a fraudulent purpose. The acid test of fraud is dishonesty and the Court noted that a fraudulent purpose may be proved before anyone is actually defrauded or becomes an actual victim of a fraud.
The men’s activities had caused real and proven harm to the interests of others and there was nothing unfair in event organisers prohibiting re-sale of tickets. As a matter of common sense, such restrictions passed with the tickets and bound all future purchasers. The truth was that the men were well aware of the risk of cancellation to which the company was exposing consumers and that its whole business model rested upon not highlighting that risk.
The trial judge’s summing up of the case was not unbalanced and he made no legal error in sensibly boiling down the legal issues for the benefit of the jury. The Court commended his handling of a novel and complex trial. The men’s appeals were dismissed.