IRISH PREDICAMENT

28 November 2008

A warning for lotto syndicates?

 

A long running Irish civil dispute over shares in a lotto syndicate is currently playing out in the courts, and may serve as a warning to the many informal syndicates that share decisions should be documented and reviewed regularly.

The case dates from 2000 and involves a pub syndicate of five men. Unfortunately, one of them is alleged to have been a consistent late payer and abusive to boot when reprimanded. As a result, the other four members ceased chasing him for his contribution and effectively regarded him as out of the syndicate.

A year later the syndicate hit the big prize and shared out the Euro 2 million in four equal tranches. When he heard of their good fortune the fifth member claimed that he had never been definitively excluded from the syndicate, the other four had accepted his late payment habits on previous occasions and he was therefore entitled to one fifth of the big prize!

A court action followed, which the fifth member won with Euro 100 000 legal costs.

Incensed, the four regular members took the case on appeal to the Supreme Court. In their appeal, they argued that the trial judge erred in finding the late-payer was a member of the syndicate when, they contend, he had not contributed anything to the purchase of the winning ticket and had not arranged for any contribution to be made on his behalf to that purchase.

They also submitted the trial judge was wrong to conclude there was a contract between the fifth member and themselves under which he could make payments in arrears. They said the trial judge should have taken into account that his case advanced at trial was different from that pleaded and that the trial judge had said he regarded some of the fifth member's evidence as being unclear to the point of being “exasperating”.

However, the three Supreme Court judges reserved judgement, leaving the issue undecided.

Lotto syndicates are by their friendly nature generally relaxed and informal, perhaps not thinking through the ramifications of a big win and the influence this can have on the attitudes of the members. To avoid messy - and expensive - litigation it is perhaps safer to have every member understand exactly what the conditions for membership and prize sharing are, clearly documenting same as an agreement between partners.