High court rules customer who opted from private to intermediate customer status to have been contributorily negligent to his spread betting losses
| DOI | https://doi.org/10.1108/13581980810918440 |
| Published date | 14 November 2008 |
| Pages | 414-420 |
| Date | 14 November 2008 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL COMMENTARY
High court rules customer
who opted from private
to intermediate customer status
to have been contributorily
negligent to his spread
betting losses
Joanna Gray
University of Newcastle upon Tyne, Newcastle upon Tyne, UK
Abstract
Purpose – The article’s aim is to report and comment on the High Court case Spreadex Ltd v. Sekhon.
Design/methodology/approach – The article outlines the facts surrounding the case and
comments on the ruling.
Findings – The High Court rules that a customer who opted from private to intermediate customer
status was contributorily negligent to his spread betting losses.
Originality/value – The article shows that there are many points in this decision where either what
was revealed by the evidence or the Judge’s comments and reasoning will echo beyond the parameters
of the case itself.
Keywords Legal decisions,Betting, Financial services
Paper type Viewpoint
Spreadex Ltd v. Sekhon (High Court: Chancery Division: Mr Justice Morgan).
Date of judgment: May 23, 2008
Facts
The facts in this case were largely agreed between the claimant, Spreadex Ltd, a spread
betting company authorized to conduct investment business by the Financial Services
Authority (FSA) and the defendant who had opened an account with the claimant in
March 2005. IN order to explain the factual background to the agreement and FSA
rules he was called upon to interpret in this decision the judge made reference to a
description given by Lord Justice Rix in the Court of Appeal decision of 2005 in
Spreadex Ltd v. Battu in a factual explanation of the conduct and practical processes of
spread betting transactions:
Spread betting
Spread betting is not so much or not merely a bet, although it can be de-scribed as such, as
a form of contract for differences. It enables a customer to take a position on a market (or an
event) for a very small stake. Thus, if the Dow Jones index is, say, at 10,000, one can “buy” or
“sell” the market at a spread around the index of, for the sake of example, 10 points either
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
JFRC
16,4
414
Journal of Financial Regulation and
Compliance
Vol. 16 No. 4, 2008
pp. 414-420
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980810918440
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