MISSION STATEMENT

SOCIF is a body of racing industry and consumer stakeholders, whose mission is to create Best Practice Recommendations that comply with the principles contained within consumer protection and business legislation, helping racehorse syndicate and club businesses achieve high standards of service provision to consumers. SOCIF works with Trading Standards and aims to improve integrity, confidence and growth in the shared ownership and clubs' industry.

INTRODUCTION

Consumer confidence in how syndicates and clubs are run and regulated, is a key strategy for industry growth.

The shared ownership and clubs' industry is governed by public law, including, but not limited to, the Provision of Services Regulations 2009 and the Digital Markets, Competition and consumers Act 2024.

The BHA is currently acting as an industry Regulator and those entities offering the sale of ownership shares in racehorses and memberships in racing clubs, are acting as Service Providers. Both the Regulators and Service Providers are required by law to help protect consumer and fair trader interests. However, one of the current Regulators, the British Horseracing Authority (a non-statutory private business) has declared that they are not a 'competent authority' pursuant to the Provision of Services Regulations 2009 and as such:-

BHA text:-
"The BHA is not concerned with the regulation of any services provided by clubs or syndicates. The BHA does not mandate, supervise, or regulate how any horse owner provides any service to another person."

"Insofar as any such service activities are provided by clubs or syndicates, they are a matter entirely beyond the BHA's governance and are instead regulated by common law or statute."

Given that the BHA clearly state that they do not regulate syndicate and club service provision, a competent independent body will be required to license, mandate, supervise, and regulate syndicates and clubs pursuant to common law or statute.

SOCIF has produced a set of best practice recommendations (a work in progress) which should give a new regulatory body a running start. These recommendations can be viewed below.

Consumers and industry representatives are encouraged to contribute to the SOCIF work (email: secretary@socif.co.uk) Recommendations are submitted to government departments such as Trading Standards to help verify the legality and fairness of relevant matters, prior to inclusion.

The fundamental difference between a syndicate and a racing club is that a syndicate business-to-consumer (B2C) offer involves shared ownership of a racehorse, whereas a B2C racing club membership offer does not involve shared racehorse ownership - it is imperative that consumers are made aware of the difference, to enable an informed purchasing decision to be made.

SOCIF BEST PRACTICE RECOMMENDATIONS

(A work in progress)

INTERPRETATIONS

B2B - business to business.

B2C - business to consumer.

Beneficial owner - a person or entity benefiting from the entertainment and, where stipulated, any net prize money associated with the asset (the racehorse) which is owned by another party, but does not become the legal owner, part owner, or entitled to the sale proceeds of the racehorse.

BHA - British Horseracing Authority - a non-statutory commercial business trading as British Horseracing Authority Ltd, a private company limited by guarantee without share capital (company no. 02813358).

BHA Syndicator and Racing Club Licensing - from 1st January 2026 the BHA will not allow any syndicate or racing club entity to apply for authorisation to race a specific racehorse to run at a racecourse unless the syndicator or the racing club manager holds a Syndicator/Club Manager licence. Note: the BHA exclude services provided by syndicators and racing club managers to consumers and therefore cannot be considered a form of syndicate or club accreditation.

CIS - Collective Investment Scheme.

CMA - Competition and Markets Authority.

Competent Authority - a body or authority pursuant to the Provision of Services Regulations 2026, having supervisory or regulatory functions in the United Kingdom in relation to service activities. Note: SOCIF and others believe that the BHA are required to comply.

Consumer - an individual (a syndicatee for example) who, in relation to a commercial practice, is acting for purposes which are outside of their business.

DBT - The Department for Business and Trade, formerly named "BEIS" (Business, Energy and Industrial Strategy).

DMCCA - Digital Markets, Competition and Consumers Act 2024. Bodies such as the BHA, GBR, and syndicators must be compliant.

Durable medium - Any instrument or format that allows a consumer, client or business to store information addressed personally to them and reproduce it unchanged.

FCA - Financial Conduct Authority.

Financial liability - money the syndicator is legally obligated to pay consumers and suppliers such as racehorse trainers.

Fiscal liability - financial and other direct and indirect liabilities to government departments and public bodies.

GBR - Great British Racing, a subsidiary undertaking of the BHA.

HBLB - Horserace Betting Levy Board.

HMRC - His Majesty's Revenue & Customs. As well as collecting VAT payments from syndicate and club businesses, they refund syndicate and club members VAT payments as part of a valuable statutory concession to help further the promotion of British horseracing.

Informed Purchasing Decision - this is not involving just good advice for consumers - it is the core concept that the law is built to protect.

IP - 'intellectual property'. For example, the associated rights belonging to a syndicate /club entity, including copyright, design, patents and trademarks.

ITP - Invitation to Purchase. Any communication that gives product characteristics and price, allowing a consumer to make a purchase decision.

Leasing - an arrangement where an owner (the lessor) allows another party (the lessee) to use an asset, such as a racehorse for example, for a fixed period in exchange for regular payments. (See paragraph 12).

Licensee - a licensee is a person, business or other entity, given permission by the licensor (the BHA for example) to use an asset or property.

Licensor - a person or organisation with a legal right to give another party official permission of use of an asset. For example, the BHA act as a licensor governing syndicates and clubs, however, in this case, critically, such governance does not include service provision to consumers.

ORRPI - Overriding Reasons Relating to the Public Interest. A key aspect of POSRs.

Participant Services - the name used by the BHA for its department administering shared racehorse ownership and racing clubs but neither this department nor any other is concerned with the regulation, mandating and supervision of services provided by syndicators and racing club operators to consumers.

Pinhooking - the purchase of a foal or yearling with a view to reselling at a profit. (See paragraph 5.2).

POSR - Provision of Services Regulations 2026 - an updating of the 2009 Regulations. One object is to create a highly competitive marketplace that benefits the consumer.

Racehorse - a thoroughbred horse, bred and trained for horseracing.

Racing Club - an entertainment associated with racehorses, where the Members acquire no ownership or beneficial ownership rights to the racehorse but may acquire certain benefits such as the sharing of race prize money. Pursuant to the DMCCA, consumers need to establish the critical difference between a racing club and a syndicate before making an informed purchasing decision.

Racing Club Manager - a BHA term describing either a business ownership entity with fisca l and financial liabilities and/or an employee of the entity having no fiscal or financial liabilities appointed to manage the day-to-day operation of the club. SOCIF hopes that the BHA will correct this ambiguity with a description something like 'Racing Club Operator'.

Racing Club Operator - a commercial or non-commercial entity acting under the Rules of Racing and holding exclusive financial and legal liability to both consumers and suppliers.

Rules of Racing - the set of rules designed by racing's participants to help protect integrity within all aspects of British horseracing and currently administered and managed by the BHA.

Service Provider - a person or entity (such as a syndicator or racing club operator) who provides, or offers to provide, a service to consumers.

Subsidiary undertaking - a business entity controlled by another organisation, also known as a parent undertaking, under UK company law.

Syndicate - a group of people sharing resources, costs and risks. For example, racehorse syndication is shared ownership divided into defined equal percentage shares, (the product of the Syndicator's offer to consumers).

Syndicate manager - means either the Syndicator or a person(s) without fiscal liability, appointed/employed by the Syndicator to manage the day-to-day operation of the syndicate.

Syndicatee - a custom word describing the everyday consumer who purchases a share in a racehorse syndicate.

Syndicator - an individual or entity with financial liability to consumers and businesses, whilst engaged in the forming, promoting, managing, and running of a shared racehorse ownership scheme, whether or not for profit.

T & C - terms and conditions.

Thoroughbred - a high-quality breed of horse developed for racing.

VAT - Value Added Tax. Note: all syndicate and racing club entities with an actual or expected annual taxable turnover exceeding £90,000 (1st October 2026 figure) are required by public law to account for VAT to HMRC.

Weatherbys - a UK conglomerate whose wide range of activities include the administration of British horseracing on behalf of the BHA.

The BEST PRACTICE RECOMMENDATIONS, based on public law and where applicable, the Rules of Racing:-

REGISTRATION CATEGORIES - There are currently five BHA racehorse ownership and racing club registration categories.
1. Sole ownership - For people who wish to own a horse outright.
2. Company - For organisations wishing to own a horse under the name of a company or business.
3. Partnership - For two or more registered owners who wish to own a horse together.
  - Partnerships are likely to comprise family or friends and allow owners to jointly share in the responsibilities and liabilities of racehorse ownership.
  - A partnership is a private racehorse ownership arrangement where the partners assume legal responsibility for the horse and for all payments and other associated obligations under the Rules of Racing (for example, the payment of training fees). If one or more partners or their agents, advertise/offer the shared ownership arrangement to consumers, the arrangement becomes a syndicate and should be re-registered as such with the BHA.
4. Syndicate - a form of shared ownership where the syndicatee becomes a part owner of the racehorse(s) and the syndicator receives remuneration for their role and/or the method of attracting participation in the entity includes invitations to the public.
  - A 'syndicate' is the division of the ownership of a racehorse(s), with defined percentage shares amounting to 100% of the whole.
  - The advance public disclosure of the percentage share in the ownership of a racehorse is fundamental to the concept of the sale of shared racehorse ownership. Where the share percentage is not disclosed to consumers prior to purchase, the offer cannot be described as shared or syndicated ownership and instead constitutes membership of a racing club.
  - The BHA only register/authorise entities in one category. It therefore follows, for example, that an entity cannot be a syndicate and a partnership. Therefore, if a syndicator wishes to allow partners to part-own a syndicated racehorse, those partners must become part of the syndicate and allocated the relevant percentage of shares. An example could be 'XYZ Syndicates & Partner' registered racehorse ownership entity with the BHA. In such a case, to comply with the DMCCA and in the interests of transparency and consumer protection, the partner(s) racehorse ownership percentage must be included in the 100% figure. For example, a partner may own 40% of the horse and the syndicator may own 60% of the horse. The partner automatically becomes a member of the syndicate. The 40% has already been allocated and therefore the syndicator will only be able to sell 60% of the horse. Consumers would not be able to make an informed purchasing decision if, the full facts are not declared, for example, if it was not properly declared that a partner was paying less than the other syndicate members for an equal percentage.
  - A 'microshare' is an unofficial term that applies to a small ownership share in a syndicated racehorse. For example; a syndicate where shares are divided into 1000 equal units, each share would represent 0.1% of the whole and is referred to by some as a 'microshare'. The term cannot be applied to the sale of memberships in a racing club.
  - The same racehorse cannot be the subject of more than one registered syndicate.
  - Even in the case of, for example, a pub landlord organising a racehorse syndicate amongst the customers, or a small social club activity, the invitation to participate in the syndicate, is bound to contain; an offer to treat, a contract containing terms and conditions, engagement of the services of a professional racehorse trainer, an agreement to be bound by the Rules of Racing, responsibility for VAT registration and VAT recovery (where applicable), obligatory registration under the Data Protection Act, responsibility for the collecting and banking of often substantial sums of money, distribution of race prize money and any other income, compliance with FCA collective investment schemes (where applicable) - these factors alone appear to constitute a “venture in the nature of trade” and therefore create a strong argument that all syndicators should be equally treated by a competent authority, regardless of size. A small syndicate entity could potentially be run by persons with limited knowledge of the intricacies/requirements of shared ownership arrangements. Note; SOCIF recommends that the BHA treat all syndicates equally regardless of how many consumers are participating.
  - People joining a BHA registered partnership, as opposed to a BHA registered syndicate, may not be afforded the same level of protection as members of a syndicate, given that partnership entities are not obliged to comply with syndicate rules.
5. Racing Club - An entertainment primarily based on the following of one or more racehorses and where the members of the club do not own any part of the horse. Note: the racing club operator owns and runs the club and is normally the registered owner of the horse(s).
  - BHA Regulation update (April 2022) -
    "BHA defines a racing club as an entertainment associated with racehorses, where the members acquire no ownership rights to, or lease an interest in, any racehorses. Considering this, promotion must not portray racing club membership as bestowing ownership, part-ownership or leased ownership on any individual - use of the words 'owner' or 'ownership' should be avoided.
    Racing clubs should be promoted based on the benefits afforded to members and what their subscription fee grants, such as regular updates from the trainer, days at the yard, the chance to watch the club's horse(s) in action as well as potentially receiving a split of any prize-money won.
    It is important to remember that even if prize-money won by the racing club's horse(s) may be shared amongst members, the sale of a membership should not be described as purchasing a 'share in a horse'. The term 'share' implies the member is securing ownership of, or a legal leasehold interest in, a racehorse and should, therefore, not be used when promoting a racing club.
    With regard to syndicates, the BHA defines them as a form of shared ownership where the syndicate members own, or lease, an interest in racehorses. As such, the member is purchasing a share in a horse, and any promotion should be aligned with that." SOCIF note; see section 12 (leasing) for clarification.
  - At the sole discretion of the racing club operator, members acquire certain benefits such as (a) the sharing of race prize money and (b) paddock places at racecourses, determined by a random draw and (c) stable visits.
  - Although a 'Racing Club' is defined by the BHA as an 'ownership entity', this refers to the status of the racing club operator, not the racing club members.
  - A racing club code and a syndicate code sit separately within the BHA codes of conduct; however, syndicates and clubs do not sit separately within the relevant BHA Licensing scheme. Note: SOCIF is asking the BHA to consider creating two distinct and meaningful licences that will help consumers to readily establish the critical difference between a racing club offer and a syndicate offer.
  - Where a racing club chooses to divide income such as race prize money amongst the members, any commission or sum deductible from such income, must be unambiguously stated within the terms and conditions.
  - Race prize money shall normally refer to the net sum received.
TERMS AND CONDITIONS and INVITATIONS TO PURCHASE
1. Persons forming a shared racehorse ownership arrangement, or forming a racing club, are required to produce a set of terms and conditions and make them available to potential participants in a durable medium, prior to conclusion of the consumer's agreement to make a purchase.
  - persons' means an individual, a business, or any legal entity.
  - 'durable medium' - The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013: “durable medium” means paper or email, or any other medium that—
    (a)allows information to be addressed personally to the recipient,
    (b) enables the recipient to store the information in a way accessible for future reference for a period that is long enough for the purposes of the information, and
    (c)allows the unchanged reproduction of the information stored.
  - The BHA current requirement states that the syndicator must provide the consumer with a written agreement/contract (terms and conditions) in a durable format at the point the consumer joins (has paid for) a share in a racehorse OR joins (has paid for) a racing club membership. This is overridden by public law (DMCCA), which requires such information to be provided to the consumer PRIOR to making a purchasing decision.
  - Associated Benefits - where an entity offers ownership shares in a racehorse or the membership of a racing club to consumers as part of an associated or third-party transaction, on a free of charge basis or otherwise, the associated terms and conditions are required to comply with DMCCA.
  - As well as the DMCCA, the Consumer Rights Act 2015 requires B2C terms and conditions to be transparent. T&C's should be expressed in plain and intelligible language and if in writing, be legible.
  - Small print within terms and conditions must not contradict headline statements in consumer offers and cannot be used to hide/dilute the important/critical elements of the consumer offer. Small print must not contradict the large print.
  - Regulations require a Service Provider to make it easy for consumers to read the important elements within terms and conditions and highlight anything that could come as a surprise or that may have a significant impact on them.
  - The DMCCA elevates the omission of material information from an invitation to purchase (ITP) into a standalone, strict liability category of unfair practice. Regulatory bodies do not need to prove that an omission changed the consumer's economic behaviour. If the CMA or Trading Standards find a business guilty of a misleading omission, they no longer have to rely solely on the courts. The CMA has direct enforcement powers to issue notices and levy severe penalties; up to 10% of turnover or £300,000 (whichever is higher).
  - Where a business to consumer (B2C) offer is portrayed on a website-
    1. the full terms and conditions shall be prominently displayed, without a requirement for a consumer; to
    2. refer to another website; or
    3. take secondary action such as having to register an interest prior to obtaining the B2C terms and conditions; or
    4. make a phone call or any other action to obtain details of the full terms and conditions.
  - B2C offers include 'for profit' or 'not for profit' and 'charitable' schemes.
  - Where the BHA allow a syndicator to change the established BHA authorisation of a syndicate entity to a racing club or partnership, this is likely to fundamentally change the status of the original syndicate offer/agreement, therefore, each syndicate member must be immediately made aware of the fundamental change of status of the contract and offered an opportunity to cancel the original agreement and obtain a prorata refund or be offered the opportunity to enter into a new agreement under revised terms and conditions clearly specifying the applicable legal and BHA obligations.
VAT and PRICE TRANSPARENCY
1. Because the price of a syndicated share includes the capital value of the racehorse, the sum paid by the syndicator must be specified in the offer
  (a) the price paid at public auction or private transaction (specifying inclusive, exclusive, or not subject to VAT) for the horse(s) must be declared in B2C offers; together with
  (b) all associated horse purchase costs included within the retail price of a share.
  - Where the capital value differs from the sum paid by the syndicator, the justification for a higher or lower sum must be specified.
  - a Regulator may request documentary pricing proof, for example, an invoice for a sum charged to the syndicator for the racehorse or an independent valuation from a bloodstock agent.
2. The price of a syndicated share in the ownership of a racehorse must be specified in advertisements, websites or any medium, and must be the full price payable, regardless of the VAT status (plus VAT, or inclusive of VAT, or not subject to VAT).
  - The CMA have strict price transparency rules (CMA209) to help prevent unscrupulous traders from hiding the financial architecture of the product. For example, a syndicator cannot claim that the price is VAT free or not subject to VAT, when the syndicator is a VAT registered entity.
  - Quoted consumer prices must include all non-optional taxes. If a business absorbs VAT internally, they cannot misrepresent the underlying asset as "VAT exempt" or "VAT free".
  - Implying that a taxable transaction is structurally free of VAT ignores the reality that the business is quietly paying HMRC a tax cut out of the consumer's total payment, contravening Section 230 of the DMCCA.
3. The syndicator must display their relevant VAT registration number prominently on the consumer facing website or other durable mediums.
4. In 1993 the racing industry negotiated a concession scheme with HMRC, allowing syndicate consumers to reclaim their racing associated VAT payments.
  - It is the Syndicator's role to apply to HMRC for refunds on the syndicatee's behalf.
  - Weatherbys issue a D2 Application Form to enable this function to be performed by the syndicator.
  - Weatherbys act as agent for the BHA and as part of their D2 Authorisation process they will need to ensure that the entity is a syndicate and not a racing club (meaning that they will need to scrutinise the terms and conditions of the entity to establish that the consumer offer does not have the characteristics of a racing club). Once Weatherbys are satisfied that the application meets the requirements of the VAT concession scheme, they will officially authorise it and pass the application back to the Syndicator, who will then be able to make a refund application to HMRC on behalf of the syndicatees.
  - The VAT refund concession applies to the consumer members of syndicates and partnerships but NOT the members of racing clubs.
  - The consumer VAT refund concession DOES NOT APPLY to syndicate and racing club businesses trading activities because the businesses reclaim their VAT in accordance with normal VAT rules.
  - The consumer VAT concession is of vital importance to the horseracing industry, hence why it is imperative that syndicators and others in the racing industry rigidly adhere to the associated Regulations and governing rules.
  - Where the Syndicator obtains a VAT refund on behalf of the syndicate member, the whole of that sum must be passed to the syndicate member and not retained in whole or part by the syndicator, for example, to offset the syndicator's expenses. This rule helps protect consumers from non-transparent pricing structures.
CONSUMER OFFERS INVOLVING CHARITIES
1. Working with commercial participators (for example syndicates and racing clubs) can benefit charitable institutions, offering opportunities to access new funding sources and increase public awareness. However, there are legal requirements with which the charitable institution and the commercial participator need to comply with, particularly where the participator specifies in any type of promotion that a fixed sum or otherwise, of the sale price of a racehorse share or racing club membership (or whatever) will be donated to a named charity.
  - Where a charity chooses to work with a racehorse syndicate or racing club business, the charity is required to comply with Section 7 of the Fundraising Regulator's Code of Fundraising Practice and The Charitable Institutions (Fund-Raising) Regulations 1994, and The Charities Act 1992, Part II.
  - In a nutshell, the Regulations require a charitable institution to carry out a basic due diligence examination of the commercial participator's public offer, thereby helping to protect consumers from being subjected to unfair trading practices and helping protect the charity from inadvertently becoming involved with a business that is not complying with the basic requirements of relevant legislation, including but not limited to, the DMCCA.
  - A charitable institution must have a written agreement with any commercial participator they work with. These agreements are commonly referred to as Commercial Participation Agreements (CPAs) and must be signed by the charitable institution and the commercial participator. A CPA must be in place before a commercial participator begins any promotion which makes representations that contributions will be given to a charitable institution."
COLLECTIVE INVESTMENT SCHEMES
1. Where funds are collected from consumers by a syndicator for the purpose of racehorse syndication, the FCA class the arrangement as a collective investment scheme (CIS). However, where the activity is described as, and has the characteristics of, an "entertainment" as opposed to an "investment", the FCA class this as an exempt activity; an Unregulated Collective Investment Scheme (UCIS).
  - Syndicators and racing club managers must not state or imply that their consumer offers are investment opportunities.
2. Pinhooking is the term used for the purchase of a foal or yearling with a view to reselling at a profit.
  - Where syndicators publicly offer consumers an opportunity to join a pinhooking syndicate managed on a day-to-day basis by the syndicator, this satisfies the definition of a CIS under Section 235 of the FSMA. Unapproved promotions risk infringing Section 21 of FSMA, meaning that FCA unregistered syndicators risk criminal prosecution.
USE OF LOGOS
1. Logos of organisations cannot be used on B2C websites or advertisements to give the impression that they offer some form of consumer protection when they do not.
  - There is currently no known organisation with a recognised code of conduct that fully protects syndicate or racing club member payments.
SYNDICATE and RACING CLUB NAMES
1. A name cannot be used to imply that the consumer offer is something that it is not. For example, where the offer has the characteristics of a racing club, a name such as 'Hythe Racing Owners Club' could not be used, as the average consumer may believe that the offer includes some form of racehorse ownership.
  - Where the consumer offer involves both a racing club and a syndicate, the two entities must be clearly distinguishable by name with separate terms and conditions. For example; 'Hythe Racing Club' and 'Hythe Racing Syndicates'.
RACEHORSE FIT FOR PURPOSE
1. Syndicators should take steps at the point of acquisition of the horse, essentially obtaining a veterinary report to satisfy themselves that a horse is in a fit enough condition to withstand training at some time in the future.
  - By omitting to bring a consumer's attention to known material information, for example, that a horse has an injury preventing it from racing again, a syndicator may be committing a criminal offence.
HORSE WELFARE
1. Syndicators and racing club operators have a legal obligation to abide by horse welfare obligations including but not limited to the Animal Welfare Act.
  - While syndicators and racing club managers delegate daily physical care to a licensed racehorse trainer or other professional entity, they retain a legal duty to take reasonable care to ensure the keeper they choose is competent.
  - Stating or implying competent horse welfare in consumer offers as a marketing ploy when insufficient precautions are being taken, breaches DMCCA.
  - When called upon, syndicators and racing club managers must allow professional welfare organisations access to the horse(s).
SHARE REGISTERS
1. A Syndicator is required to maintain a 'share register' listing the names of the syndicate members against the relevant share numbers allocated to those persons. For example, in a 50-share syndicate, each share number would be between 1 and 50, therefore if Mr. John Smith purchased share number 24, it would be recorded as such in the 'share register' and at the point of purchase, the syndicate member notified of that unique number in the relevant named racehorse.
  - Each 'share register' must be open for inspection by a governing authority but on the understanding that the governing authority does not capture the data for any purpose that could potentially be accessed or retained for commercial activity.
  - The Syndicator will allow a governing authority to contact randomly selected syndicate members, up to four times a year, for the purpose of establishing/monitoring the validity of the relevant shares. Selections limited to 10% where there are up 50 syndicate members and up to 10 in total where there are more than 50, but still reserving the right to contact specific persons where there is proven good cause.
THIRD PARTY INSURANCE
1. The Syndicator must have third party insurance in place for the full duration of the syndicate period, to cover the respective liabilities incurred by syndicate members under the Animals Act.
LEASING
1. Where a lessor (the legal owner of the racehorse) leases a racehorse to a lessee (the person or organisation that acquires rights to use and race the racehorse under a lease) without transferring any beneficial ownership interest or equity in the racehorse, the arrangement should not be marketed or described as 'shared racehorse ownership', or “syndicated ownership” or by any other terminology which may mislead a consumer to believe they are acquiring an ownership or part ownership share in the racehorse.
2. - Where the lessor permits, the lessee may offer racing-related benefits, experiences and privileges associated with the leased racehorse to members of a racing club. However, membership of such a club should not be described or presented as constituting racehorse ownership, syndicated ownership, ownership shares, or any equivalent arrangement where consumers do not acquire an ownership interest in the horse.
  - The fact that the BHA may recognise a lessee as an owner for the purposes of the Rules of Racing does not, of itself, justify the use of the same terminology in marketing where such terminology may mislead consumers as to the nature of the rights being acquired. Consumer protection legislation, including the Digital Markets, Competition and Consumers Act 2024, operates independently of the Rules of Racing and associated BHA definitions. SOCIF hopes that the BHA will soon introduce greater clarity to the Rules of Racing.

GOVERNING LAWS

(Regulatory Information provided by Trading Standards) SOON TO BE UPDATED

Whilst the Rules of Racing play a role in determining certain integrity matters in business-to-consumer (B2C) offers, public law requires fairness and transparency in B2C offers and are subject to Trading Standards and/or Competition and Markets Authority (CMA) enforcement action.

Syndicators and racing club operators are required by law to portray offers to consumers, in a fair, honest, and transparent manner.

There are three relevant elements of consumer protection legislation, the Consumer Protection from Unfair Trading Regulations 2008, the Consumer Rights Act 2015 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

Consumer Protection from Unfair Trading Regulations 2008

The Consumer Protection from Unfair Trading Regulations 2008 (henceforth the CPRs) address unfair commercial practices by traders when dealing with consumers, creating associated criminal offences.

A consumer is defined as "...an individual acting for purposes that are wholly or mainly outside that individual's business."

A trader is "...a person acting for purposes relating to that person's business, whether acting personally or through another person acting in the trader's name or on the trader's behalf and [except in relation to consumer's rights to redress] includes a person acting in the name of or on behalf of a trader."

A commercial practice is defined as "...any act, omission, course of conduct, representation or commercial communication (including advertising and marketing) by a trader, which is directly connected with the promotion, sale or supply of a product to or from consumers, whether occurring before, during or after a commercial transaction (if any) in relation to a product."

A product includes goods, a service, digital content, immovable property, rights or obligations and a trader who demands payment from a consumer in full or partial settlement of their liabilities, or purported liabilities, is considered to be offering to supply a product to the consumer.

Goods means any tangible moveable items, with certain proviso for water, gas and electricity.

Consumer Rights Act 2015

The Consumer Rights Act 2015 (henceforth the CRA) provides consumers with certain statutory rights when being supplied with goods and/or services by traders. It also prohibits the use of unfair terms in consumer contracts (those between consumers and traders with the exception of contracts of employment or apprenticeship).

Under the CRA a trader claiming that an individual was not a consumer must prove it.

The CRA defines a consumer as "...an individual acting for purposes that are wholly or mainly outside that individual's trade, business, craft or profession." However, for many of the CRA's provisions a person is not a consumer in relation to a sales contract if the goods are second-hand goods sold at public auction, provided individuals have the opportunity of attending the sale in person.

A trader is defined as "...a person acting for purposes relating to that person's trade, business, craft or profession, whether acting personally or through another person acting in the trader's name or on the trader's behalf."

Goods has the same definition as in the CPRs.

Generally, a trader cannot rely on a term that attempts to restrict a consumer's statutory rights in relation to either goods or services.

Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (henceforth ICAC) apply to most contracts between consumers and traders and introduce rules around the provision of information to consumers as well as a 14 day cooling off period during which a consumer can choose to cancel certain contracts provided it were agreed away from business premises or via a distance method ( such as online or over the phone).

ICAC differentiates between sales contracts and service contracts.

A sales contract "...means a contract under which a trader transfers or agrees to transfer the ownership of goods to a consumer and the consumer pays or agrees to pay the price, including any contract that has both goods and services as its object."

A service contract "...means a contract, other than a sales contract, under which a trader supplies or agrees to supply a service to a consumer and the consumer agrees to pay the price."

Definitions of consumer and trader are identical to those in the CRA.

GENERAL NOTES

Once the fine detail of SOCIF 'best practice recommendations' is complete, a shortened version will be produced to complement the main body of text.

In relation to SOCIF's Best Practice Recommendations the BHA say, "ultimately, what SOCIF proposes to include on its website is a decision for SOCIF itself and is not something that the BHA supports or endorses."

Given that SOCIF is working hard to help consumers and traders in the complex area of shared racehorse ownership and racing club memberships, the BHA statement has strengthened SOCIF's resolve to work hard to help protect consumer and trader interests.

SOCIF takes this opportunity to thank Wiltshire Trading Standards for their continued help with the Best Practice Recommendations.

The content of the SOCIF website does not constitute legal advice. Participants are advised to seek their own legal advice before entering contractual arrangements.

CONTACT

secretary@socif.co.uk