Scottish Building Society (SBS) has successfully defended a £1 million action in the Court of Session for breach of contract over a failed soccer savings scheme.
However, in his judgment, Lord Hodge said the society's chief executive Gerry Kay had failed to establish he had been misled before agreeing to hand over a £250,000 commission payment to the scheme's promoters in 2010.
The mutual society, which made a £931,000 profit last year, had been threatened with a £1m bill after terminating the five-year contract after one year, when the scheme attracted just £440,000 of savers' funds against a target of £5m.
The judgment also reveals lawyers acting for Celtic believed the scheme had a fatal flaw in its unauthorised use of supporters' data, a view which was not shared at the time by lawyers for Dunfermline Athletic and Rangers, but which has now been endorsed by the judge.
The original savings scheme was set up in 2005 as Soccer Savings Limited (SSL) by financial consultants Johnston, Gray and Wardrop, whose managing director was Hamilton Academical co-owner Leslie Gray, in association with Dunfermline Building Society.
At its peak in 2008 the scheme had 22 clubs signed up to the "affinity" scheme, where each club had its own branded account within the society, with almost 16,000 fans holding £38m on deposit.
By March 2010, the Dunfermline had crashed to be swallowed by Nationwide, amid financial recession and plunging savings rates, and the soccer deposits had dwindled to £22m.
The creators of SSL, which had earned 1% commission on all balances, started a new company SSSL and approached Scottish Building Society.
After a meeting with SSSL in Glasgow's Urban Brasserie, Mr Kay agreed to pay the promoters a £250,000 annual commission.
Lord Hodge says: "There is no substance in SBS's allegation SSSL induced the contract by representing that it would achieve a sale target of £10m by December 2011."
He says it was Mr Kay who set the target of £5m by January 2011 after he had "satisfied himself the proposal had sufficient potential to justify the risk of his agreeing to a fixed sum annual commission".
It was clear that the venture "failed very badly", says the judge, but the promoters' statements had only been "aspirations".
When SSSL tried to revive the flagging venture by asking Dunfermline Athletic, Rangers and Celtic to write to their supporter savers, encouraging them to move their money from the old scheme at Nationwide paying 0.1% to the new scheme with the Scottish paying 1%, Celtic refused because its lawyers warned of potential data protection issues.
Soon afterwards, Nationwide claimed breach of data protection in the use of saver details.
The judge found there was a material breach of the contract, because "SSSL had no authority from the data subjects to use that data to promote the football saver scheme and SBS's products".
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