And they’re off: when the syndicate ends in the court

To some sports fans, owning a share in a racehorse can be appealing, but racehorse ownership is often the preserve of millionaires, celebrities and even royalty! There are a large number of syndicates giving ordinary people the opportunity to share in the ownership of a horse. Like all sports, there is a downside.

Those buying a share in a horse probably do it for the excitement of watching their horse run and (hopefully) win. They may also get involved to have a share in the winnings and the experience of being an owner at the racecourse.

What could possibly go wrong?

When buying a share of a racehorse, not all prospective owners do proper due diligence to understand what their liabilities are.

Syndicate ownership is tightly regulated, and any company or person publicly advertising a syndicate or being paid to administer the syndicate will require a licence from the British Horseracing Authority.

Some of the costs of a racehorse might include training fees, race entry fees, insurance, transportation, stabling, jockey fees, administration fees and veterinary fees.  There is usually no limitation of liability in a syndicate, and therefore, if vet bills are higher one year, then the syndicate bill might increase.

Similarly, if other costs increase, such as stabling or training, as the owner, you may have some liability in terms of costs.

We are often instructed on disputes between syndicates, and the disputes can range from disputes around payment of unexpected costs to the amount of the winnings each member of the syndicate should receive.

Disputes we see

We often see disputes in horse syndicates, including:

• Professional negligence – when a professional person, such as a vet, accountant or trainer, has failed in the duty of care towards the members of the syndicate and provided negligent advice.
• Misrepresentation – this is when a member or members of the syndicate are given wrong information, which induces them into the syndicate contract. In some circumstances, it may be possible to make a damages claim for the loss.
• Breach of sale of asset agreements: when a horse is sold, in some circumstances, the buyer might not pay, or there may be some other breach of the agreement. There may be a damages claim (financial loss) or the opportunity to ask the court for specific performance (to do what was promised).
• Defective horse box claims – we have represented clients who have been in dispute with the supplier of their horsebox or motorised horsebox.
• Breach of grazing agreement – a grazing agreement is an agreement between the landowner and the person (or company) grazing horses that the grazing party has a licence to use the land. Conversely, landowners need to grant a licence and not a lease because a party grazing under a lease may be granted certain property rights, such as exclusive possession, which may prevent the landowner from accessing their own land.
• Syndicate ownership/partnership disputes – These are disputes between members of the syndicate around the percentage of winnings, cost liability or ultimately the removal of a syndicate member who is acting against the syndicate.
• Supplier disputes – usually contractual disputes with suppliers such as the supplier of the horse feed or specialist equipment for the horse.