Burnley/Everton dispute

[Tricky Trevor]

In court today.

IMG_4815.jpeg (282.85 KiB) Viewed 6744 times

[mybloodisclaret]

Anyone have any updates on this? Weren't we supposed to be after about £40 mill in damages?

[NewClaret]

Anyone have any updates on this? Weren't we supposed to be after about £40 mill in damages?

The claim will be for a lot more than £40m. £100-£150m would be my guess.

We’ll claim for every conceivable cost associated with relegation, from the loss of TV money to the fees associated with squad turnover, we’ll probably argue players values decreased and there will be some hefty interest charges in there too to be ‘made whole’.

[bobinho]

Everton can go to the wall for me…

[NewClaret]

Anyone have any updates on this? Weren't we supposed to be after about £40 mill in damages?

Sorry, I only answered part of your question.

In answer to your other part, the update above is the update. There’s been a hearing today. This will be a pre-hearing hearing that sets the date and agrees the list of issues to be heard, etc. They suggest the full hearing is likely to happen in July. My bet is that it’ll settle some time very shortly before or even during the hearing.

[mybloodisclaret]

Sorry, I only answered part of your question.

In answer to your other part, the update above is the update. There’s been a hearing today. This will be a pre-hearing hearing that sets the date and agrees the list of issues to be heard, etc. They suggest the full hearing is likely to happen in July. My bet is that it’ll settle some time very shortly before or even during the hearing.

Thanks NewClaret. Would be absolutely amazing if we got anywhere near £100 mill. Wow, would give us a decent chance of complying with PSR and having a good tilt at the Prem next season.

[NewClaret]

Thanks NewClaret. Would be absolutely amazing if we got anywhere near £100 mill. Wow, would give us a decent chance of complying with PSR and having a good tilt at the Prem next season.

I don’t think we’ll get anywhere near what we claim for. It’s complete guesswork for us because this is all done behind closed doors but I’d say your £40m may be closer to the mark in terms of what is actually paid.

It’s complex, but there’s something in English law callex “loss of a chance” which in English might mean we only have to prove that they’re was a “chance” their PSR breaches caused our relegation. The hearing can then determine what that chance was, so say 40% of a £100m claim would be £40m.

But I think it’ll settle as Everton won’t want to run the risk our entire claim is successful, we won’t want to risk walking away with nothing if it fails, and I think the Premier League will want it sorting without any precedents being set!

[Tricky Trevor]

As usual in these cases if they make an offer that we refuse and the judges settlement figure is less than their offer we stand costs. I’m not sure if that is ours or both but somebody on here will. This rule has bankrupted many individuals in the past.

[NewClaret]

As usual in these cases if they make an offer that we refuse and the judges settlement figure is less than their offer we stand costs. I’m not sure if that is ours or both but somebody on here will. This rule has bankrupted many individuals in the past.

This isn’t a court, it’s a private hearing, so I’m pretty sure they won’t have powers to rule on costs unless the premier league rules cover this.

I’d be 99% sure both parties will cover their own costs regardless of the outcome.

[ecc]

£40m would come in handy.

[wilks_bfc]

Can a clause in the settlement include “will not bid for any Burnley players for next 5yrs”

[morninbob]

Let's not forget how much west ham payed Sheffield utd years ago.

[Fretters]

Let's not forget how much west ham payed Sheffield utd years ago.

How much was that?

[Inchy]

How much was that?

£20m according to the guardian

If we have a case you suspect it would be a bit more than that given the increase in premier league payments

[Hibsclaret]

20m

[Garnerssoap]

I don’t think we’ll get anywhere near what we claim for. It’s complete guesswork for us because this is all done behind closed doors but I’d say your £40m may be closer to the mark in terms of what is actually paid.

It’s complex, but there’s something in English law callex “loss of a chance” which in English might mean we only have to prove that they’re was a “chance” their PSR breaches caused our relegation. The hearing can then determine what that chance was, so say 40% of a £100m claim would be £40m.

But I think it’ll settle as Everton won’t want to run the risk our entire claim is successful, we won’t want to risk walking away with nothing if it fails, and I think the Premier League will want it sorting without any precedents being set!

There’s a snail in a ginger beer bottle that says different

[nig1954]

By heck, Donoghue v Stevenso (1932).That takes me back over 50 years to when I was studying Contract Law as part of my Foundation Course towards the ICAEW exams.
Mind you the World’s moved on a lot since then. However, the basic principles still stand.
Took me some time to master Obiter Dicta and Ratio Decidendi. The Good Old Days !

[IanMcL]

£40m would have to be justified, as we received Parachute payments. However, as there is clear loss of a place in the Prem table, that would be known amount. Also, assumption that we would have strengthened and retained our position next season. Difference between parachute and that position.

Destruction of squad and lost value.
World exposure/status greatly diminished. Loss of commercial growth.

Difficulty in establishing a team to compete, in rhe Prem, owing to the original squad decimated and ongoing financial rules.

That big loan, which had to be paid up, via new loan at higher interest. Other loans too.

Halt to progress in ground development, which Everton obviously gained from retaining their status.

Probably a million other things.

[NewClaret]

£40m would have to be justified, as we received Parachute payments. However, as there is clear loss of a place in the Prem table, that would be known amount. Also, assumption that we would have strengthened and retained our position next season. Difference between parachute and that position.

Destruction of squad and lost value.
World exposure/status greatly diminished. Loss of commercial growth.

Difficulty in establishing a team to compete, in rhe Prem, owing to the original squad decimated and ongoing financial rules.

That big loan, which had to be paid up, via new loan at higher interest. Other loans too.

Halt to progress in ground development, which Everton obviously gained from retaining their status.

Probably a million other things.

I’ve seen this posted elsewhere, so just picking this up as there seems to be a misconception that parachute payments cover TV money, which is not true. I think the deficit is £60m or so.

But you’re right that we won’t be able to claim for the total loss of TV revenue, just the delta to the parachute payments.

Then every other conceivable cost that resulted from relegation, from agent fees to financing charges will be pumped in. Imagine we’ll claim some costs from the second relegation too, although suspect they’ll be pre difficult to argue.

My view is it’ll settle, but if it doesn’t and we win (I think we stand a good chance because the hearing has already determined we have potential valid claims to compensation- it’d have said we didn’t otherwise), the hearing is going to have many days work dissecting our schedule of loss and deciding which are valid claims and which are not.

[Quickenthetempo]

If the opening post article is right, then Burnley would have to sue the Premier league as they set the rules. Or are we claiming Everton decided which season to take the points loss?
I can't see a court saying legal proceedings should happen far quicker either.
The only other sport I can think where punishment could be straightaway or afterwards is formula 1.
They get 5 second penalties, sometimes served at the pit stop and sometimes after the race.

Has any driver/team took legal action over punishments and what would benefit them?

[Quickenthetempo]

Another scenario thinking out loud.

What, if on Monday our best player elbowed a Sheff Utd player in the 6th minute but the ref didn't see it. Said player scores two goals and we win and get promoted.

After the game the fa charge our player with violent conduct and ban him for 3 games.

Sheff Utd decide it doesn't benefit them him being suspended and the decision cost them the game and Premier league riches.
They take legal action and the court decides Burnley have to play in the prem but have to pay Sheff Utd all TV and prize money.

Stupid isn't it.

[NewClaret]

Another scenario thinking out loud.

What, if on Monday our best player elbowed a Sheff Utd player in the 6th minute but the ref didn't see it. Said player scores two goals and we win and get promoted.

After the game the fa charge our player with violent conduct and ban him for 3 games.

Sheff Utd decide it doesn't benefit them him being suspended and the decision cost them the game and Premier league riches.
They take legal action and the court decides Burnley have to play in the prem but have to pay Sheff Utd all TV and prize money.

Stupid isn't it.

The difference between this scenario is that one is sporting and therefore subjective, one is financial and therefore not. Plus also admitted, as it happens in this case.

I don’t particularly like being involved in these disputes and do have some sympathy for Everton given City and Chelsea seem to be routinely avoiding charges for their obvious financial doping. Plus I’m not sure PSR is in clubs best interests as things stand and, even if it were, has been well implemented by the premier league.

But this is what will happen as long as there are rules and clubs don’t abide by them.

[willsclarets]

I don't really understand this. It's not in Everton's powers to decide if they're deducted points or not? Why is the claim against Everton, and not the powers that enforced the points deduction the following season?

Apologies if I'm completely misunderstanding!

[morninbob]

I don't really understand this. It's not in Everton's powers to decide if they're deducted points or not? Why is the claim against Everton, and not the powers that enforced the points deduction the following season?

Apologies if I'm completely misunderstanding!

The claim is for compensation, not points deduction.

[NewClaret]

I don't really understand this. It's not in Everton's powers to decide if they're deducted points or not? Why is the claim against Everton, and not the powers that enforced the points deduction the following season?

Apologies if I'm completely misunderstanding!

Simplifying this a lot, but imagine it like a car crash.

Car mows someone over causing injury. Police investigate, charge, find guilty, put points on drivers licence for dangerous driving. The victim still has a right to sue the driver for compensation for their injuries in court, which is a separate process and what we are doing now as the “victim”.

The complexity here isn’t helped by the fact that the media miss report what we are claiming for. Forget the points deduction. It’s likely not relevant at all. We are claiming that their PSR breach caused our relegation. That won’t be easy to prove conclusively for a number of reasons (I’ll do a post on our likely arguments at some point, but it’ll all be data-based, I imagine), but we only have to prove there’s a chance it caused our relegation to be awarded a sum of compensation relative to the % chance as determined by the hearing.

Given that chance could be determined high or low, the likelihood is that both parties will want to come to some agreement beforehand.

[willsclarets]

Simplifying this a lot, but imagine it like a car crash.

Car mows someone over causing injury. Police investigate, charge, find guilty, put points on drivers licence for dangerous driving. The victim still has a right to sue the driver for compensation for their injuries in court, which is a separate process and what we are doing now as the “victim”.

The complexity here isn’t helped by the fact that the media miss report what we are claiming for. Forget the points deduction. It’s likely not relevant at all. We are claiming that their PSR breach caused our relegation. That won’t be easy to prove conclusively for a number of reasons (I’ll do a post on our likely arguments at some point, but it’ll all be data-based, I imagine), but we only have to prove there’s a chance it caused our relegation to be awarded a sum of compensation relative to the % chance as determined by the hearing.

Given that chance could be determined high or low, the likelihood is that both parties will want to come to some agreement beforehand.

Gotcha, thanks. As you said in a previous post, could be very problematic if a precedent is set here! Anyway fingers crossed we get something out of it. A new centre forward would be great.

[martin_p]

Gotcha, thanks. As you said in a previous post, could be very problematic if a precedent is set here! Anyway fingers crossed we get something out of it. A new centre forward would be great.

It won’t be problematic if the clubs follow the financial rules and don’t get themselves into this situation in the first place.

[willsclarets]

It won’t be problematic if the clubs follow the financial rules and don’t get themselves into this situation in the first place.

Well, true. But unfortunately I very much doubt it'll be the last failure to comply.

[Chester Perry]

It won’t be problematic if the clubs follow the financial rules and don’t get themselves into this situation in the first place.

Not strictly true

Some clubs - think Manchester City in particular and Leicester have shown that some of those financial rules are either illegal or so poorly structured/worded that they can be avoided by clever legal teams. I believe that more clubs will start challenging the legality of various financial rules and in Manchester City's case they will do so just as a form of punishment to the League and clubs that have encouraged the various actions that have been taken against them. It is telling that Manchester City's huge legal bills are passed on to the owner (as declared in group accounts) as they are actions that he has directed them to take.

the single big problem Everton face, is that they admitted breaching the rules upfront - they could have taken a more aggressive stance and challenged the legality of the rule that saw them breach limits

even if there is a significant win for Burnley, I expect any compensation sum to be paid across multiple seasons (at least 5 and would not be surprised by 7 - 10 years if it is a significant sum. In that scenario It may also be that the club factors the compensation though the number of years would make for a much reduced sum received

[NewClaret]

Not strictly true

Some clubs - think Manchester City in particular and Leicester have shown that some of those financial rules are either illegal or so poorly structured/worded that they can be avoided by clever legal teams. I believe that more clubs will start challenging the legality of various financial rules and in Manchester City's case they will do so just as a form of punishment to the League and clubs that have encouraged the various actions that have been taken against them. It is telling that Manchester City's huge legal bills are passed on to the owner (as declared in group accounts) as they are actions that he has directed them to take.

the single big problem Everton face, is that they admitted breaching the rules upfront - they could have taken a more aggressive stance and challenged the legality of the rule that saw them breach limits

even if there is a significant win for Burnley, I expect any compensation sum to be paid across multiple seasons (at least 5 and would not be surprised by 7 - 10 years if it is a significant sum. In that scenario It may also be that the club factors the compensation though the number of years would make for a much reduced sum received

I agree with all of this post apart from the part in bold.

In a normal compensation claim for losses, the claim is to be “made whole” again. So the schedule of loss detailing the claim will include interest to cover the cost of money from the time of the offence to current date. Inflation might be considered in this, or separately. That means our claim is already likely to include significant interest/inflation charges to cover the period May 2022 to July 2025.

I don’t think there’s any precedent for time to pay in these cases and I think it’s more likely a hearing would expect immediate payment and for Everton to raise debt to pay the compensation, if needed.

If time to pay is provided and agreed upon, interest will be added to ensure the claimant is not disadvantaged and “remains whole”. I’d expect up to 8%. You may be right that in such a scenario the club would look to factor at a higher interest rate, in which case the cost would be the delta of the two interest rates agreed.

Of course all of these nuances of payment terms, etc, etc are just more reasons to get together and settle the dispute while both parties can negotiate and find compromise, before someone rules one way or the other.

To your point about challenging the legality of the rules allowing us to bring the claim, I agree, and expect that’ll be Everton’s #1 defence in this hearing.

[Chester Perry]

I agree with all of this post apart from the part in bold.

In a normal compensation claim for losses, the claim is to be “made whole” again. So the schedule of loss detailing the claim will include interest to cover the cost of money from the time of the offence to current date. Inflation might be considered in this, or separately. That means our claim is already likely to include significant interest/inflation charges to cover the period May 2022 to July 2025.

I don’t think there’s any precedent for time to pay in these cases and I think it’s more likely a hearing would expect immediate payment and for Everton to raise debt to pay the compensation, if needed.

If time to pay is provided and agreed upon, interest will be added to ensure the claimant is not disadvantaged and “remains whole”. I’d expect up to 8%. You may be right that in such a scenario the club would look to factor at a higher interest rate, in which case the cost would be the delta of the two interest rates agreed.

Of course all of these nuances of payment terms, etc, etc are just more reasons to get together and settle the dispute while both parties can negotiate and find compromise, before someone rules one way or the other.

To your point about challenging the legality of the rules allowing us to bring the claim, I agree, and expect that’ll be Everton’s #1 defence in this hearing.

West Ham paid Sheffield United over multiple instalments across 4 years

https://www.independent.co.uk/sport/foo ... 93540.html

[NewClaret]

West Ham paid Sheffield United over multiple instalments across 4 years

https://www.independent.co.uk/sport/foo ... 93540.html

That was a settlement though, so to my point, if they settle they can negotiate over these terms. If a court were awarding it, I can’t see them allowing time to pay or would apply an interest to compensate if they did.

[jos]

Any updates on this please?

[lakedistrictclaret]

By heck, Donoghue v Stevenso (1932).That takes me back over 50 years to when I was studying Contract Law as part of my Foundation Course towards the ICAEW exams.
Mind you the World’s moved on a lot since then. However, the basic principles still stand.
Took me some time to master Obiter Dicta and Ratio Decidendi. The Good Old Days !

Takes me back too.
I think we covered Donoghue v Stevenson in the first week of my first year studying Law at Birmingham University in 1970.

[theduke]

£40m would come in handy.

Which is what we'll get when the sign Esteve

[Bfc]

Hats off to NewClaret and Chester Perry for their informative knowledge on the topic.

[mybloodisclaret]

Hats off to NewClaret and Chester Perry for their informative knowledge on the topic.

Couldn't agree more. Hopefully we get something close to 100 mill to be paid over two years. That would be lovely. Doesn't appear to be likely from reading above but still, would give us a fighting chance.

[Tricky Trevor]

They can hand the check over in August. I fancy us to be first up at Bramley Dock.

[claret wizard]

Even if it is paid over multiple season won’t make much difference in cash flow as we can borrow against it. How we put it into the accounts is probably more pertinent.