Everton compensation claim

[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.

[WalkdenClaret]

Just read that we are suing Everton for £50m due to loss of income following relegation in 21/22, when Everton were only docked points a year later. Report in paywalled I newspaper but link below.

https://www.givemesport.com/why-burnley ... explainer/

[Down_Rover]

There is already a thread in relation to this

[warksclaret]

Just listened to an expert on Talksport saying we may well have a claim for something, but not the £50m we are claiming for, as our club did well in the Championship the following year with parachute payments/ big crowds/ more games and generally being managed well (including some very good player sales)

I know there is another post on this , but its not in the last day or so, and in comparison to a lot of other threads on here, this one is quite important

[ClaretTony]

There is already a thread in relation to this

Found this one from April and have merged them

[aggi]

This should be a gift version of the I article
https://inews.co.uk/sport/football/burn ... 5koSHChZEU

Nothing really new in there except clarification that it isn't going to court, it's being done through arbitration. Nothing about the actual process though.

[aggi]

A bit more discussion on it here
viewtopic.php?f=2&t=80514&p=2523689

[ClaretTony]

A bit more discussion on it here
viewtopic.php?f=2&t=80514&p=2523689

Thanks aggi - merged it all into that one now

[CrosspoolClarets]

Just listened to an expert on Talksport saying we may well have a claim for something, but not the £50m we are claiming for, as our club did well in the Championship the following year with parachute payments/ big crowds/ more games and generally being managed well (including some very good player sales)

I know there is another post on this , but its not in the last day or so, and in comparison to a lot of other threads on here, this one is quite important

Not sure who this expert was but it sounds like duff commentary to me.

We went down, back up, down again, and now up again. The classic yo yo club. Until the Everton issue we were a solid Premier League outfit for multiple seasons. That affects all kinds of things, which players can be attracted, which loans can be taken out etc. Dyche had a poor season and the owners were fattening the turkey, but regardless, if Everton had got their full punishment in that season, we would have stayed up.

I have always viewed the £50m figure as a bare minimum. But a settlement (that we never hear about) to save face for the Premier League and avoid a precedent, cannot be discounted.

[summitclaret]

I also heard the Talk Sport discussion. They said it's happening this week. No idea how long it takes thereafter to get a decision and if there is an appeals process. They thought a settlement was likely before the Hearing and suggested we could get up to £10m.

[NewClaret]

I also heard the Talk Sport discussion. They said it's happening this week. No idea how long it takes thereafter to get a decision and if there is an appeals process. They thought a settlement was likely before the Hearing and suggested we could get up to £10m.

I’ll be amazed if the compensation is as low as £10m if we win. Although I’m also surprised the claim is as low as £50m (although it does say in excess of) and that it hasn’t settled. Maybe it still will settle though. Those discussions can go right up to the wire and even during the hearing itself.

To be honest, I don’t think the media or any of the so called experts have a clue on this though, really. It’s rightly been kept well under wraps.

[NewClaret]

This should be a gift version of the I article
https://inews.co.uk/sport/football/burn ... 5koSHChZEU

Nothing really new in there except clarification that it isn't going to court, it's being done through arbitration. Nothing about the actual process though.

Not sure that’s true, is it aggi? It was never going to “court” as the Premier League rules keep all legal matters internally/out of court. So it was always going to be a “hearing” which is happening at the Dispute Resolution Cebtre.

Most interesting part of that article for me is that we’d hired Everton’s GC. That’s their top legal bod on top of the CFO we hired. If they haven’t nudged and winked us to where the skeletons were buried, nobody will’ve done.

[morninbob]

I also heard the Talk Sport discussion. They said it's happening this week. No idea how long it takes thereafter to get a decision and if there is an appeals process. They thought a settlement was likely before the Hearing and suggested we could get up to £10m.

It will be a damn site more than 10m, shef utd got more than that from west ham.

[aggi]

Not sure that’s true, is it aggi? It was never going to “court” as the Premier League rules keep all legal matters internally/out of court. So it was always going to be a “hearing” which is happening at the Dispute Resolution Cebtre.

Most interesting part of that article for me is that we’d hired Everton’s GC. That’s their top legal bod on top of the CFO we hired. If they haven’t nudged and winked us to where the skeletons were buried, nobody will’ve done.

It seemed unlikely that it was going to be in court but I don't think there'd been anything explicit saying that before now.

She was Head of Legal at Everton, so more likely second in command there, but was there for the relevant period.

[warksclaret]

Not sure who this expert was but it sounds like duff commentary to me.

We went down, back up, down again, and now up again. The classic yo yo club. Until the Everton issue we were a solid Premier League outfit for multiple seasons. That affects all kinds of things, which players can be attracted, which loans can be taken out etc. Dyche had a poor season and the owners were fattening the turkey, but regardless, if Everton had got their full punishment in that season, we would have stayed up.

I have always viewed the £50m figure as a bare minimum. But a settlement (that we never hear about) to save face for the Premier League and avoid a precedent, cannot be discounted.

Dont shoot the messenger-just repeating what someone who was very analytical and seemed to have a very close grasp of all the factors on both sides. Be very interesting to see what decision is made-goes without saying we all want the most compensation going for our club

[Shipclaret]

According to The Times today Burnley are seeking £50m in compensation from Everton. Burnley will argue at the International Dispute Resolution Centre in London that Everton’s penalty and its timing cost them relegation. The case is expected to last 2 months. Sounds an expensive approach if we don’t have a decent prospect of success. So let’s see.

[Spijed]

Not sure who this expert was but it sounds like duff commentary to me.

We went down, back up, down again, and now up again.

To the tune of Chumbawamba

[Juan Tanamera]

If the Premier League didn't hate us enough already.....

[JR1882]

According to The Times today Burnley are seeking £50m in compensation from Everton. Burnley will argue at the International Dispute Resolution Centre in London that Everton’s penalty and its timing cost them relegation. The case is expected to last 2 months. Sounds an expensive approach if we don’t have a decent prospect of success. So let’s see.

You’d imagine even if we win there will be a lengthy appeal. No word on a settlement yet though?

[NewClaret]

According to The Times today Burnley are seeking £50m in compensation from Everton. Burnley will argue at the International Dispute Resolution Centre in London that Everton’s penalty and its timing cost them relegation. The case is expected to last 2 months. Sounds an expensive approach if we don’t have a decent prospect of success. So let’s see.

I really think the Times (and most of the media) have got this wrong. We all signed up to the rules around investigation and punishment for PSR rule breaches. If we were going to bring a case based on this, it would need to be against the Premier League, not Everton. And since we signed up to the rules, I think that case would fail. Plus we’d be a bit daft to sue our own league/governing body, in my view.

We’ll be bringing the case against Everton, whose admitted rule breaching we will argue caused our relegation. We will be arguing that had they not breached PSR we would have stayed up. To do that we will have to proved they 1) gained a sporting advantage through the rule breaking, and 2) it likely amounted to >4 points over the course of the season.

1 should be pretty easy. In the written reasons of the original judgement, the hearing agreed with the Premier League that a sporting advantage was inferred in order to give the points sanction (instead of a financial sanction), but crucially it did not attempt to quantify it or directly or link it to the points deduction awarded. So the hard yards will be on point 2, proving how many points fewer Everton had obtained if they had spent £20m less to stay compliant?

There’s a whole host of evidence and options around this. For example, one argument we may make is that they should have stopped signing players that summer (they were given repeated warnings). Their summer signings of Gray, Townsend and Mykolenko that year made a major impact on their season - including winning goals vs us and Leicester. There’s a 7 point swing without trying too hard. What I’m not sure is how the accounting works with player transfers and whether they could argue, say Gray & Townsend were free/nearly free and could’ve been accommodated within PSR compliance. I’m sure it’ll be a messy picture of accounting rules and scenarios.

We may make an argument that both the hearing and the appeal quantified the breach at more than the 4 points we needed to stay up when determining their sanctions, but I think that will be a complementary argument vs the one we have to win to achieve compensation.

Despite all this, I’m amazed it hasn’t settled so presumably Everton are confident of their counter arguments also, and I think this would be the first ever award under the Premier League rules so I expect there will be lots of technical arguments on their ability to do that legally, which might be where it all falls down and we have to sue the Premier League if we want to pursue.

[NewClaret]

You’d imagine even if we win there will be a lengthy appeal. No word on a settlement yet though?

I’m not sure appeals are allowed under Premier League rules for compensation (they might be, but I’ve not seen it mentioned anywhere). That was one of the reasons I expected a settlement might be more likely.

[NewClaret]

According to The Times today Burnley are seeking £50m in compensation from Everton. Burnley will argue at the International Dispute Resolution Centre in London that Everton’s penalty and its timing cost them relegation. The case is expected to last 2 months. Sounds an expensive approach if we don’t have a decent prospect of success. So let’s see.

Just in this point, worth noting the hearing has already concluded and ruled that we have a valid case for compensation. Else we wouldn’t have been able to pursue this further.

To my knowledge, the same panel that heard the original case that awarded the 10 point deduction and also ruled that we had a valid case for compensation, is also hearing the case this time.

Obviously this doesn’t guarantee a win but it’s one of the reasons I expected it to settle.

[ClaretOfMancunia]

Also reported in the independent today that we're asking for £50m in compensation