Prospect of ‘club v club’ disputes following shock leaks in Man City case
It’s not only the football world that is reeling from the news that leaked in The Athletic last Friday over the charges against Manchester City FC brought by the English Premier League. After two years of waiting since the hearing which ran from September to December 2024, and with the official decision expected to be announced in a matter of weeks, the legal fallout from potential wrongdoing, alongside the ramifications for the League, perhaps for the game itself, is likely to be eyewatering.
The EPL’s case against Man City, which includes allegations of a failure to provide a true and fair view of their revenue and concealing player and manager remuneration, alongside a host of charges (30% of the total) for failing to cooperate with the investigation, could start off a chain reaction of litigation.
First up are the other League members. If Man City has breached the rules and won trophies, other clubs in the League have lost out. The charges cover the period 2009-18 during which the club won the Premier League three times, the FA Cup once, as well as garnering three League cups and the Community Shield. Each club has a contract with the EPL under the Premier League’s rules as well as being a member of the League. Other clubs may be looking to be compensated under contract principles.
The precedent of ‘club versus club’ disputes is the recent commission decision involving Everton and Burnley earlier this year: the Lancastrian side was awarded £40m for having been relegated from the EPL at the end of the season (2021-22) after it was found that Everton had breached profit and sustainability rules.
It is understood that four clubs registered at the time that the EPL case against Man City was brought to preserve their legal position: Arsenal, Liverpool, Tottenham Hotspur and Manchester United, with potential claims such as loss of earnings and loss of chance.
And it’s not only the clubs. Oli Goldman is a litigation partner at London-based commercial outfit, Wallace LLP and represents clubs on litigation and regulatory issues. He tells Legal Cheek:
“If the reporting is accurate, the decision has the potential to spawn huge amounts of litigation. If, as is reported, there is a finding of wrongdoing, that is going to pose a host of questions that lawyers will have to grapple with. How might Man City’s conduct have caused my client harm and how to assess that loss, be they other clubs considering what might have been the position if Man City hadn’t engaged in the prohibited conduct or the club’s own employees, sponsors, and so on dealing with the future reputational fall-out.”
As the twelve-week hearing played out at the International Dispute Resolution Centre, tucked inside an office between smart Paternoster Square and St Paul’s Cathedral, a number of legal teams could be seen entering the fray: the case pitted two Blackstone Chambers heavyweights against each other: Man City hired in Lord Pannick KC, estimated to be on a per diem fee of £20,000, and an Arsenal supporter. It was Pannick’s appointment that led to the fans at Man City’s Etihad stadium putting up a banner: ‘Pannick on the Streets of London’. Adam Lewis KC represents the EPL. Other KCs are also involved: Paul Harris KC, and Philip Marshall KC and James Mather, on EPL’s side; Andrew Hunter KC on Man City’s. Firms involved are Bird & Bird for the EPL and Clifford Chance for Man City.
Given the roster of names and firms and the extent of the charges, the legal bill for the case on both sides could total as much as £200-300m, lawyers estimate. Who should pick up the costs tab will be up to the three-person commission to decide. As Goldman says: “As we all know, the usual position in English litigation is that the loser pays the winner’s costs. And standard basis for costs is usually estimated at around 66% of actual costs. But this is a private arbitration, and it will be at the discretion of the independent panel. Given the allegations against Man City include 35 charges of failure to cooperate with the investigation, perhaps we are looking at the club having to pay a higher percentage of EPL’s costs.”
We can assume that Man City is not that phased: In one of the emails seen by Germany’s media outlet, Der Spiegel, back in 2018 (where the original allegations over Man City broke) the in-house counsel now-famously commented in relation to the separate UEFA case against the club from the time that the chairman would rather spend £30m on the 50 best lawyers in the world than agree a financial penalty. In this EPL case, it looks like Man City might end up having to do both.
