Hill Dickinson stadium
Hill Dickinson stadium
Burnley FC has won its legal dispute with Everton FC after the club sued the Toffees for breaching Premier League rules, The Lawyer understands.
Everton has been ordered to pay Burnley compensation and interest of nearly £40m, although it intends to appeal.
The case went to trial in the Autumn, with the Premier League expected to publish the judgment sometime this week.
Everton, which was defended by Pinsent Masons, was deducted 10 championship points in late 2023 for breaches of the Profitability and Sustainability Rules (PSR) in the 2021/22 season.
This was reduced to six points on appeal in early 2024.
Burnley, which instructed King & Spalding, subsequently sued Everton after it was relegated to the Championship in 2022, the same year that Everton breached the PSR.
The Premier League’s rules allow for clubs to seek compensation from other clubs for rule breaches that cause them loss.
It is believed that part of Burnley’s claim is that, had the six point deduction taken place in 2022, Everton would have been relegated and Burnley would have stayed in the Premier League.
Burnley’s case is reportedly based on the legal principle of ‘loss of chance’. In such a situation, a club like Burnley might argue that, although it was not certain that it would have stayed in the Premier League, Everton’s rule breaches deprived it of a real chance of doing so.
Damages in these cases are typically calculated by taking into account the value of the lost opportunity and the likelihood of success.
Dropping down to the Championship typically brings with it substantial revenue losses. Conversely, with the winner promoted to the Premier League, the Championship play-off final is considered to be worth about £200m and described as the richest match in football.
Reports suggested that Burnley had sought at least £50m from Everton in compensation.
Clubs including Leicester City, Leeds, Nottingham Forest and Southampton had also planned to bring proceedings against Everton, but later dropped their claims.
The Lawyer understands that Everton plans to appeal, with a hearing hoped to be scheduled before the end of the year.
The decision is believed to be the first of its kind and will likely have a significant impact on future financial fair play disputes, with clubs that breach rules facing not only a sporting sanction but also the possibility of compensation claims from other clubs.
Manchester City and its rivals will be closely following the appeal and any legal precedent it sets.
Several Premier League clubs are understood to have lined up legal counsel to sue City for compensation, should it be found to have breached League rules in the 115 charges case brought against it.
The clubs were contacted for comment.
Legal line-up
For the claimant, Burnley FC
King & Spalding partners Tom Sprange KC and Ruth Byrne KC, senior associate Charity Kirby, and associates Liam Petch and Kate Williamson
For the defendant, Everton FC
One Essex Court’s Sonia Tolaney KC and Blackstone Chambers’ James Segan KC and Barnaby Lowe, instructed by Pinsent Masons partner Julian Diaz-Rainey