Burnley are seeking compensation for loss of revenue due to relegation in 2021/22
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Everton are playing their final season at Goodison Park
Everton are playing their final season at Goodison Park(Image: Alex Livesey/Getty Images)
Everton have appointed Mark Howard KC to lead their defence in the compensation case with Burnley this summer. The leading silk had represented the Toffees during their PSR hearing last year.
Burnley have brought legal action against Everton over what the Clarets perceive to be a loss of revenue attributable to relegation in at the end of the 2021/22 season, a campaign when the Toffees breached PSR, with the actual punishment coming the following season when the club were hit with a second breach for the 2022/23 accounts.
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When the Toffees were found to be in breach of the Premier League’s profit and sustainability rules (PSR) for the 2021/22 and 2022/23 financial years, five clubs moved to apply for potential compensation; Burnley, Leeds United, Leicester City, Nottingham Forest and Southampton.
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The motivation behind the move was borne from the financial hardship that had been suffered by relegation, or that could have been potentially suffered, with drop into the Championship seeing clubs hit with a significant drop in revenue.
The PSR breach for 2021/22 came with a 10-point deduction which was then reduced to six, while the two points that was imposed in relation to the 2022/23 breach was two points. While both punishments ran concurrently last season, they were set apart from a legal standpoint when clubs were seeking compensation.
A two-point deduction in 2022/23 would have seen Everton still stay up on goal difference in a season when Leicester, Leeds and Southampton were all relegated. Those three clubs, as well as Forest, dropped their appeals upon the reduced penalty.
But a six-point deduction in 2021/22 would have seen Everton finish on 33 points and in the bottom three, thus relegated to the second tier of English football.
The side that finished third-bottom that season was Burnley on 35 points, and the Clarets are pushing ahead with a search for compensation, with the case to be heard this summer.
Everton’s engagement of Howard was first reported by The Lawyer website, with the hearing set to take place at the International Dispute Resolution Centre for Arbitration and Mediation in London.
The same commission that imposed a ten-point deduction on Everton initially is also deciding on the compensation for any claims for financial damages associated with it by aggrieved clubs. The commission’s chairman, David Phillips KC, had previously stated: “I am satisfied that the applicant clubs have potential claims for compensation.”
Everton challenged that position at the time by stating that their appeal, and subsequent reduction in the points deduction, was handled by a different commission.
Quite how much, if any, compensation Burnley would be entitled to remains rooted in legal arguments between the two clubs and could take some time to fathom out given that there has been no precedent in the Premier League.