The Requirement for Claimants in Defamation Proceedings to show that their Reputation Suffered, or is Likely to Suffer, Serious Harm Emphasised by the High Court.

In Sobrinho v Impresa Publishing SA the High Court was asked to determine whether a Portuguese banker, living in Switzerland, was able to bring a claim for defamation against a Portuguese newspaper which had made certain allegations regarding the claimant’s role in the failure of a Portuguese bank. Although not resident in the UK, the claimant was chairman of a UK based charity and had business relations in the UK.

Section 1(1) of the Defamation Act 2013 reads as follows:

A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant.

The court confirmed that mere injured feelings would not amount to ‘serious’ reputational damage and that this issue must be determined before a defamation claim could continue. The court took a number of factors into account when considering whether the claimant had satisfied this requirement:

Circulation and Readership of the publication

The newspaper had a hardcopy circulation of the relevant edition totalling 136 in England and Wales, 52 digital subscriptions and could be accessed through a particular business information and research service. The court calculated that a total of 33 people had read the entire article.

It was confirmed that whether serious harm had been caused, or was likely to be caused, was not simply a matter to be decided by numbers. Due to the small circulation, however, the court ruled that no inferences in favour of the claimant could be drawn from the circulation alone.

Vindication of the Claimant’s Reputation in Portugal

The court noted that the Claimant had previously brought a libel claim against the same publisher in Portugal, but dropped his claim following a Portuguese Parliamentary investigation into the bank collapse, during which he was able to deliver his side of the story to the public.

The claimant noted that the investigation was widely reported in Portugal and this provided his opportunity to set the record straight, rendering the libel claim in Portugal redundant. The claim in the UK was continued as the Claimant alleged that there was ‘very little if any’ coverage of the investigation in the UK.

The court concluded that the Claimant had not suffered, nor was likely to suffer, serious reputational damage due to the publication of the article in question. This was due to the relatively small circulation and the fact that the coverage of the Portuguese Government’s investigation was just as easily accessible in the UK as the disputed article. For these reasons they court ruled that it would be a waste of time and effort for the claimant to take the case any further.  

The decision provides a practical example of the ‘serious harm’ test a claimant must satisfy before the attention shifts to the defendant following the 2013 reforms. The courts will scrutinse the effect of the publication in order to determine whether there is a possible claim, including all the surrounding circumstances.  

As this case shows, the 2013 act has made pursuing defamation claims much more difficult for claimants. Specialist legal advice should be sought as early as possible in order to analyse the claim, and ensure the best possible chance of satisfying the ‘serious harm’ hurdle.

Written by Guest Blogger Jonothan Scollen

Posted in Media, Arts & Entertainment | Leave a comment

Sporting testimonials now the subject of new legislation

Testimonial matches are a long standing practice in the sporting world to honour and pay tribute to a sportsperson’s playing career. These events are often held to signify the end of a sportsperson’s playing career, but can also be to acknowledge a particular period of service.

The practice was introduced at a time when professional players were relatively poorly paid and had limited earning potential following retirement from their sport. Over the years, the concept has evolved from a time when the amount a sportsperson received from the event reflected little more than passing a bucket around spectators attending the match, to thousands of pounds being generated from a special event or a series of related events.

Current legislation allows sportspersons to keep the entire proceeds of any such event without having the obligation to pay tax on it, in some circumstances. However, all of this is about to change.

From 6 April 2017, all income from sporting testimonials and benefit matches for employed sportspersons will be liable to income tax, with an exemption of up to £50,000 available for employed sportspersons with income from testimonials that are ‘not contractual or customary’. This new legislation will apply where the sporting testimonial is granted on or after 25 November 2015, and only to events that take place after 5 April 2017.

Manchester United Football Club recently announced that they are planning a testimonial for club captain, Wayne Rooney, during the summer of 2016. Whilst Mr Rooney has already revealed his intention to donate every penny raised to four charities close to his heart, this event would not be subject to the new legislation in light of the time-frame above.

With many current sportspersons adopting the same approach as Mr Rooney, in donating all proceeds to charitable causes, it will be interesting to see just how much of an impact this new legislation has on Testimonials come April 2017.

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FrontRow Legal Principal Richard Cramer provides expert opinion on takeover of Leeds United

Following the recent press reports that Leeds United owner Massimo Cellino is currently in the process of attempting to sell the Club, Richard was on hand to provide an expert opinion on this issue to BBC Radio Leeds.

To listen to this interview, please click on the following link: http://www.bbc.co.uk/programmes/p037vt8w

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Leeds United President Massimo Cellino banned under Football League’s Owners’ and Directors’ test

The Football League announced on 19 October 2015 that, following a review of the reasoned Judgment of an Italian court, it had deemed that the President of Leeds United Football Club Massimo Cellino’s conviction under Italian tax legislation relating to the non-payment of VAT constituted a disqualifying condition under its Directors’ and Owners’ test.

As a result of this finding, Mr Cellino will be suspended from running the club at an executive level from 11 November 2015, unless he appeals against the decision and permission is granted for the decision to be stayed, pending this appeal. Mr Cellino has stated that he intends to appeal, however the grounds for doing so are relatively limited and he must confirm any appeal by 28 October 2015.

In accordance with section 5 of Appendix 3 of The Football League’s rules, an appeal against a finding that an individual is subject to a disqualifying condition will only be upheld if either it can be demonstrated that they are not subject to a disqualifying condition, or that this resulted from a conviction by a Court outside of England & Wales and there are compelling reasons why the League should not prevent him acting as a ‘relevant person’ i.e President.

On the basis that the finding of guilt was in relation to the non-payment of VAT on an imported vehicle, it will certainly be a challenge to demonstrate that this should not be seen as falling foul of the Football League’s rules in that this was either a dishonest act or any of the other failing provisions contained within the Owners’ and Directors’ test. Accordingly, should this ground of appeal fail, then Mr Cellino will have to demonstrate that there are compelling reasons why the League should not suspend him. As this definition is wide, it will be for Mr Cellino’s lawyers to prove and it is not possible to accurately predict what any appeals panel are likely to accept.

It should however of course be taken into consideration that this is not the first time that Mr Cellino has fallen foul of the Owners’ and Directors test. Following a similar conviction for failing to pay £305,000 import tax on a yacht in March 2014, Mr Cellino was originally suspended, however this was lifted pending receipt of the final Judgment of the Italian court. Following receipt of this, the suspension was imposed until such time as the conviction was deemed ‘spent’ under UK law, this being 1 year after it was imposed.

Accordingly, should Mr Cellino’s current appeal fail, then the suspension, which arises due to non-payment of the much lesser sum of £28,400, will remain until the latest conviction is spent, in June 2016.

Leeds fans will no doubt be waiting with anticipation to see what the outcome of any appeal is, therefore what role Mr Cellino will have at the club this season. However, if the previous suspension is anything to go by, then the Club certainly seemed to cope in Mr Cellino’s absence and Leeds fans will probably just be hoping that the current off-field activities do not detract from new manager Steve Evans’ tasks on the field of play.

This continuing story will certainly be reported by the national and local press, who have turned to expert opinion such as FrontRow Legal’s principal Richard Cramer to offer opinion and guidance.

Posted in Regulatory & Disciplinary, Sports Business | Comments Off

Do Athletes Need to Know They Are Using Prohibited Substances in Order to Violate Anti-Doping Rules?

 

Doping – taking banned substances in order to enhance sporting performances – is an issue that many are aware of at the moment due to the much publicised test-data leak placing professional athletics under the spotlight.

The amended World Anti-Doping Association Code that came into force in January 2015 (‘The Code’) emphasizes that it is the athlete’s personal duty to ensure they do not take any prohibited substances, with Article 2.1.1 of The Code stating:

“Accordingly, it is not necessary that intent, Fault, negligence or knowing Use on the Athlete’s part be demonstrated in order to establish an anti-doping rule violation under Article 2.1. [Author’s emphasis]”

This duty even extends to an athlete’s entourage and if found to have not taken sufficient steps to vet staff, liability could arise even for substances administered by staff without the knowledge of the athlete. The Court of Arbitration for Sport (‘CAS’) has in numerous cases upheld the strict liability of Article 2.1, making it clear that a lack of knowledge is not an automatic defence. Even if the court finds no significant fault or negligence, the consequences can range from a reprimand to a maximum 2 year ban.

Where the athlete falls within that range depends on their degree of fault, therefore it is crucial that athletes research items such as supplements thoroughly, question manufacturers and make sure their products have been fully tested for any substances found on prohibited lists. Databases such as Informed Sports should be a crucial part of any research.

The case of UKAD v Gareth Warburton and Rhys Williams makes this clear as the two athletes were given six and four month bans respectively for taking a substance without any knowledge or intention to cheat. The bans were given as they were found to be at fault due to their ineffective research, Warburton’s ban slightly longer as he didn’t review the Informed Sports website at all. William’s had searched for the product on Informed Sports but when he asked the manufacturer why it wasn’t listed, took the responses at face value. The decision highlights the stringent application of the code, with superficial research not enough to account for a lack of knowledge and intent.

Although the media is concentrating on Athletics, given such bodies as World Rugby, the International Cricket Council and the Football Association are all adherents to The Code it is important that all athletes take note. Failure to do so could mean a long spell on the side-lines and a costly battle to rebuild a damaged reputation.

Rugby League player Sean Penkywicz is the most recent example of The Code’s strict application, receiving a two-year ban for testing positive to a substance which was only found after a negative sample in 2014 was re-tested. Sean had no knowledge of the re-tests and told the media that he had “not knowingly injected myself with drugs”, but that he was “now legally advised to accept a two-year ban which effectively ends my career…”

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Could football see a return of third party ownership before it has even left the sport?

Third party ownership, also known as a TPO, is when the transfer rights of players are wholly or partially owned by a third party other than the club the player plays for. Since 2006, this practice is something that is already prohibited in England ever since the media interest surrounding Carlos Tevez and Xavier Mascherano’s transfers to West Ham United.

This new blanket ban by FIFA came in to force on the 1st January 2015 and was implemented at Article 18er of the FIFA Regulations. It states:

“No club or player shall enter into an agreement with a third party whereby a third party is being entitled to participate, either in full or in part, in compensation payable in relation to the future transfer of a player from one club to another, or is being assigned any rights in relation to a future transfer or transfer compensation.“

This ban does not come into play until 1 May 2015, any contracts which involve this kind of agreement pre-dating the new rules will be allowed to run its term and any new agreements made between 1 January 2015 and 1 May 2015 can not exceed the duration of one year.

These new rules created by FIFA have been applauded by many supporters, notably by UEFA President, Michel Platini, who in a recent interview described TPO as “a type of slavery that belongs in the past”; going on to say, “Today it is shameful to see some players with one of their arms belonging to one person, a leg belonging to a pension fund located who knows where and a third person owning his foot.” . However, there are two sides to every story and this ban isn’t welcomed by everyone. Notable arguments are that without third party ownership many clubs will struggle to keep up with the pace set by the European giants such as Manchester United, Real Madrid or Bayern Munich. An example of success is Atletico Madrid who won La Liga as well as make the Champions League final last year, through the use of such schemes.

 This method of investing in players, that clubs could not otherwise afford, is predominantly seen in South America; however the biggest opposition to FIFA’s ban has come from Europe. On 9 February 2015, the Liga de Fútbol Profesional (LFP) and the Liga Portuguesa de Futebol Profissional (LPFP) denounced the world governing body to the European Commission for anti competition agreements and abuse of dominant position by them.

 The above claims are made under Articles 101 and 102 of the Treaty on Functioning of the European Union, which deal with anti-competition practices. These articles state that:

 Article 101:

“The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market.”

Article 102

“Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.”

Sports governing bodies must obey this treaty as they are classed as economic operators. As a result, FIFA is under the obligation to obey Articles 101 and 102.

 The LFP and the LPFP are arguing that as a result of being bound by the TFEU, FIFA have contravened this European legislation by restricting the freedom of competition by stopping clubs, that use TPOs to compete on the European market, from using them.

 There is yet to be a response from the European Commission on this newly instated competition claim from the Spanish and Portuguese FAs, but if this claim was to be successful FIFA could be looking at a fairly hefty fine as well as the possibility of being liable for damages to clubs, players and companies involved in TPOs.

 A ruling such as the one that is sought by the LFP and LPFP could have repercussions closer to home, this could mean that the FA Rules banning TPOs could be illegal. Therefore, re-opening the litigation on this seemingly ugly side of the beautiful game.

Written by guest blogger Steven Vettorel.

Posted in Players, Coaches & Managers, Regulatory & Disciplinary | Comments Off

Richard provides expert opinion on rejection of Massimo Cellino appeal

Following the announcement yesterday from The Football League that the appeal by the Leeds United Owner Massimo Cellino against his disqualification under the Owners and Directors test had been rejected, FrontRow Legal’s Principal Richard Cramer was once again on hand to provide expert opinion to the national and local press on the ramifications of this decision. For a selection of this commentary please see below:

http://www.itv.com/news/calendar/update/2015-01-19/will-latest-cellino-blow-be-one-to-many-says-sports-lawyer/

http://www.dailymail.co.uk/wires/pa/article-2856450/Cellino-plans-appeal-failed-test.html

https://www.youtube.com/watch?v=GScpkKlqh5Q

A brief overview of the present situation is provided below:

The latest development relates to an Italian Judgment dated March 2014, whereby Mr Cellino was found guilty of failing to pay import duty tax on a luxury yacht. As a result of this, he was ordered to pay a fine in the region of 600,000 euros. Subsequently, The Football League endeavoured to block his attempt to acquire the majority shareholding of Leeds United under their Owners and Directors test, previously known as the Fit and Proper Persons test. Under this, individuals who have unspent convictions for offences of dishonesty are disqualified from taking such action.

Mr Cellino successfully appealed against this decision in May 2014, when an independent QC, Mr Tim Kerr, ruled that the offence could not be proven to be dishonest until such time as the full Judgment from Sardinia had been released. Mr Cellino finally became the majority shareholder of Leeds United in April 2014 when his company Eleonora Sport Limited agreed to purchase the club from previous owners GFH (Gulf Finance House) Capital, a limb of the Bahraini investment bank GFH.

Following the release of the full Italian Judgment, The Football League subsequently found that Mr Cellino had, in fact, acted dishonestly in relation to the tax evasion case. They therefore moved to disqualify him. Under this disqualification, Mr Cellino was ordered to resign as a club director and take steps to ensure that he is not acting as a relevant person at the Club within 28 days. Mr Cellino however appealed against this decision, which allowed him to continue in his role pending the appeal.

A Professional Conduct Committee, set up by The Football League and chaired once again by Tim Kerr QC, considered the appeal at a Hearing on 15 January 2015 and rejected it. Following this decision, the Leeds United Owner has now been disqualified from acting as a ‘relevant person’ until 10 April 2015. Under the relevant rule, Mr Cellino’s conviction will be deemed ‘spent’ on 18 March 2015, however the suspension will be extended as a result of the appeals process.

Leeds United’s Chief Operating Office Matt Child has however confirmed that the Club continue to consult with their lawyers and it may be the case that we are yet to hear the end of this matter. When it comes to Leeds United, its fans will be familiar with their Club being in the press recently more for their off-field activities rather than their performances on the pitch. It is almost certain that this latest scenario has a long way to go yet. It will certainly be interesting to see what sort of frameworks are put in place to run the club in Mr Cellino’s temporary absence and whether this latest decision has any long-term effect on the passion of the Owner and subsequently Leeds United as a Club.

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FrontRow Legal provide expert sports law opinions to the press on Massimo Cellino ruling

Following the recent announcement from The Football League that Leeds United Football Club owner Massimo Cellino will be forced to resign from his role at the Club after receipt of the Judgment from the Italian court which found him guilty of tax evasion, FrontRow Legal were called upon to provide expert opinions on this issue to the press.

Whilst Principal Richard Cramer provided commentary on the various legal ramifications of this decision to the BBC, ITV, Press Association and local news providers, Trainee Solicitor Alan Darfi provided a detailed interview for Radio Yorkshire.

An extract from Richard’s interview with the BBC can be located at 09:00 by clicking on the following link:

http://www.bbc.co.uk/iplayer/episode/b04sxcg1/look-north-yorkshire-01122014

Various articles quoting Richard can be located by clicking on the links below:

http://www.sportinglife.com/football/news/article/2/9588451/massimo-cellino-disqualified-from-owning-leeds-united-by-football-league

http://www.nationalheadlines.co.uk/834343/cellino-plans-appeal-of-failed-test/

http://www.thetelegraphandargus.co.uk/sport/football/footballleeds/11638283.print/

http://www.westerndailypress.co.uk/Cellino-vows-contest-ruling-resign-position-Leeds/story-25006131-detail/story.html

Alan’s interview can be found by clicking on the following link:

http://radioyorkshire.co.uk/articles/sports-lawyer-discusses-cellinos-disqualification/

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Should an employee quit as soon as they consider there to be a breach of the employment contract?

When advising employees on their various options following an alleged breach of contract by an employer, one issue which always arises is at what stage the employee should formally resign, if taking this course of action. There is always the concern that, through not resigning immediately, it could be held that an employee has affirmed any breach of conduct. Potentially, this could be the case even where it should be clear that they did not intend for the contract to continue.

The Employment Appeal Tribunal have held however in the recent case of Chindove v Morrisons Supermarkets that delay in resigning in itself cannot amount to an affirmation of a breach of contract. The Employment Tribunal had held in the first instance that due to the fact that the last act of mistreatment (this being the failure of an HR manager to investigate a grievance) had occurred 6 weeks prior to resignation, the employee had affirmed the breach of contract. On appeal however, it was held that the matter of time is not to be taken in isolation. What is more important is whether the employee has demonstrated through their conduct that they have made a choice that they wish for the contract to continue.

This is good news for employees who are simply considering their options following a breach of contract, or attempting to negotiate a settlement with their employers, as often happens in sport. It is not uncommon for negotiations of a settlement to take several weeks, particularly in these days of foreign owners and busy schedules. The news that it is possible to undertake this process without running the risk of being accused of affirming a breach is well received therefore. As confirmed in the case, it is the conduct which is important. Therefore, if it can be shown that a participant has been replaced (as is easily demonstrated where a new manager or coach have been appointed) and that the individual has been engaged in attempting to agree a settlement, it will not be held that the breach which lead to the resignation has been affirmed, simply by the fact that it occurred some time before any resignation, following a breakdown in negotiations.

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Who’s the self-employed independent contractor in the black?

It is likely that many a football fan will have joked about issuing a formal complaint to a referee’s employer following dubious performances throughout the season. However, the question of whether match officials are actually employees of their respective Football Associations is not as straight forward as you would first think, as has recently been confirmed in the case of Conroy v Scottish Football Association.

In the case, which was considered by an Employment Appeal Tribunal, Mr Conroy, a top level Scottish referee, issued claims against the Scottish Football Association for unfair dismissal, age discrimination and holiday pay. The Scottish FA however argued that Mr Conroy was self-employed and was therefore not entitled to issue such claims. An employment tribunal had previously found that he was not an ‘employee’ for the purposes of the Employment Rights Act 1996. However, it had held that he was an ‘employee’ for the purposes of the Equality Act 2010 and a ‘worker’ for the purposes of the Working Time Regulations 1998. Mr Conroy appealed against this decision. The Appeal Tribunal have dismissed this appeal however and have upheld the original decision. Accordingly, Mr Conroy is unable to pursue his clam for unfair dismissal. However, he is still able to pursue the claims for age discrimination and holiday pay.

In making this finding, the fact that Mr Conroy purchased his own equipment, such as flags and whistles, was taken into consideration. Additionally, attention was drawn to the fact that the Scottish Football Association were not obliged to offer any fixtures to the match official and he would not be disciplined for withdrawing from fixtures. Although the FA provided private medical care and insurance cover, they did not pay any sick pay and Mr Conroy was responsible for his own tax. Finally, it was noted that Mr Conroy had a full time job, although it was noted that he was paid £213,000 each season for officiating at matches.

The result of this finding means that, although Mr Conroy still has several options still available to him, he will be unable to pursue a potentially lucrative claim for unfair dismissal. Although on first viewing it would be easy to say that the question of whether a referee is employed by a Football Association is a simple one, as is often the case with employment law issues a lot depends on the facts specific to the case.

So the next time you feel the urge to hurl abuse at a match official for making what is perceived to be an incorrect decision, have some sympathy for them. They are choosing to give up a lot of time without actually becoming employees and benefiting from the receiving of employment rights in return. And those flags aren’t cheap either, even if you are being paid £213,000 a season.

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