Yet more media coverage for FrontRow Legal Principal Richard Cramer

Following the recent announcement that an independent QC had upheld the prospective Leeds United Football Club owner Massimo Cellino’s appeal against the decision of The Football League to reject his takeover of the Club, Richard was again on hand to provide an expert opinion to the press.

To watch Richard’s interview with Radio Yorkshire please follow this link: http://radioyorkshire.co.uk/?post_type=articles&p=554

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Employment law changes taking effect from 6 April 2014

Back in December we commented on what were, at the time, forthcoming changes within the area of employment law (http://www.frontrowlegal.com/blogs/blog/forthcoming-employment-law-changes/)

With several of these amendments coming into force on 6 April 2014 we thought it a good time to pick out two areas which are likely to be of interest to those seeking to make a claim against their employers.

ACAS Early Conciliation

It has now been confirmed that any potential claimants must first refer their claim to the Advisory, Conciliation and Arbitration Service (ACAS), before they are able to submit an ET1 claim form to the employment tribunals. This service will be brought in from 6 April 2014 and will become mandatory from 5 May 2014.

Once ACAS have been notified of a claim they will contact the potential claimant to obtain further details from them about the matter. Importantly, the potential claimant is not required to proceed with the ACAS service and can simply confirm that they do not require their assistance. If this is confirmed it will not prohibit them from subsequently proceeding with the case through the employment tribunals.

Where a potential claimant indicates that they do wish to utilise the ACAS service, a Conciliator will contact the employer and attempt to reach a solution between both parties. One of the main reasons why the current Pre-Claim Conciliation Service has not proved successful is due to the fact that the limitation period, this being the time within which a claim must be issued, is only 3 months from the date of dismissal in employment cases. Under the new scheme, ACAS will contact potential claimants within 2 days of initially being notified of a claim. They will then have 1 calendar month from receipt to promote a settlement which can be extended by up to 14 days where there is a reasonable prospect of settlement and both parties agree. The time limit to submit a claim to the employment tribunals is paused from the time that ACAS are first contacted and will re-commence once ACAS have confirmed that the early conciliation procedure has been concluded, either through settlement or the fact that the proposed claimant/employer does not wish to continue with the service.

One interesting aspect however is the fact that the Conciliators are not able to make judgments about whether tribunal claims have any merit. There will therefore be situations where ACAS are obliged to continue with the conciliation process, even if they do not consider the claim to be valid. Additionally, Conciliators can only convey to an employer what the potential claimant has told them. It will therefore be difficult to establish if any potential claims exist where this information is unclear or incomplete.

It will be interesting to see how these changes affect the numbers of potential claims which are settled without the need to involve the employment tribunals. There is no doubt that there will be an increase, however it remains to be seen whether people simply refer their potential claims to ACAS with no intention of actually using the service, in order to be able to continue through the standard process.

Increased figures

One other change which will be of interest is that the maximum amount for a week’s gross pay is being increased from £450 to £464, when calculating amounts that can be claimed by an employee. This uplift is likely to apply to a large number of claimants, in that this calculation is used to calculate the basic award and will therefore provide a larger pay-out for those who are on annual salaries over £23,400, whereas previously their claim would have been restricted. Additionally, the maximum compensatory award is being increased from £74,200 to £76,574, this award being compensation for actual loss of income. It could however be said that this is likely to only affect those on large salaries, or those who are likely to be unable to find work for a significant period of time.

 

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Leeds United: Richard asked to provide expert opinion to the press

The past few weeks have been busier than usual for FrontRow Legal’s principal Richard Cramer, with various national and local journalists, including those from the BBC and ITV, requesting interviews to discuss the recent events surrounding the proposed takeover of Leeds United FC by Massimo Cellino.

On 18 March 2014, the Italian courts fined the proposed new owner following a finding of guilt in relation to tax evasion. Richard was asked to comment on what the likely outcome would be following this, particularly in light of the fact that The Football League were in the process of assessing whether the Italian passed their owners and directors test.

When The Football League subsequently announced that the finding would lead to Cellino failing the test, Richard was again called upon to provide expert opinion on what this now means for Leeds United.

For Richard’s detailed commentary on this issue please see the national press.

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FrontRow Legal Principal Richard Cramer meets Jimmy Montgomery

With the invention of wifi the life of a sports lawyer does not always involve being chained to a desk or phone, as was evidenced by Richard’s visit to The Stadium of Light on Saturday to watch Sunderland’s defeat at home to Hull City.

Any Leeds United fans will want to look away now however, as Richard was clearly witnessed chatting amicably with Jimmy Montgomery, the former goalkeeper famously known for that double save during the 1973 FA Cup Final: http://www.youtube.com/watch?v=PZmFoo4payA

Any Sunderland fans may also want to avoid the image below. Although, to be perfectly honest, the reasoning behind some of the questionable tactics during the game might become clearer if you choose not to……

 

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The CAS ad hoc division: Verdicts delivered at a gold medal winning speed

The start of the 22nd Olympic Winter Games in Russia will see people from all corners of the globe descend upon Sochi in anticipation of sporting glory. Amongst this mix of elite athletes, coaches, spectators and media will be members of the Court of Arbitration for Sport who have set up an ad hoc division of the Court for the duration of the Games. The Court of Arbitration for Sport (‘CAS’) is an international quasi-judicial body which was established to settle disputes related to sport. Rule 61 of the Olympic charter specifically states that all disputes in connection with the Olympic Games can only be submitted to this body. Due to the necessity for prompt decisions, which might have an immediate effect on the running of the Olympics, temporary Courts are set up within Olympic host cities. These temporary Courts have the same powers as the normal Courts, however decisions are delivered at an expedited rate and a binding verdict will be delivered within 24 hours.

An example of this in operation was the first decision to come out of the Sochi ad hoc Court concerning the Austrian halfpipe freestyle skier Daniela Bauer. The skier filed an application on 2 February 2014 for CAS to order the Austrian ski governing body to place her on the Olympic team for this event. Her case was that she had met the International Ski Federation qualification requirements and that a place had been promised to her. Having received the application on 2 February, the case was heard on 3 February and the decision to reject the application was delivered immediately. Although the result was probably not what the athlete would have wanted, the speed at which CAS operates during Olympic competitions will have provided some comfort. Although the work of CAS often goes unnoticed, it is as much a lynchpin of the effectiveness of the organisational process as the person who orders blanks for the starter’s pistol. Without this body being in place, disputes would drag on and undoubtedly dramatically affect the competition. With CAS being set up precisely to deliver fast and free verdicts, this is not allowed not happen.

Having said that, there is one area which CAS does not get involved in which relates to on-field decisions. As has frequently been demonstrated, the ad hoc division of CAS has consistently refused to become involved in decisions relating to these sorts of decisions. Examples of which are an appeal brought by a French boxer in 1996 for punching below the belt and, more recently, an appeal brought by a Mexican walker in 2000 for disqualification. In doing so, CAS has stated that the most competent person to deal with such decisions is the referee or official. It is perhaps for this reason that CAS has managed to stay out of the limelight, despite providing an excellent service which has been relied upon by hundreds of Olympic athletes over the years.

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Financial Fair Play Rules: A brief explanation

With the transfer window closing on 31 January, we thought it an appropriate opportunity to provide a very brief explanation of UEFA’s Financial Fair Play Rules. With Manchester United recently breaking their club record transfer fee for the purchase of Juan Mata, it would be easy to say that clubs are laughing in the face of these rules. However, as will hopefully be explained below, this is not necessarily the case. Although a full explanation of the requirements is far beyond the scope of this blog, a brief summary of the main points should hopefully provide you with a basic understanding of what are an extremely complex set of rules. For the purposes of brevity, we will concentrate on how the rules will affect Premiership clubs. Please note that although the rules set out financial limits in Euros these have been converted to Sterling.

In a nutshell, clubs are now required to comply with UEFA’s Financial Fair Play Rules. Non-compliance may result in a sanction ranging from a warning all the way up to a large fine and expulsion from UEFA competitions, although we will discuss more on this later. The intention behind these rules is to ensure that football clubs are run like a business, and that any club reporting substantial regular financial losses should be punished. However, as has been widely reported in the press, the matter is not as straightforward as it might initially seem. There are various factors which need to be taken into consideration when looking at whether a club is deemed to have reported a loss in accordance with the rules. Additionally, the rules themselves cover much more than just the requirement to break-even, including paying players on time and keeping up-to-date with taxes. However, it is the break-even requirement which is likely to pose the most concern to premiership clubs, therefore we will concentrate on this.

After an easing in period, when wages for players signed before 1 June 2010 were excluded from financial records and permitted losses were set relatively high, we are now in the middle of the first ‘proper’ accounting period, which runs over 3 years. UEFA felt it unfair to assess a club’s break-even results over 1 year therefore they look at a 3 year average. Over this 3 year period clubs are required to demonstrate that they have complied with the rules. However, as will be discussed below this doesn’t actually mean that they have to show that they haven’t made a financial loss.

The first slightly confusing area relates to the fact that clubs are allowed a permitted level of loss (yes, you did read that correctly). Although this is set at £4.1 million per single monitoring period, this permitted loss is greatly increased (up to £24.7 million) if the owner converts this loss to equity. In other words, if a club are due to breach the threshold, then the owner is forced to inject up to £20.6 million of their own cash into the club. It goes without saying that this is something that will greatly benefit the wealthiest owners, who will almost certainly be looking to take full advantage of this exception, at least in the short-term.

Additionally, there are various expenses which are completely excluded from the reports. For instance, infrastructure development, youth development and community development costs are all excluded. UEFA has stated that the reason for this is that it does not want the rules to affect development in the game. Although this is likely to be one outcome, the wealthiest clubs have stated that they are hoping to be able to exclude up to £10 million using these exceptions.

As is evidenced with the recent transfer of Juan Mata from Chelsea to their rivals Manchester United, a transfer that, arguably, would not have taken place if Chelsea did not have one eye on the financial fair play requirements, clubs are certainly conscious of adhering to the rules, or at least appearing to. What is more telling however are the recent accounts for Manchester City from Deloitte for 2012/2013. These show a huge 31% increase in commercial income, from £121.1 million to £158.2 million, in a season where the only major deal was a kit deal worth an estimated £12 million. This deal was the largest in this year by some margin. To put this income stream into context, in 2009/2010 the clubs entire commercial income was less than £55 million. The result of this huge increase is that the club are most likely to be within touching distance of complying with the break-even rules. However, this is before any assessment of a transaction from a ‘related part’ is investigated by UEFA.

Under this provision, any transaction with a company or body connected to the clubs owners can be investigated and the value decreased if it is found to be at an inflated value. As I am sure you can imagine, investigations into these transactions are likely to be extremely complicated and difficult to prove. In 2011/2012 Manchester City reported that they received £12.8 million from the owners for ‘Intellectual Property and Knowhow’, it goes without saying that this will probably not be the last one-off items in clubs accounts for large amounts.

Having taken all of the above into consideration, it is clear to see that the argument as to the effectiveness of the Financial Fair Play Rules is still in its infancy. With so many loopholes it remains to be seen how much of a change the rules will have on how the game is run. Linked to this is the fact that we are yet to see what punishments UEFA will impose for breaches. If word coming out of the organisation is to be believed, then clubs will be excluded from European competitions for failing to comply. However, the jury is out on whether this threat will be followed up on. Additionally (and perhaps more importantly) in the background is the legal challenge to the laws themselves on the basis that they breach EU rules on competition and free movement. Although that is a blog for another day………

 

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UK Israel Business Breakfast Club with guest speaker Howard Webb MBE – Review

As reported last week, FrontRow Legal recently sponsored the UK Israel Business Breakfast Club featuring Premier League referee Howard Webb MBE as its guest speaker

The event was extremely well attended and the feedback from all those in attendance has been fantastic, with all remarking on how much they enjoyed listening to Mr Webb. During what was an extremely informative and humorous presentation, the high profile match official explained the importance of setting personal goals and working towards achieving them, using his own rise from a local Sunday League match official to being the only referee in history to have had the honor of refereeing both the European Champions League and World Cup Finals in the same year as an example.

As a proud patron of the Yorkshire based children’s charity PhysCap, who also sponsored the event, the match official also spoke about his involvement with the organisation and the fantastic work that they do.

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FrontRow Legal sponsor UK Israel Business Breakfast Club with guest speaker Howard Webb MBE

FrontRow Legal are sponsoring the forthcoming UK Israel Business Breakfast Club which features Premier League referee Howard Webb MBE as its guest speaker. The event is hosted by the Marjorie & Arnold Ziff Community Centre, Leeds, and starts from 7:45am on Friday 24 January 2014.

Arguably the highest profile match official in the country, Webb holds the honour of being the only referee in history to have refereed both the European Champions League and World Cup Finals in the same year, in 2010. He will also be the only English representative refereeing at the forthcoming World Cup Finals in Brazil.

During what promises to be a very entertaining presentation, Webb plans to cover what is necessary to achieve your goals, drawing from his own experiences.

Please contact richard.cramer@frontrowlegal.com for any further details.

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FA charges Anelka over ‘quenelle’ gesture – what happens next?

Following a lengthy period of investigation, The Football Association have today announced that they have charged the West Bromwich Albion player Nicolas Anelka following his much publicised ‘quenelle’ goal celebration during their fixture against West Ham on 28 December 2013. FrontRow Legal’s Alan Darfi, who prior to joining the practice spent 6 years at The FA, 2 of which in the Regulatory Legal team who have issued the charges against Anelka, takes us through the ins and outs of the process.

Anelka has been charged under FA Rule E3(1) for making a gesture which was abusive and/or indecent and/or insulting and/or improper. In addition, it has been alleged that this was an aggravated breach in that it included a reference to ethnic origin and/or race and/or religion or belief, in accordance with FA Rule E3(2). Anelka has until 6pm on 23 January 2014 to respond to the charge. Although there are various options available to the player, it is almost certain that he will deny the charge and request that a personal hearing be convened.

When a player is charged under FA Rule E3(1) and it is alleged that an aggravating factor is present, the hearing takes part in 2 stages. During the first stage the commission members will consider the first part of the charge. In this case, this will be whether they feel that the gesture performed by Anelka was indeed abusive and/or indecent and/or insulting and/or improper. Although Anelka has stated that this gesture was simply a reference to his friend Dieudonne M’Bala M’Bala, an anti-establishment comedian who first performed the gesture 4 years ago, it is widely accepted to have an anti-Semitic and/or racist meaning in France, which is where Anelka is from. The FA have announced that they consulted an independent expert during their investigation process, therefore it is certain that they will have a report which sets out that this gesture is clearly of a racist nature and that, importantly, Anelka would have been aware of this. Although Anelka is likely to claim that (1) the gesture is simply anti-establishment and not racist in any way; or (2) if the gesture does have racist undertones then he was not aware of them, in light of this report it will be an uphill battle to prove, on the balance of probabilities (which is the standard of proof adopted by FA commissions), that the gesture was not abusive and/or indecent and/or insulting and/or improper.

If the first part of the charge is found proven, the commission members will then consider the second part of the charge, namely whether the breach should be seen as being aggravated by reference to ethnic origin and/or race and/or religion or belief. The arguments above are likely to be repeated if this point is arrived at. Again, it is likely to be an uphill battle for the player, in light of the evidence which has almost certainly been obtained from the independent expert. It is this section that West Brom’s lawyers will be most concerned with however, as a guilty verdict will have serious connotations for their player and club. This season The FA have brought in new regulations, in line with guidance from FIFA, which state that ‘where a Participant commits an Aggravated Breach of Rule E3(1) for the first time, a Regulatory Commission shall impose a suspension of at least 5 matches … The Regulatory Commission may increase this suspension depending on any additional aggravating factors present’ Therefore, if Anelka is also found guilty under E3(2) the minimum sanction he will face will be a 5 match suspension, which may rise to more. When you consider the similar high-profile cases of John Terry (4 matches) and Luis Suarez (8 matches), both of which took place before the new regulations came into force, there is an argument to say that Anelka will be looking at the minimum sanction rather than anything higher, due to the fact that his offence was singular, therefore more in line with the John Terry incident. However obviously this will depend entirely on the facts of the case as they come out. Due to the fact that the quenelle has been likened to a nazi salute, there is also an argument to say that this suspension may be higher.

If a guilty verdict is delivered, West Brom will then consider whether to appeal against the decision. Obviously the club will have more to take into consideration than just whether they feel the decision is correct or not however. As has been evidenced by Zoopla’s announcement that, in light of these events, they will not be renewing their sponsorship of the club, a deal which was the largest in the club’s history, there is more than just football at stake here. Although Chelsea and Liverpool both famously stood by their players following similar findings, we are talking about a player who is arguably less important to West Brom than the club captain was to Chelsea or star striker was to Liverpool. It will certainly be interesting to see what action the club do decide to take if the player is handed a lengthy ban, particularly in light of how much his actions have already cost them.

 

 

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Hamsard v Boots: Reasonable notice where a contract is silent on termination rights

You will often find the phrase ‘reasonable notice’ in termination clauses of contracts. Additionally, where a contract is silent (either due to the fact that a contract doesn’t exist, or that one does exist but it doesn’t specify what period of notice needs to be provided to terminate) it is implied into the contract that the period of notice given must be reasonable.

Despite this being entrenched into English law, cases concerning what period of time reasonable notice actually equates to in real life are relatively infrequent. It is therefore always interesting to hear what Courts have to say about this issue when a case does come along, such as in the matter of Hamsard v Boots, which was considered in December.

Hamsard designed, manufactured and supplied children’s clothing to Boots. This position arose as a result of Hamsard taking over a previous agreement between Boots and a former supplier who had ran into financial difficulty. Boots and the previous supplier entered a formal agreement in 2002 which led to a long term venture agreement in July 2007. This provided for a notice period of 18 months. However, when this company went into administration Hamsard inherited the contract. There was no formal written contract between Hamsard and Boots however, and when Hamsard also ran into financial difficulties Boots gave the company 9 months’ notice of termination in November 2009.

Hamsard issued a claim for damages against Boots, seeking to rely on the terms of the 2007 contract between Boots and the previous company, which provided for 18 months’ notice of termination. Boots defended the claim, claiming that 9 months’ notice was sufficient and that the 2007 contract simply provided a background to relations between the two. 2 main issues arose during the case, these being whether 9 months’ notice was reasonable and whether there was an implied term that the parties should at all times act in good faith towards each other, following a previous case – Yam Seng.

Mr Justice Norris found in favour of Boots and ordered that 9 months’ notice was indeed reasonable. He set out 5 principles as to what constitutes reasonable notice:

  1. What length of notice is reasonable depends on the particular facts of the particular case;
  2. The particular facts may involve a consideration of the general circumstances and practices of the trade in which the parties are involved;
  3. What is “reasonable notice” must be judged at the time when the notice is given;
  4. The circumstances pertaining at the time of the contract are also relevant; and
  5. An important consideration in determining what notice period is “reasonable” is the degree of formality in the relationship: the more relaxed the relationship the less likely it is that the law will imply a lengthy notice period.

Applying these principles to the matter being considered, Mr Justice Norris found that the parties contract into which a term of reasonable notice was implied was a short term, informal arrangement which had been put in place to ensure supply continued. He stated that there was no practice or custom of the trade to follow and that the 18 month notice period in the 2007 contract was irrelevant, as it had been negotiated in return for an extended payment period.

Further, Mr Justice Norris stated that Boots had a contractual right to terminate the contract on reasonable notice without consideration of any good faith obligations. It was stated that these could not be implied into the type of arrangement in place and did not reflect the intention of the parties.

The main position in relation to termination provisions remains unchanged, this being that it is always better to have clear clauses in any contract. Interestingly however, this case provides helpful clarity on the amount of notice to terminate that will be deemed reasonable and the relevant factors which need to be taken into consideration. This will be helpful for parties wishing to negotiate the length of time that a notice to terminate must be.

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