Burnley have won their legal dispute with Everton after the Clarets sued them for breaching Premier League rules. The Blues have been ordered to pay compensation and interest of nearly £40 million, although Everton intends to appeal.
Background of the case
First published by Christian Smith, litigation editor of The Lawyer, the article claims that Everton, 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.
Legal basis of the claim
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 understood to be 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.
