Labour’s Proposals For Fan Ownership – Are They Credible?

The Labour Party’s commitment to legislate for partial fan ownership published today by Clive Efford, Shadow Sport Minister, is admirable for its intent but worryingly short on detail says Mike Dyer, Director of Portsmouth law firm Verisona Law .

Dyer said that “there is a tendency to think of Football Clubs as being somehow different from any other business organisation.” In many respects, perhaps they are, but the underlying fact is that they are companies and as such bound by Company Law in the UK.

The proposals do not seem to address the fact that fundamental changes would be required to the Companies Act 2006 surrounding (in particular) Shareholder rights.

For example, the proposed right for a Supporters Trust to appoint and remove Directors whilst only being a 10% Shareholder represents a significant departure from the present legal position.  As the law currently stands, a Shareholder with only 10% of issued shares would not have such a right unless there is a Shareholders Agreement in place (a document setting out various terms between Shareholders and regulating the voting rights on certain issues).

Without such an Agreement, a 10% Shareholder will be unable to pass the necessary resolutions to give effect to this “right” without new Company Law legislation.

I sincerely hope this proposal is not just a poorly considered populist vote catcher – but if it is to be treated as credible then significant further detail of the proposal is needed.

Mike Dyer

Director, Verisona Law

Football clubs are part of this country’s National Treasure and should be equally protected in Law

There is a law regarding Treasure Trove in this country, which says that certain items of unearthed treasure are of such immense historical, scientific or cultural importance to the nation that they must be saved from being lost, transferred, broken up or sold overseas.  The law says all such Treasure comes under the protection of the Crown to be saved for the nation. 

No matter that you found it on your property, that it was unearthed by archaeological excavation or by enthusiastic treasure hunter, an individual cannot profit from ownership of such treasure to the detriment of the nation.  Football clubs are of no less value to this country – being just as much part of Britain’s cultural heritage as the bones of Richard III or the gold and silver of the Staffordshire Hoard.  Why can’t they also be protected by law from being lost to the nation, sold to overseas investors or traded for profit, and then abandoned when the money runs out?

When the skeleton of what we now know to be King Richard III was disinterred in Leicester in 2012, or when the vast hoard of gold and precious metal dating from 600 AD was discovered in Staffordshire in 2009, there was no unseemly dash to assert ownership or to profit from the finds.  Yes, there were – and are – ongoing tussles over the most appropriate parish for Richard III’s bones to have their final rest and yes, the finders of treasure trove should be suitably recompensed for their efforts or plain good fortune.  But because we are a cultured people, we have recognised for many centuries that valuable items of antiquity – whether lost, buried or hidden with the intention of later recovery – belong to all of us and should be protected by the state for the enjoyment of all the generations.

If you will bear with the history lesson a little longer, the English law of Treasure Trove dates from as far back as the 11th century and it has naturally evolved over time.  So, whilst it may have been easy for Edward the Confessor and his ilk to claim title to all buried gold, silver, bullion or plate with the force of an army behind him, in later, gentler times it has often been necessary to amend or re-interpret the common law so that loopholes cannot be exploited to unjustly enrich finders or to allow national treasures to be sold abroad – or only saved for the nation by the payment of a high price.

And this is where the parallel between Treasure Trove and the nation’s Football Clubs becomes quite interesting.  In 1996 the Secretary of State for Culture, Media and Sport (you see where I am going with this) was forced to step in to enact the most recent change in the law – The Treasure Act 1996 – when two particularly valuable finds (the Sutton Hoo ship burial and a hoard of thousands of Roman coins found in Lincolnshire) did not precisely meet the definition of Treasure Trove and so ownership could not be claimed by the Crown, and there was a huge risk they would be sold abroad.  Effectively the Secretary of State said “To hell with that, if the law needs to change to protect what is of value to the nation, then the law will change.”  And so the law changed to encompass all such finds and the Sutton Hoo treasure was saved, although sadly it was too late to save the Lincolnshire coins.

There is no reason on earth why the same end cannot be achieved for an equally valuable part of our historical and cultural heritage, Football Clubs.  That is not to say that someone who invests in a football club should not be entitled to make a profit on their investment, or indeed accept full liability when it turns a loss; of course they must, that is the nature of the free market.  But there must be a clear distinction made between ownership of a Football Club and ownership of the shares in a corporate entity.

When an individual, family, consortium, investment fund or foreign prince acquires the assets and liabilities of an English Football Club, what they acquire in fact and in law is the corporate entity behind the club – whether that is Chelsea Village Plc or Hull City AFC Ltd.  But ownership of its shares should not confer “ownership” of the Club.

A football club belongs to its community, its town, its fans.  It belongs to its hundred years of history, its players, its moments of triumph and disaster, its goals, promotions, relegations, its chants and songs.  It belongs to the very ground it was built on.  It belongs to the nation’s cultural heritage, every bit as much as Treasure Trove.  No investor – however generous, however well-intentioned – should be at liberty to make changes to a Football Club’s location, name, club colours or emblems, or any other paraphernalia which are the essence of the Club, anymore than they should decide that the club will henceforth only play 7-a-side games on a Thursday afternoon or, at a whim, decide that they have had enough of the ephemeral joys of ownership and take their investment away, perhaps selling to the highest bidder, perhaps bankrupting the Club at its heart.

And the government can change the law, just as it did to protect buried treasure:  We can have a Protection of Football Clubs Act, which would not only protect the history and nature and status of all of this country’s historic Football Clubs, but also require Clubs to subscribe to a universal trust fund or bond arrangement, a sinking fund for when a Club finds itself in difficulty.  And the trustees of such fund would retain – along with the FA and Premier League – an audit responsibility to ensure compliance with the law, which should also reduce the chances of any Club going too far down the road to annihilation to be saved.

Let there be no more Wimbledon’s, Accrington Stanley’s, or Halifax Towns, no more Portsmouth’s or Leeds United’s, no more failed “fit and proper” regimes, no more investors claiming “I own this Club and can do what I like with it”.  Sir, you do not own the Club, anymore than the Chancellor of the Exchequer owns the contents of the Treasury.

I have a two hundred year old ash tree in my garden.  I enjoy its shade and its beauty, I spend a month every autumn raking up its leaves.  Every three years I have to apply for planning permission and engage a tree surgeon to give it a health check and prune its branches.  I would not dream of claiming to “own” that tree.  It belongs to the community and I am simply its guardian.  If the law of this noble country goes to such lengths to protect and preserve a tree, surely it is not too difficult to ask it to do the same for its Football heritage?

 

Liz Heade                                              

Web: thinkingwomansfootball.com

Twitter:  @T_WomansFootie

Footballers are employees, just like you and me – Blackstock’s injury claim highlights responsibility of clubs and players

Nottingham Forest striker Dexter Blackstock is seeking compensation from Seyi Olofinjana and his former club Cardiff City over a tackle which Blackstock claims was “negligent”.

The incident, in November 2010, during a league match between Forest and Cardiff, ruled Blackstock out for 15 months and he is now seeking damages for being deprived of the chance of earning bonuses for 15 months, as well as the right to further compensation if the injury ends his career early.

The decision to sue Olofinjana and Cardiff City demonstrates the difficulty of deciding if and when the courts will intervene in matters which have taken place on the field of play.

Instances of one professional footballer suing another as a result of injuries sustained during a game are not unheard of, though they occur only infrequently. Perhaps the best known example is the case brought by Paul Elliot against Dean Saunders when Elliot, playing for Chelsea in a game against Liverpool, sustained injuries following a tackle by Saunders.

These cases are relatively rare, not least because of the difficulty in demonstrating that any legal wrongdoing has occurred. It is a well-established principle that participants in games and sport have an obligation to avoid deliberately harming fellow players, and that they must not cause harm by behaving in an unreasonable manner. However the law of negligence, the chief basis on which claims of this type rest, has been applied in such a way that the context of any incident is taken into account.

In the course of an organised sport, such as football, the law makes allowances for the physical nature and pace of the game. The result is that behaviour which, in everyday life, would be regarded as unlawful is seen as legitimate. The courts are sympathetic to the notion that, in football and other contact sports, injury can and does result from physical contact occurring within the rules of the game. Even in the case of foul play, the courts will be slow to intervene where injury results from a reasonable mistake or misjudgement by a player; they accept that this is a part of the game.

There are also practical limitations on suits brought in this area. Given the context of physical and fast-paced sports like football, it will often be extremely difficult for a claimant to demonstrate to the satisfaction of the court that any injury was a result of deliberate or unreasonable behaviour, rather than a consequence of a legitimate mistake or misjudgement. The result is that it is usually only in the more extreme cases that liability can be shown.

Blackstock’s decision to include Cardiff City in his claim reflects the principle that an employer may be held vicariously liable for the negligent behaviour of an employee. As long as an employee is acting in the course of their employment an employer will be liable for their negligent acts. This is of particular practical import, because the club will, in most circumstances, be in a better position than the player to pay any compensation that may be awarded.

Given the sums that can be awarded, this ability to pay is significant. In 2008, Manchester United trainee Ben Collet was awarded damages of £4.3m in respect of a career-ending tackle in a reserve game against Middlesbrough. Were he successful in his claim the sums involved in Dexter Blackstock’s case are likely to be less but, given the finances involved in football, even in the Championship, the claim is likely to be substantial.

Simon Boyes, Nottingham Law School, Nottingham Trent University

Simon Boyes is a principal lecturer at Nottingham Law School, part of Nottingham Trent University. He researches, writes on and teaches sports law. Simon tweets on sports law issues from @themightytree