Everton had an appeal upheld that meant they were not to be liable for the full legal costs for the PSR case
It proved to be a small victory for Everton earlier this week. For the Premier League, failing to have the Toffees pick up the legal tab sets a concerning precedent for English football’s top tier.
On Wednesday it was confirmed that a commission appeal board had upheld an Everton appeal against having to pay the full £4.9m in legal costs that the Premier League had been seeking in relation to the profit and sustainability rules (PSR) case that covered the first breach of PSR for the 2021/22 financial year, and resulted in Everton being deducted 10 points, reduced to six on appeal.
Instead, the Premier League remain on the hook for £3.2m of the legal fees related to the case, meaning that Everton will have to factor in £1.7m in terms of their own legal bill.
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Everton successfully argued that they should not be liable to meet the £4.9m in costs the Premier League were seeking, with the club’s general counsel, Celia Rooney, describing the costs as “frankly eye-watering.”
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The appeal verdict highlighted that for the Everton case the chargeable hours were equivalent to almost five months’ worth of 24-hour days.
The Premier League spent £26,638 per document compared to £515 on Everton’s side. The Premier League also paid an hourly rate of £940 to partners from its external legal firm Linklaters. That is a sum almost double the £550 paid by Everton to its equivalent, the firm Pinsent Masons.
Everton and the Premier League have a challenging relationship. A shareholder and member of the Premier League since its inception in 1992, the Toffees were hit with two separate points deductions last season for PSR breaches that occurred over two separate financial years. The two remain in a legal tangle over the £6.6m in interest payments related to the new stadium at Bramley Moore Dock that Everton believe should be deducted from their PSR assessment.
But the Everton legal decision is likely to have expensive ramifications for the Premier League at the worst possible time, as the League gears up for a battle with another one of its member clubs, Manchester City, over the 115 charges against the current champions alleging breaches of financial regulation, not related to PSR, for more than a decade.
With City hiring some of the finest, and most expensive legal minds in the business, including Lord Pannick, who has been reported to charge as much as £5,000 per hour, it is set to be a hugely costly legal battle. With such wealth behind them, Manchester City are expected to spend what it takes when it comes to their legal counsel to give themselves the best chance of clearing their name, with City chiefs repeatedly stating that they expect to do just that.
It is a legal bill that will run into the tens of millions, and it is one that will be hugely expensive for the Premier League whether they win or lose.
The Premier League’s general counsel, Jason Pobjoy, with one eye on the precedent that could be set with regards to who foots the legal bills for such matters moving forward, and to what degree, stated in the appeal verdict in the Everton case that the verdict would create “uncertainty” in future cases.
While that may sound like one in the eye for the Premier League, an organisation that is not held in the highest regard by many Evertonians given the perceived injustice that the club suffered in relation to its PSR case, any major legal bill will ultimately impact all clubs on some financial level.
All costs for governance are borne by the Premier League’s 20 shareholders, which are its member clubs, and will be deducted from disbursements of central broadcast rights and commercial funds.
That means that the size of the legal bill that the Premier League faced would see the amount of money in the pot for central payments decrease by that sum as a result, meaning slightly less arriving into the coffers of member clubs.
But such a decision will likely also make the Premier League look more closely at its own rules and regulations to ensure they are watertight after being embarrassed by Leicester City this past week, with the Foxes avoiding a penalty deduction by following the letter of Premier League law, allowing them to prove that they were not members of the competition when their PSR breach was said to have occurred due to being relegated to the Championship.
It has not been a good week for those behind the world’s biggest, most lucrative, and most popular domestic football league.