The Sports Lawyer: ‘If QPR are deducted points, it is possible they could be deducted next season’

THE SPORTS LAWYER is actually a posse of Britain’s brightest lawyers, from the Sport & Media team at the UK law firm, Thomas Eggar, who will be contributing features, analysis and insight on a regular basis on the key sports law issues of the day. In TSL’s latest column, Andrew Nixon discusses the alleged breaches by QPR in the Third Party Ownership hearing and the implications of the potential outcomes.

By Andrew Nixon

3 May 2011

The hearing to determine the immediate future of Queens Park Rangers (QPR) started today at Wembley. The Football Association’s Independent Regulatory Commission will hear charges brought against the Club for an alleged breach of Third Party Ownership Rules as well as paying an unauthorised Agent in relation to the signing of Argentinean Midfielder Alejandro Faurlin in 2009.

The alleged breaches

Third Party Ownership is strictly prohibited under FA Regulations, put in place following the Tevez dispute in 2007, when West Ham were charged with concealing the true nature of the Player ownership. The prohibition, made in accordance with Rule C.1 (b) (iii), states that no Club may enter into an agreement with a Third Party whereby the Club makes or receives a payment to or from that Third Party as a result of, or in connection with, the registration of a Player.

The specific charge against QPR, which relates to the existence of an agreement between the Club and a Third Party in respect of Faurlin’s economic rights, would, if proven, be a breach of that regulation. The charges may also extend to a breach of the FA Agents Regulations, which were put in place to police and monitor Agents, but also binds Players and Clubs.

Clause H11 states that an Agent or Agent’s Organisation must not have, either directly or indirectly, any interest in relation to a Registration Right, which includes owning any interest in any transfer fee or future sale value of a Player. Whilst this Rule forbids Agents from having an interest in a Player’s registration right, the Club has a duty to uphold the regulations (Clause E1), and Clause J1 clearly stipulates that a Club must not use or pay an unauthorised Agent.

If the evidence goes against QPR, there could potentially be further breaches, including not having a valid Representation Contract in place (B1) and the more serious offence of failing to disclose arrangements (contractual or customary) with an Agent, together with details of the remuneration involved. There is also a ‘catch all’ clause under E3 of the Rules of the FA which states that no party under the jurisdiction of the FA should act in a way that is improper or brings the game into disrepute.

It is also not impossible that the Player could be brought within the charges, although there is no indication that the FA intends to do this. Players registered in England (as Faurlin now is) have a duty to uphold the FA Agents Regulations and not to facilitate the payment of (either direct or indirect) an unauthorised Agent (Clause I1 of the FA Agents Regulations), as well as a general duty of disclosure.

Comment

As set out above, if found guilty, QPR could find themselves in breach of a number of Regulations, and could face a sanctions of a fine and/or a points deduction. The severity of the penalty will depend on what comes out in evidence about the details of the Club’s arrangement, and their awareness of the involvement of an unauthorised Agent. Although it is assumed that a Club is aware of an Agent’s status because Clubs are obliged to ensure they are dealing with an authorised Agent, and if they are dealing with an overseas Agent registered to another national association, they are obliged to ensure registration with the FA takes places before any transaction, in this case a Fifa-licensed Agent was involved in the initial discussions which may well assist QPR from a mitigation perspective.

The decision in the West Ham case will obviously be brought into the equation, and it should be noted in that in this case there was no points deduction, principally on the basis that such a sanction would have consigned the Club to relegation, which was deemed to be unfair on the Club’s supporters. However, the situation is slightly different here because the Third Party Rules were brought in after the Tevez dispute, so a deduction cannot be ruled out. Indeed, it is possible that any deduction, if it is imposed, could pass over until next season, and QPR could start next season in the Premier League with a negative points balance.

Either way, one of the key issues will be the potential impact on other Clubs trying to secure promotion from the Championship. The considerable sums both Sheffield United (and to a lesser extent Fulham) lost out on as a result of the West Ham ruling will be recalled, as will the breach of contract claim Sheffield United brought against West Ham. Such a scenario cannot be ruled out on this occasion, and should QPR escape a deduction then Clubs who may have failed to reach the play offs as a result will obviously wish to consider their position, particularly in view of the huge financial windfall involved in securing Premiership promotion.

The hearing, and the subsequent decision by the Commission, therefore has a number of potential and wide ranging ramifications, and it is unlikely that a line will be drawn under this on Friday when the hearing is handed down. Indeed, should it go against QPR the likelihood is an appeal will be launched, a step that will have to be taken within 14 days of the ruling and to which the FA would have 7 days to respond.

Andrew Nixon is an Associate in the Sport and Media Group at Thomas Eggar.