Could someone take out a side contract on Sevco?

There is a basic wisdom in the belief that once lawyers are involved in something it usually gets worse.

However that is not always the case.

A leading international football lawyer contacted me after the Nimmo Smith judgment to offer some observations on the ruling.

He sent then me the details (all publicly available) of the various arbitrations that took place in the curious case of Carlos Tevez.

The bustling Argentinian was a West Ham player, but it turned out that he was improperly registered.

Apparently, some side agreements relating to third party rights had not been properly disclosed.

Sound familiar?

Sheffield United, relegated after a late surge from West Ham, took some umbrage with a player so registered making the difference between them staying among the riches of the EPL or falling to the relative poverty of the Football League. Ultimately they sued West Ham and got some £20 million.

The arbitration process in England found that:

“(1) West Ham had breached its contract with Sheffield by the terms on which they had contracted with Tevez and Mascherano and the way in which they procured their registration.

(2) Tevez was only able to play for West Ham because of West Ham’s breaches of the Rules.

(3) Tevez’s participation in the West Ham team was an effective cause of West Ham winning at least three more points than they would otherwise have won.

(4) Had West Ham not won those additional three points they would have been relegated instead of Sheffield and West Ham were, therefore, liable to Sheffield for its losses arising from relegation.”

My lawyer chap noted that Sheffield United’s actions faced some difficulties in their case – not least showing that one player in a team game made a crucial difference.

He told me that it would be much easier to prove a case if, say; most of a team on a given day were improperly registered.

We know that during the EBT decade that Rangers (1872-2012) most of their top earning players were being paid through the controversial tax avoidance scheme that required side letters.

This meant that the extent of their remuneration was deliberately not disclosed to the footballing authorities.

My learned friend believes that there may be a legal route for clubs that were beaten in cup ties or finished behind Rangers in the SPL during the years that the Ibrox club was operating the scheme. In legal terms football rules are a contract between the members of a league or organisation. So a breach of the rules could lead to a claim from a club damaged by such breach.

“This is not a frivolous case. There IS legal substance there – it is what we would call a statable case”

He continued “the only problem is that the legal entity to be sued is in liquidation”.

The grounds for a contractual claim would be based on both SFA and SPL rules.

He noted that any arbitration process might call for the disclosure of the famous “Five Way Agreement” entered into last summer that saw Sevco Scotland’s Rangers allowed into SFL3.

This would reveal whether or not Mr Green and his associates signed up to accept any football liabilities from OldCo.

Such a disclosure could possibly be ordered by any tribunal, whose powers would be backed up by a court order under the Arbitration Scotland Act (2010) if need be.

Such a legal move would not fall foul of the football authorities as it would be supporting an arbitration process that would be organic within football governance.

I asked him who would be the likely plaintiff in such a case and he said “any team that had finished below Rangers in the league during the time they were operating the EBT scheme also any team that lost to Rangers in a cup tie who could show that the EBT players made a sporting contribution to Rangers finishing above them or winning the tie would also have a claim.”

He also explained that the Nimmo Smith view that Rangers gained no sporting advantage would not be binding on any future arbitration, which could (as the tribunal did in the Tevez case) conclude that the contribution of the many EBT players had a sporting effect.

He had no doubt  that had the  club had not went into liquidation then there would have been several clubs petitioning the football authorities in Scotland about Rangers and their deliberate non-disclosure of payments to players.

This sounded to me like the £250,000 fine on OldCo i.e. symbolic, but no one was going to pay it.

Actually my lawyer chap demurred, not necessarily he said.

Although OldCo and NewCo are separate legal entities, the famous Five Way Agreement might yet make NewCo liable.

This is the document that sealed the deal whereby Duff & Phelps representing Rangers (IA), Charles Green’s Sevco and the three football authorities (SFA, SFL and SPL) all agreed that the new Rangers would be admitted to play professional football in Scotland.

The details of that agreement remain secret.

He noted that there was nothing to stop a series of football clubs who had played Rangers in the SPL or met them in cup ties from banding together to fund such an arbitration.

I ran this scenario past one SFL Chairman and he was very interested to explore this possibility further with an appropriately qualified specialist.

He thought there were a few clubs that would be willing to consider this course of action and share the cost of such an undertaking.

Of course the club that suffered most, in financial terms, from the success of Rangers in the EBT years was Celtic.

However, I do not detect any appetite for getting all litigious about this from the folks on Kerrydale Street.

There must be lots of people in Scottish football very grateful today that Fergus McCann is now a retired investor living on a pension.

Going after NewCo for OldCo’s crimes against football fairness wouldn’t be personal, it would be strictly business.

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