For years, football fans have awaited the outcome of the most significant regulatory case in English football history. Although the decision in the Manchester City proceedings has not yet been formally published, widespread reports suggest that the substance of the verdict has already entered the public domain, with Manchester City reportedly found guilty of the majority of the charges brought against it. 

Attention has now shifted from liability to remedy: who may be entitled to claim for losses resulting from Manchester City’s alleged conduct?

Who May Be Entitled to Compensation?

While much of the discussion has focused on potential claims by rival football clubs, the pool of potential claimants may be much wider.

Manchester City’s compliance with the Premier League's financial rules, its squad, spending and on-pitch performance may have led to very different results. Had football taken a different course between 2009 and 2018, the knock-on effects could have been substantial. 

Potential claimants could include:

• Rival clubs that finished behind Manchester City in league or cup competitions.
• Clubs that missed out on titles, European qualification or prize money.
• Relegated clubs that may have remained in the division.
• Players whose contractual bonuses depended on league position or qualification for European competitions.
• Betting operators or those who placed bets who can demonstrate a loss arising from distorted sporting outcomes.
• Commercial counterparties, sponsors, advertisers and anyone else whose rights, obligations or revenues were linked to the sporting performance of Man City or another affected club.

The Legal Challenge: Proving Causation

Any claimant must prove causation, namely that Man City’s breaches caused it to suffer loss.

In practice, this requires the court or tribunal to consider a counterfactual scenario: what would have happened had Manchester City complied with the rules?

Would the club have signed the same players? Achieved the same results? Won the same trophies? Would another club have qualified for the Champions League, won a title, secured European football or avoided relegation? 

Although these questions are necessarily hypothetical, the starting point will be that any financial breaches found by the process gave City an advantage. Demonstrating that this advantage translated into a specific financial loss is the more complicated step.

The Significance of the Burnley Compensation Award

The recent Burnley compensation award against Everton has materially altered the landscape.

Burnley successfully argued that Everton's breach of the Premier League's Profitability and Sustainability Rules conferred a sporting advantage which contributed to Burnley's relegation and the financial losses that followed. Although the decision remains under appeal, it suggests that tribunals may be prepared to take a practical and realistic approach to causation, rather than demanding impossible standards of proof. For potential claimants considering actions arising from the Manchester City proceedings, that is an encouraging development.

Which Clubs May Have Strong Claims?

Much will depend on the particular season and the nature of the alleged loss. Potential claimants may include:

• Clubs that finished immediately behind Manchester City in title races.
• Clubs that missed European qualification places.
• Clubs that suffered relegation.
• Clubs that were knocked out of domestic or European competitions by Manchester City. 
• Clubs that can identify specific financial losses arising from altered league positions.

Not every club affected by Manchester City's participation during the relevant period will necessarily have a viable claim. As always, the critical question will be whether a sufficiently direct causal link can be established between the alleged breach and the alleged loss. For example, a club that missed out on European football by a single point is likely to have a far stronger claim than one that finished 20 points short, where the alleged breaches are much less likely to be said to have made the difference.

Timing

Any compensation claim is likely to be influenced by the ongoing appeals process. While reports suggest that findings have been reached, Manchester City is widely expected to appeal and the regulatory proceedings remain far from concluded.

That does not, however, mean potential claimants should remain passive. It may be some time before there is final certainty regarding the underlying findings, but potential claimants should begin assessing their position now.

Why Potential Claimants Should Act Now

Relevant documents, financial records and expert evidence rarely become easier to obtain with the passage of time.

Potential claimants should already be considering:

• Historic league performance and finishing positions.
• Lost prize money and broadcasting revenue.
• Missed European qualification opportunities.
• Commercial opportunities linked to sporting success.
• Any limitation issues that may arise.

In large-scale disputes, there can be a significant advantage to acting early. Those who move first are often best placed to preserve evidence, shape the direction of any litigation and ensure their claims are considered at the earliest opportunity.

We Would Welcome Discussions With Affected Parties

Our team is actively assessing potential claims arising from the Manchester City proceedings and would welcome discussions with clubs and other parties who believe they may have suffered financial harm as a result of the alleged breaches. 

We would be happy to discuss, on a confidential and no-obligation basis, the merits of any potential claim, the evidential requirements, funding options and the practical challenges of establishing causation and loss.

If you think you may have a claim, please contact David Greene (David.Greene@edwincoe.com) and Sam Harris (Sam.Harris@edwincoe.com).