With Premier League football clubs involved in high-profile disputes, Cameron Timmis looks at why litigation in sport is taking off and the niche law firms vying to offer advice


With many litigation practices going through a lean spell, at least one area – sport – continues to offer rich pickings. In the last month, two major football disputes have hit the headlines: Sheffield United’s challenge over the Premier League’s treatment of West Ham concerning the player Carlos Tevez, and Crystal Palace’s claim against former manager Iain Dowie regarding the release from his contract. With cases like these, just two of many in an increasingly litigious industry, it is little wonder that more and more law firms are eyeing sports litigation as a potential goldmine.



With the huge sums at stake in many sports cases, it is not surprising that more and more disputes are being contested, says Mark Gay, a partner at UK/US firm DLA Piper, which advised the Premier League in its dispute with Sheffield United. Another factor, he says is ‘an increasing lack of deference towards regulators’.



The Sheffield United dispute is a prime example, says Mr Gay. With the club likely to lose more than £50m – the difference between remaining in the Premiership and relegation to the Championship – challenging the Premier League’s ruling to fine West Ham over player registration issues rather than dock points was always ‘worth a punt’, even if the costs of doing so he claims were ‘astronomic’. Sheffield United, represented by City firm Denton Wilde Sapte, assembled a team of three counsel for the arbitration; the tribunal found against the club, which was then refused leave to appeal against the decision.



Another reason for the growth in sports litigation, suggests Bird & Bird partner Jon Taylor, is increasing disputes between governing bodies and players over who has the rights to the revenues generated by the industry: ‘[Often] it’s not hugely obvious who creates and who has a claim to the value that is created.’ As an example of this trend, Mr Taylor cites the number of ‘breakaway’ disputes between existing and new governing bodies in darts, snooker and basketball, among others.



Sports disputes fall into two camps, says Mr Taylor: those between individual players and their governing bodies, and those between governing bodies and third parties, typically involving rights protection. Bird & Bird, for example, has acted for the FIFA World Cup to obtain injunctions against ambush marketing companies and ticket touts.



Another growing source of sports disputes arises out of broadcasting rights. Recently, for example, the sports law group at national firm Hammonds, led by partner Stephen Sampson, brought the first case involving Internet piracy in sport, successfully securing summary judgment against an infringing party for illicit rebroadcasting of UEFA Champions League matches on the web.



As at most firms, a high proportion of Hammonds’ sports litigation work is football-related. The firm is currently acting for Heart of Midlothian in a landmark case against Wigan Athletic and Andy Webster concerning a new FIFA regulation over movement of players under contract but after the ‘protected period’ (north-west firm Brabners Chaffe Street is advising Wigan). ‘Obviously there is huge value in football and football players and the business of running a football club and disputes inevitably arise,’ says Mr Sampson.



A notable and distinctive feature of sports litigation is that few disputes are fought in court. The main reason for this, says Mr Gay, is that sports governing bodies want to protect themselves from large and potentially ruinous damages claims. He cites the 1992 case of American athlete Butch Reynolds as a watershed moment. The sprinter successfully sued the International Amateur Athletic Federation for $27 million in damages in a row over a drug ban – because of evidence which indicated the testing was flawed – although the case was eventually dismissed over jurisdictional issues.



‘The other reason of course is that arbitration tribunals sit in private,’ Mr Gay adds.



As a result, most sports governing bodies now stipulate in their rules and regulations that parties to a dispute are bound by an arbitration clause. Typically, a sports body will have its own internal arbitration procedure, and will allow an appeal to either the Swiss-based Court of Arbitration for Sport (CAS) or its UK equivalent, the Sports Dispute Resolution Panel (SDRP) – although both bodies will also hear first instance cases.



CAS has attracted a huge caseload in the past few years, averaging more than 200 submissions a year. ‘The vast majority of international governing bodies have recognised the CAS as the body to whom parties need to appeal,’ says Mr Sampson. Despite its status as the pre-eminent sports arbitration body, the solicitor notes that ‘it’s actually relatively economic. If you compare it to some other arbitration bodies, it’s not the same magnitude of costs… it provides justice in a relatively economic way’.



The SDRP is modelled on CAS and targets domestic sports governing bodies. ‘Frequently, matters are dragged through the courts at great cost and to no benefit,’ says recently appointed SDRP chairman Gerard Elias QC. ‘What we are aiming to do is make available to all sports in the UK the independent and cost-effective resolution of all sports disputes.’



Traditionally it is mostly involved with Olympic and amateur sports, but Mr Elias says the SDRP is also keen to attract more work from professional sports, and is now better placed following a recent revamp of the organisation and the appointment of new management board. ‘The West Ham issue was tailor-made for our services,’ he suggests. ‘We would be in a position to handle matters like that in a lower profile and, we guess, at lower cost.’



Most practitioners agree that sports disputes are better resolved by arbitration: ‘You get people who are experts in a sports-specific context,’ says Mr Taylor. ‘Although law applies to sport like anything else, there are specifics that need to be taken into account.’



In the past, says Mr Taylor, there was a danger of ‘rough, “banana court” justice’, but today he says that ‘most sports organisations are more mature. It’s becoming less of a problem’.



While the bulk of sports disputes go to arbitration, a number will still be litigated in court. In the recent case involving Mr Dowie’s departure from Crystal Palace, explains Mark Buckley, a sports partner at Fladgate Fielder who advised the south London club, the dispute consisted of a ‘simple common law claim for misrepresentation’ and not the type of claim that would ‘come under sports’ governing bodies disciplinary procedures’. It was also a resounding victory for the club: the judge, ruling in Crystal Palace’s favour, held that the Mr Dowie had deceived the club into releasing him from his contract by making ‘false representations’.



Some experts also foresee an increase in competition-related sports litigation following the recent European Court of Justice (ECJ) ruling in Meca-Medina, which upheld a ban on two swimmers following positive drug tests. While in the past the ECJ has applied an exemption from competition law for rules of a purely sporting nature, in Meca-Medina, says Mr Sampson, ‘the ECJ somewhat surprisingly said the vast majority of [sporting] rules and regulations have to comply with competition law’.



He says: ‘We haven’t seen the floodgates open but there is a greater possibility of that happening… international governing bodies have to accept, post Meca-Medina, that there is an increased risk of challenge before the ECJ.’



With burgeoning growth in sports disputes, it is no surprise that more and more firms have targeted this area of work. As well as large, well-established sports practices like Bird & Bird, Hammonds and DLA, a number of new niche firms have appeared in the last few years offering dedicated sports litigation expertise at lower fee rates.



‘The average sports bodies, clubs, businesses and professional sports people can’t afford the fees incurred by using big law firms,’ suggests Chris Walsh, a litigator at Onside Law, a London-based niche firm launched in 2005. ‘There is a big market out there for smaller clubs and bodies who need advice as much as the large ones.’



Spring Law, a boutique dispute resolution firm is also targeting sports litigation work, offering a service it calls ‘SportLit’. ‘The lawyers that target sports work are numerous, but whether they understand the sports market is another thing’ says Spring Law managing director Tim Perry. ‘You tend to get normal commercial litigators who haven’t brushed with sport at all’. As well as differentiating itself on price, Perry says his firm is also unusual in that it offers fixed fees for litigation. ‘If people charge by the hour at City rates, it’s fairly punishing,’ he warns.



But then again, with the stakes so high, for many in the world of sport nowadays, it is a price worth paying.



Cameron Timmis is a freelance journalist