Deal Done – Everton Reaches Agreement as crucial deal for the Toffees in battle against Burnley sealed

Everton have enlisted Mark Howard KC to spearhead their defense in the compensation dispute with Burnley this summer. The prominent barrister previously represented the Toffees during their Profit and Sustainability Rules (PSR) hearing last year.

Burnley has initiated legal proceedings against Everton, alleging that their relegation at the end of the 2021/22 season resulted in financial losses, a campaign during which Everton violated PSR. The actual penalty for this breach was imposed the following season when the club faced a second PSR violation related to their 2022/23 accounts.

When Everton was found to have breached the Premier League’s PSR for the 2021/22 and 2022/23 financial years, five clubs—Burnley, Leeds United, Leicester City, Nottingham Forest, and Southampton—sought potential compensation.

This move was driven by the financial difficulties caused by relegation, or the threat of it, as dropping into the Championship significantly reduces a club’s revenue.

The PSR breach for 2021/22 initially resulted in a 10-point deduction, later reduced to six, while the 2022/23 breach led to a two-point deduction. Although both penalties were applied concurrently last season, they were treated separately from a legal perspective when clubs pursued compensation.

A two-point deduction in 2022/23 would have still allowed Everton to avoid relegation on goal difference, in a season where Leicester, Leeds, and Southampton were all relegated. These three clubs, along with Nottingham Forest, withdrew their appeals following the reduced penalty.

However, a six-point deduction in 2021/22 would have seen Everton finish with 33 points, placing them in the bottom three and resulting in relegation to the Championship. Burnley, who finished third-bottom that season with 35 points, are now pursuing compensation, with the case set to be heard this summer.

The Lawyer website first reported Everton’s appointment of Howard, with the hearing scheduled to take place at the International Dispute Resolution Centre for Arbitration and Mediation in London.

The same commission that initially imposed a 10-point deduction on Everton is also responsible for adjudicating compensation claims from aggrieved clubs. David Phillips KC, the commission’s chairman, previously stated: “I am satisfied that the applicant clubs have potential claims for compensation.”

Everton contested this stance, arguing that their appeal and the subsequent reduction in the points deduction were handled by a separate commission.

The amount of compensation, if any, that Burnley may receive remains a matter of legal debate between the two clubs. Given the lack of precedent in the Premier League, resolving this issue could take considerable time.