Premier League could be made to pay ‘eye-watering’ legal bill for Man City case – even if they win

The Premier League’s case against Manchester City, which goes ahead in private hearings later this month, could cost clubs tens of millions of pounds that will not be recoverable – after the league failed in an appeal to make Everton pay £4.9 million for its case.

The Premier League was awarded just £1.7 million in costs over its successful prosecution of Everton for a breach of its profit and sustainability rules [PSR] last year which incurred a 10-point deduction reduced to six on appeal in February. In a hearing in May, the details of which have now been published by the Premier League, it appealed the original commission decision to award it only £1.7 million of costs.

Yet Everton successfully argued that it was not liable for what its general counsel, Celia Rooney, described as “frankly eye-watering” costs. The implications for the case against City are significant, regardless of the outcome. The case has taken many more hours for the Premier League in-house and external counsel as they have sought to deal with City’s objections.

The appeal verdict demonstrated the staggering legal resources lavished on these proceedings – for the Everton case the chargeable hours were equivalent to almost five months’ worth of 24-hour days. All costs for governance are borne by the Premier League’s 20 shareholders, and will be deducted from disbursements of central broadcast rights and commercial funds.

In the appeal verdict over Everton’s PSR case costs, the Premier League counsel Jason Pobjoy argued that “the club’s unreasonable conduct in the proceedings unnecessarily and significantly increased” costs for the Premier League. He also argued, according to the appeal judgement, that the denial of costs to the Premier League would create an “uncertainty” in future cases.

For Everton, Rooney argued that the Premier League had paid above standard hourly rates for its legal work including much of the £948,000 spent on disclosure and the £446,000 on witness statements. The Premier League spent £26,638 per document compared to £515 on Everton’s side. The Premier League paid an hourly rate of £940 to partners from its external legal firm Linklaters which was nearly twice the £550 paid by Everton to its equivalent.

Appeal verdict a blow to Premier League

The appeal upheld the original commission cost award to the Premier League of £1.7 million. “The sum is in line with what would be regarded as reasonable and proportionate… in the High Court,” the appeal board, chaired by former appeal court judge Rt Hon Sir Gary Hickinbottom, said in its verdict.

Everton’s appeal against the original 10-point deduction was made on nine grounds upon which it failed in seven. On that basis the Premier League sought 70 per cent of its costs for that appeal. The appeal board disagreed. “We consider that the club clearly “won” the appeal,” it said. “The club’s appeal was allowed, and its points deduction was reduced from 10 to six.”

Everton had originally argued last year that it had not been in breach of PSR, permitted losses over three years of £105 million. It later revised that verdict on the eve of the hearing to concede a £9.7 million breach of the threshold. The Premier League case, that was accepted by the commission, was that the breach was greater, a total of £120.8 million rising to £124.6 million.

Everton were deducted a further two points in April for a second separate PSR breach which took their total deduction for the season to eight points. There is an outstanding case over £6.6 million that was not considered as part of the original PSR breach which could lead to a further points deduction. The Premier League was ordered to pay the costs for its appeal on the costs of the original PSR case.