Here we look at the topic of pursuing clubs for unpaid intermediary/agency fees.
The Brabners’ Sport sector have received an increasing number of instructions from FA Registered Intermediaries (Football Agents) who have experienced difficulty in obtaining payment from clubs for monies due to them under representation contracts, even in the absence of any dispute or denial about the payment which is owed.
If you attended our State of Play event on Thursday 28 March 2019 you will know that my colleague Andrew McGregor is passionate about improving the working relationship between Intermediaries and clubs, and our recent instructions are proof that it is commercially prudent for parties, especially the debtor clubs, to engage in sensible discussions as soon as a problem arises to avoid being dragged into time consuming formal arbitration proceedings and inevitably paying for an Intermediaries’ legal fees as well as the outstanding debt in full. In all of the cases recently where Brabners have issued Rule K proceedings for a debt due to an Intermediary we have obtained both payment of the debt and also recovered all of the Intermediary’s legal expenses from the club.
What is involved?
We have been instructed at different stages of disputes but we always recommend that Intermediaries attempt to contact the club and request payment as per the terms of their contract. We usually find that when attempts to resolve the dispute amicably have reached a dead end that Intermediaries seek our expertise and support in procuring payment.
Rule K arbitration is a dispute resolution process set out in the Rules of the FA to resolve disputes between “Participants”, the definition of Participants is wide and includes Intermediaries and clubs. The Rule K process is much more informal and less expensive than court proceedings that would otherwise be required to pursue clubs for non-payment. There is no fee to issue Rule K proceedings, meaning that it is still cost effective to pursue clubs for relatively small amounts with a lower cost risk to the Intermediary.
Once Rule K proceedings have been commenced with the FA an Arbitrator is appointed and a timetable is set for the parties to set out their cases for determination by the Arbitrator.
Our Approach
In some cases the clubs have completely failed to respond to our client’s, and our own, attempts to pursue the debt and settle any issues amicably and efficiently prior to the commencement of Rule K proceedings. Consequently (and completely unnecessarily), our client intermediaries are then forced to incur the time and expense of issuing formal proceedings. Despite the relative informality of Rule K proceedings formal documentation such as a Notice of Arbitration and Points of Claim, setting out the claim, is still required to initiate the process. This is where we can help.
The formal structure and procedural timetable of Rule K proceedings force clubs to engage in the process with the Arbitrator and show that the Intermediary is serious about pursuing the debt. To date, all of our clients have received payment of their debts before any disclosure or exchange of witness statements is required. The simple process of issuing Rule K proceedings is enough to force the club to take the Intermediaries’ claim seriously, as by ignoring the proceedings, the clubs will likely end up with an order of the Arbitrator made against them compelling them to pay the debt in full, interest and costs, which can then be enforced accordingly.
The ideal outcome
One of the reasons that we recommend the Rule K arbitration process is the fact that there is no issue fee. Due to our experience in pursuing these claims we are able to offer Intermediaries a fixed fee for pursuing an undisputed debt owed to them by a club under a representation contract. In most of the cases we have acted on so far we have successfully recovered these fees from the club as part of a settlement agreement and therefore there is no cost to the Intermediary.
If you have outstanding monies due to you by a club or would like to understand if we can help you with any other disputes you may have, please contact me at elke.kendall@Brabners.com, or another member of our Sport sector.
