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Almost a year since the case was heard before an FA Regulatory Commission, the final decision in the case of The FA v Massimo Cellino has been published.

Last December 2016, Leeds United FC, its former Chairman Massimo Cellino, and the football Intermediary Derek Day were all charged with various breaches of FA Regulations. The case related to the transfer of Ross McCormack from Leeds to Fulham in July 2014 for £10 million. It transpired that an Unauthorised Agent, Barry Hughes, had been involved in assisting Leeds obtaining such a good fee for the player. Mr Cellino, then new to English football, had been approached by Mr Hughes who told him that he would be able to get Leeds a fee of £10 million in return for a fee to him of £250,000.

At the time of the transfer Leeds had employed a former FA compliance officer, Graham Bean, to ensure the correct paperwork was signed off in relation to transfers and associated football business. Neither Mr Cellino, nor it appeared Mr Bean, or anyone else at Leeds, was aware Mr Hughes was not authorised to carry out Agency Activity during the deal. When he later sent in an invoice for his commission there was an argument about whether and how Leeds could pay him. The Commission found that Mr Bean suggested the payment be via a Consultancy Agreement with an Authorised Agent, Mr Day, and that was how the payment was made.

Mr Cellino and Mr Bean subsequently fell out, with the latter being dismissed from his job. At that point, Mr Bean turned whistleblower and informed The FA of the nature of the transaction.

The Regulatory Commission decision

The original FA case against Leeds, Mr Cellino and Mr Day focussed on the allegation that all the parties knew that Mr Hughes would not be paid because he was an Unauthorised Agent, and they thus became involved in a ‘sham’ consultancy agreement to hide the breach of The FA rules (engaging and paying an Unauthorised Agent) from The FA. But at the hearing it became clear that Leeds and Mr Cellino were not aware of Mr Hughes’ status or that he could not be paid because he wasn’t registered with the FA. Mr Bean, the person responsible for checking who was registered, did not appear to realise Mr Hughes was not permitted to act as Agent at the time. Nobody advised Mr Cellino he could not be dealt with. Leeds were liable in any event, since ignorance of the status of an Agent cannot be a defence for a Club, and so it, along with Mr Day, pleaded guilty. But Mr Cellino pleaded not guilty of misconduct on the basis he did not know that there was anything wrong with the arrangement, and to be personally guilty of misconduct he must have known he was breaking the rules.

The Regulatory Commission found against Mr Cellino, their decision on liability was upheld on appeal. They found that Mr Cellino must have known the agreement suggested by Mr Bean by which Mr Day was paid for Mr Hughes’ services (at least in part) was a ‘sham’, and therefore he had been guilty of misconduct. The fact that it was not clear what Mr Cellino must have thought it was necessary to hide from The FA did not prevent this finding.

The Regulatory Commission went on to impose particularly stringent and largely unprecedented sanctions against all of the parties. Leeds were originally fined £250,000, as was Mr Cellino, but he was also banned from all football activity (including being a director of a club) for 18 months. The original ban appeared to exceed the jurisdiction of The FA itself, purporting to ban Mr Cellino from being a director of companies The FA has no control over – but The FA subsequently agreed to amend this part of the Commission’s decision. Mr Day was banned from conducting any form of Agency Activity (his sole livelihood) for 7 months (and for a further suspended period), and ordered to pay a fine of £75,000.

The decision of the Regulatory Commission dated 5 December 2016 can be found here.

The FA has also published a separate decision of the Commission (dated the same day) on an application by the parties to re-open proceedings following disclosure of the fact that Mr Bean had demanded The FA pay him a “consultant fee” in respect of the evidence he provided against Mr Cellino, that can be found here.

The first appeal

Leeds and Mr Cellino appealed and their original appeal was heard in January 2017. Leeds’ fine was reduced to £200,00 and Mr Cellino’s to £100,000 - a total reduction in fines of a substantial £200,000. Mr Cellino’s ban was reduced from 18 months to 12 months.

Mr Cellino then challenged the decision against him by way of an FA Rule K arbitration for a number of reasons, one of which was that one of the members of the original FA Appeal Board, which is supposed to be an independent body, was a member of The FA Council, its ruling body, and was thus not independent.

The second appeal

The FA agreed (without admitting liability) to set aside the decision of the original Appeal Board and allow Mr Cellino a new appeal before a fresh panel, that was heard in June and made its decision in October 2017. Their decision is published here. In summary, they rejected the main thrust of the appeal, that there was no basis for finding Mr Cellino liable for the offence, but they did reduce the sanction imposed upon him to 12 months and the fine to £100,000.

Commentary

The case is interesting for a number of reasons. First it shines a light on practices that many have suggested are common in football, the payment of agents’ fees via unrelated consultancy agreements. Most of these go unnoticed and are not investigated. Mr Cellino, however, was very much within The FA’s sights at the time, having been banned previously by the Football League. He was a controversial figure in English football and it was perhaps no surprise, when Mr Bean handed The FA the evidence it needed, that The FA decided to “throw the book” at a football director when in the past it had only charged football clubs for similar offences.

The way the Regulatory Commission reached its decision was controversial. Many of the central allegations made by The FA’s witness, Mr Bean, were rejected, and he himself was the subject of particular criticism by the Commission, not least following demands he made to receive a fee for his evidence. Yet the Commission, despite finding Mr Bean’s role in the affair was “unedifying” and his evidence often “unsatisfactory”, decided it preferred that evidence to Mr Cellino’s when it came to the key issues.

The approach to sanction is also interesting. In the past football club chairmen or directors have not been individually charged and sanctioned for rule breaches in relation to payment of agents by clubs they control. The FA decided to take a different approach towards Mr Cellino and that was further reflected in the sanction. The Commission found that a fine was sufficient to punish Leeds for the breach and there was no need for a sporting sanction (i.e. a ban of some sort, a transfer embargo or a points deduction), in part because there was no suggestion Leeds obtained a sporting advantage as a result of the breach (the usual reason for a sporting sanction). Yet Mr Cellino was subjected to a very lengthy sporting sanction for the exact same breach. It is hard to find an explanation for that inconsistency in the decisions of either the Regulatory Commission or the Appeal Panel.

The length of the bans should also be noted by those involved in football. Banning an agent for 7 months and a club director for 12 months (on appeal) for being involved in an agreement which does not reflect the real reason for a payment, when none of them appear to have understood the real reason would make the payment contrary to FA regulations, is a new high standard in sanctions. If this is not an exceptional case, turning entirely on the facts and personalities involved, it would suggest far lengthier bans for agents and directors who know they are dealing with Unauthorised Agents. That in turn would lead to sanctions far longer and more stringent than any before, and increase the danger of material inconsistencies and disproportionality in the FA’s approach – a system that is exasperated by the fact that Commissions have almost unlimited discretion to impose whatever sanctions they want.

Hard cases often make bad law. Mr Cellino was a highly controversial figure in English football, as is, for other reasons, the footballer Joey Barton who the author represented at a hearing during the same period and who was also subjected to an unprecedented 18 month ban reduced on appeal to just over 12 months. Whereas FA rules make clear what happens if a player gets a red card, or tweets something racist, the danger with giving Regulatory Commissions unlimited discretion to impose whatever sanctions they feel like in other cases is that they can end up being wildly inconsistent with each other, and so are perceived by many to be coloured by attitudes to the personalities involved rather than the nature of the offences themselves. That cannot be good for the integrity of the process.

But perhaps the most important lesson to come from the proceedings is one that the reader shall not find mentioned in any of the published decisions, but explains why this matter has gone on for so long, and needed two separate Appeal Board hearings. The FA’s past habit of allowing FA Council members to sit on Regulatory Commission and Appeal Boards, which are supposed to be independent from The FA, is perhaps one of the most obvious ways in which The FA’s disciplinary process lacks the sort of fairness and transparency football in the 21st century expects. It has long been suggested by some commentators that the practise is inconsistent with fundamental principles of natural justice and the common law - not least since decision in R (Kaur) v Institute of Legal Executives Appeal Tribunal [2011] EWCA Civ 1168 where the Court of Appeal quashed a decision of the appeal tribunal of ILEX because the tribunal had an Ilex Council member on it. To the author’s knowledge nobody previously challenged this habit in The FA until Mr Cellino did. The FA’s decision to compromise the challenge rather than allow an independent Rule K panel to determine it means the issue remains at large so far as football is concerned. But it is hoped that as part of the institutional reform The FA is embarking upon it shall recognise the habit is no longer fitting for a modern transparent and fair disciplinary process. Mr Cellino may have given one final, unexpected, legacy to English football.

Nick De Marco represented Mr Day, Mr Cellino and Leeds United at different stages before the Regulatory Commission and, led by Ian Mill QC, represented Leeds and Mr Cellino in the appeals. Shane Sibbel was junior counsel for the FA at the second appeal and Charles Flint QC & Jane Mulcahy QC were members of the second Appeal Board.

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Staff