Posted by Dan Meadon-Bower, Partner
Success for football agent in claim against rival
Cut out of an unwritten transfer contract with a player, an agent succeeds with claim against a rival agent and football club for loss of the chance to be paid the agent’s fee.
In the transfer window of summer 2007, former midfield football player Gavin McCann (“the Player”) transferred from Aston Villa to Bolton Wanderers for £1 million. Bolton also agreed to pay an agent’s fee of £300,000 to Sports and Entertainment Media Group (“SEM”).
The Player’s former agent, Tony McGill, complained that he had entered into an oral contract with the Player and had arranged the transfer to Bolton. His position was that a written contract would have been signed by the time the deal was completed, as required by the Football Association regulations, but SEM had cut him out of the deal by entering into a written contract with the club, which approached the Player directly.
McGill had previously settled an initial claim against the Player just before trial and had accepted £50,000. McGill’s second claim against SEM and the club was that by them entering into a written contract with the Player, he had lost the chance to receive the £300,000 fee. He sought the balance of his losses to the extent that he had already recovered some of this from the Player directly.
Loss of chance
The loss of chance claim depended on whether, having accepted a settlement with the Player, McGill had settled the full measure of his loss so that he had no residual loss to recover from anybody else.
The wording of the settlement agreement between McGill and the Player was examined in detail and it was decided by the Court that there was no express wording in that agreement which prevented him from pursuing the balance of his losses in a claim against SEM and the club.
Further, the Judge commented that it was “only natural” for McGill to try and recover his loss from the contract breaker (i.e. the Player) first, before seeking to recover any unsatisfied losses from those alleged to have procured or conspired to procure the breach of contract.
It was held that McGill should be entitled damages on the basis of loss of the opportunity to earn a fee under a written agency agreement when the Player’s transfer to Bolton was completed. The court will now need to re-consider the evidence to assess the value of the opportunity that McGill has lost as a percentage of the original £300,000 fee, less the £50,000 he has already received from the Player.
By not entering into a written contract with the Player from the outset, McGill was always running the risk that he might be left high and dry if the Player refused to sign a written contract.
However, agents should be wary of ‘player pinching’ when entering into arrangements with players and clubs if there is another agent on the scene, whether there is any agreement in writing or not. SEM and the club now face having to make a substantial payment to McGill to compensate him for his lost chance, rendering their cut of the deal much less profitable.
It is also important to note that while the sums in issue are fairly substantial, all of the parties involved will have spent far more than the amounts being argued over in legal costs. McGill himself had spent over £150,000 reaching a settlement of only £50,000 with the Player and the costs of this second claim are likely to be far greater than that again. Royds Withy King are experienced in high value complex contract litigation and are able to provide pragmatic and commercial advice about the costs and risks of litigation.
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