First written for and published by LawInSport. Click here to view the original article.
Information is power, confidential information doubly so. The allegations made by Cardiff City, arising out of their loss to Crystal Palace in the Premiership that Crystal Palace had sought and obtained their team sheet before the required submission, only serve to underline this.
Cardiff have raised their allegations with the Premier League who, it is understood, are investigating whether there has been a breach of their rules. Presumably, if a prima facie case appears to be made out, the Premier League will take action under Section W, the Disciplinary Section of its rules (“Section W”). These embrace the potential disciplinary sanction of the deduction of points. Before considering the disciplinary rules in detail a broader view of the misuse of confidential information is appropriate.
Sport has its secrets and in a highly competitive environment it is not be surprising if others seek to gain access to that information. Add to that the value of confidential information when there is a betting market to exploit and one can hardly be surprised when allegations arise. Perhaps more surprising is the infrequency with which such allegations arise. If one casts one’s eyes across to the commercial environment, it has been suggested that the challenging conditions of the last few years have led to an increase in cases of the misuse of confidential information. In an article in theFinancial Timeson 19thApril 2014, it was said that there had been 58% increase in the number of claims brought in the English High Court alleging misuse of confidential information between 2011 and 2012. Unless sport is then an outlier, the infrequency of the allegations may suggest that the misuse often goes undetected.
There have been some notable examples of litigation arising out the alleged misuse of sporting secrets, see by way of exampleForce India Formula One Team Limited v Aerolab SRL and others, as discussed by Kerenza Davis on LawInSport3. Formula 1 is clearly a sporting activity where there is a high investment in technological development and the results of that investment will be closely guarded. The allegations in the Cardiff and Crystal Palace case underline, however, that confidential information may have a value in less technical activities.
This raises two issues: first, the practical steps that should be taken to secure the integrity of confidential information and, secondly, the legal steps that might be taken when it has been misused. The latter is, ultimately, a reactive exercise, and prevention is clearly better than cure. It is important for any organsisation to identify critical confidential information and ensure that it is treated as such. This will mean managing and controlling access to the information. There should be express contractual obligations in the contracts of employment of staff and with other persons who have access to the information.
If there has been a breach of confidence then, under English Law, it is possible to litigate the misuse of one’s confidential information by a third party. It is not sufficient that it is described as being confidential, it must “have the necessary quality of confidence about it, namely, it must not be something which is public property and public knowledge.” (Saltman Engineering Co Limted v Campbell Engineering Co Limited).Once the necessary confidence is established, then misuse by a recipient is actionable, if they knew, or turned a “blind eye” to its confidential provenance (Vestergaard Frandsen A/S v Bestnet Europe Limited).Injunctions are frequently obtained before the English Courts to restrain the use of the confidential information and to compel its delivery up and the destruction of all unlawfully held copies. Of course, damage may already have already been suffered through the misuse of the information, and so damages or an account and payment of the profits derived from the misuse may then also be ordered.
In a sporting context, quantifying loss may be a more challenging exercise than in a typical commercial case. How does one show what the consequences of the misuse are? Is it possible to show any more than the chance that a game would not have been lost had the information not been misused? The Courts are however accustomed to assessing damages on the basis of the loss of a chance and it remains the case that damages might be a sustainable head of loss in a sporting context.
Cardiff are clearly interested, if the allegations are found to be made out, in seeing Crystal Palace deprived of the points in a closely fought relegation battle. This is a possible outcome of engaging the Premier League’s disciplinary procedures to consider whether there has been a breach of its rules in Section W.
The Premier League, through its Board of Directors, has a wide-ranging power, under Rule W1, to inquire into suspected or alleged breaches of the rules. This includes the power to call individuals to appear before it or for the production of documents, W1 (although ultimately the sanction for a failure to do either of these things is that the conduct is in itself a breach of the rules). The Board has a summary jurisdiction to determine and punish breaches, as well as impose fixed penalties where those are provided for under the rules. The summary jurisdiction is limited to a fine not exceeding £25,000 or, in the case of a Manger, the penalty limit which has been agreed with the League Managers Association, W8. It follows that in a serious case the Board is likely to exercise its discretion to refer the matter to a Commission appointed by the Premier League under W21 or to refer the matter to the Football Association. If the Board exercises its summary jurisdiction then the club or person subject to the sanction may choice to have the matters referred to a Commission instead, W12.
A Commission is appointed from the Panel of potential members maintained by the Premier League, W14 and W21. A Commission will consist of 3 members, one of whom is legally qualified. The Board then presents the case before the Commission, based upon the presentation of a complaint, W25, which sets out a summary of the facts alleged together with the supporting documentation. The procedure envisages that, notice having been given, W27, the Commission, may exercise a power under W35.5 to award compensation to a person or a club because of a breach of the rules. In the case of a club, if, in the event they are not compensated, they may appeal that decision to an Appeal Board, W28. If having done so it remains the case that it is decided that they should not be compensated then W28 provides that they are not entitled to bring any claim for compensation arising out of breach of the rules. There doesn’t appear to be a power to appeal against the amount of compensation ordered, only against the failure to order compensation.
Faced with a complaint, a person or club may choose, within 14 days, to admit or deny the complaint. They may additionally ask for it to be dealt with by way of written representations, W29, submitting, in the case of a denial, the written representations they rely upon.
The Commission has the discretion to deal with the complaint in writing, W36.If it decides to deal with it by way of a hearing, then directions will be given for the hearing, W37 and W38. W38 includes wide powers to give directions for the hearing. As to the hearing itself, the Chairman has a wide discretion as to how to conduct the hearing, W43. It is clear though that it is intended to be an inquisitorial hearing, with witnesses giving evidence and being cross-examined. The hearing is conducted in private, W45, and the Commission may reach a majority decision, W47. In determining the complaint the Commission applies the “balance of probabilities” test, W46. Reasons for the decision, but not any minority decision if there is one, have to given, W50.
The Commission’s powers are wide ranging in the event of a complaint being made out, W53. These range from reprimand, through to unlimited fine and potential suspension of individuals, W53. In the case of clubs, they may be suspended or have points deducted as well as being fined. The Commission may also recommend the replaying of a match or the expulsion of a club. As noted above, it may also order the payment of unlimited compensation to another person or club.
A right of appeal lies against the decision of the Commission, as it does against the decision of the Board to impose a fixed penalty, W60. The appeal lies to an Appeal Board, consisting of 3 persons also drawn from the Panel maintained by the Board, W61. They of course had to have had no previous involvement in the original Commission decision, W62. The period for entering an appeal is 14 days, W66. The Appeal Board, again, has wide powers for the management of appeals and may reach a majority decision. On determining the Appeal, the Appeal Board has a wide powers including the power to increase, as well as decrease, the penalties or compensation which were ordered by the Commission, W76. The decision of the Appeal Board is final save that the application of Section X Arbitration under the rules is reserved.
Parties may choose to be legally represented before a Commission or an Appeal Board, but they must give at least 14 days prior notice of the identity of their representative’s, W79.
Finally, while proceedings are held in private, the Board, a Commission and an Appeal Board are entitled to publish reports of their proceedings and those bound by the Premier League rules are deemed to have consented to their doing so, W80.
It follows that if there is a case to answer then only if a Commission is convened could the outcome for Cardiff be the deduction of points from Crystal Palace.