Key difficulties lawyers can face when trying to settle high profile sports employment disputes

Unlike most employees, those involved in sport do not always have the luxury of their performance and actions being assessed and discussed in a private meeting with their employer. They are often required to comment after every victory or defeat and can face intense media speculation about their future.

As such, when an employment dispute arises, it can prove difficult to keep it out of the public eye. Whilst the vast majority of employment disputes settle prior to a Hearing,¹ the publicity factor in sports-related disputes, together with a number of other factors, can make them more difficult to settle without a Hearing.

Accordingly, this article examines the principal difficulties that employment lawyers may face when trying to settle high profile sports employment disputes. To help illustrate the points, the article will draw upon the case of Dr. Eva Carneiro, the former Chelsea FC first team doctor, whose claims against the club and Mr. Jose Mourinho are, as far as we are aware, yet to settle (although it appears a judicial mediation has been scheduled for 7 March 2016 to seek to resolve matters²). The background to the Carnerio case and her potential claims can be read here.³

Press coverage of the events and ensuing dispute

Press coverage is a common feature of high profile sports employment disputes, and can be an important element in whether the claim can be settled without a Hearing.

The reason for this is that, in normal cases, both the employer and employee will usually want to avoid a Hearing, as the findings of a Hearing are public and each party will want to avoid the associated risks of negative publicity. This is true even if a party believes they will – and ultimately does – achieve a successful outcome, as media representation can still be skewed and can still linger. This generally incentivises both sides to try to settle before a full Hearing.

Where, however, the incident leading to the claim has already been played out live to the public (as we have seen in Carneiro case), such an incentive disappears. In these circumstances, having a public judgment confirming that the party did nothing wrong can be, or appear to be, the best way for an employee or an employer to overturn any negative public perception.

Although not sports related, a good example of this can be seen from the claim brought against Amshold Group Ltd by Stella English following her appearance in the TV show ' The Apprentice'.⁴ Having won the show, Ms English was given a contract at Viglen, from which she resigned after just five months. She was then found a role at YouView but also left this after a few months. Ms English brought a claim for constructive unfair dismissal alleging that the roles she had ben given were a sham and that she had been marginalised. Alan Sugar strongly believed that every effort had been made to integrate Ms English at both Viglen and YouView and that both were genuine roles and opportunities for her. Lord Sugar ultimately was not prepared to settle this claim and was determined to be vindicated by the Tribunal, which he was.

The value of the claim

If the claim is low value, there is little benefit to either the employer or employee in fighting it, as the legal costs involved will quickly become disproportionate to the amount in dispute. As the value of the claim increases, however, the costs of litigation reduce as a proportion of the disputed amount, thus making it a more tenable strategy.

Salaries and bonuses in top-flight sports can be relatively high compared to the national average. This, coupled with the widespread use of fixed term contracts and a relatively small market for re-employment, means that the value of claims based on loss of income can be substantial.

Having said that, under section 124 Employment Rights Act 1996, unfair dismissal claims are currently capped at the lower of a year's salary or £78,335.⁵ This means that there will need to be another head of claim (e.g. breach of contract or discrimination) in order to attract compensation that more fully reflects the extent the employee’s losses. Claiming under one or both of these additional heads is a common tactic even if the discrimination or breach of contract claim is not as strong as the unfair dismissal claim, as it can still act as significant leverage in the settlement negotiations.

For example, Kevin Keegan brought a breach of contract claim against Newcastle United in 2009 (albeit before the Premier League Manager's Arbitration Tribunal and not the courts) seeking around £25m in respect of loss of earnings to the end of his contract, and beyond.⁶ The claim didn’t settle and went all the way to a Hearing, and in the end he was awarded a mere £2m thanks to a liquidated damages clause within the contract.⁷ One can see from this example that in a high value claim, parties can have a far greater incentive to run with the dispute and risk a Hearing, rather than settle. This is especially true if their respective positions on an acceptable settlement figure are a significant distance apart.

In Carneiro's case, her annual salary is in the author's view likely to be well in excess of the statutory cap for compensation in unfair dismissal claims. However if she has also brought claims for discrimination, personal injury and aggravated damages (as seems plausible),⁸ and if these claims are successful, then her potential compensation will not be subject to the statutory cap.