Wigan Lose Points Deduction Appeal

Jeremy Moore – head of sports law

 

Wigan’s relegation from the Championship to League 1 of the EFL was confirmed yesterday when and independent arbitration panel ruled against their appeal.  Wigan were challenging the 12 point penalty imposed after the club were placed into administration by their owner, Au Yeung, only four weeks after he took control of the club. 

 

Under rule 12.3.2 of EFL rules, 

‘12.3.2 If a Group Undertaking of a Club becomes subject to or suffers an Insolvency Event, then the Board shall have the power to impose upon the Club a deduction of 12 points scored or to be scored in the League Competition.’ 

 

Whilst the decision will come as no surprise to most observers, it certainly leaves a bad taste in the mouth, particularly given the timing and circumstances of the administration, and the league’s own involvement in approving the new owners. 

In terms of the ruling itself, does the EFL have any discretion as to whether to impose the penalty of 12 points? Well contrary to common belief, the rules do allow an element of discretion to be applied. 

 

Rule 12.3.2 goes on to say, 

‘In exercising this power the Board shall have regard to all the circumstances of the case and to: 

(a) such of the provisions of the Insolvency Act, the Competition Act 1998 and the Enterprise Act 2002 as are relevant and then in force; 

(b) the need to protect the integrity and continuity of the League Competition; 

(c) the reputation of The League and the need to promote the game of association football generally; and 

(d) the relationship between the Club and the Group Undertaking.’ 

 

Certainly one might argue that pursuant to sub paragraph (d) the relationship between the Club and Group Undertaking was one where the Group had only recently taken over the Club, given financial assurances to the EFL and yet failed to comply with such assurances by putting the club into administration so soon after the takeover.  

Additionally, one can argue that the overall circumstances are such that the EFL have effectively punished the Club for its own failings in applying the owners and directors test; yet another illustration of the woeful inadequacies of the test in ensuring secure ownership of EFL clubs. 

The other matter in the mix which will dismay fans of both Wigan and other clubs effected is the recent 12 point penalty imposed on Sheffield Wednesday for breaches of its FFP regulations. Instead of applying the penalty to the season just concluded, which would have resulted in their own relegation, Wednesday’s penalty was imposed on their next campaign. 

Whilst the EFL’s insolvency rules are strict in terms of when the penalty should be applied on Wigan, the situation with Sheffield Wednesday is less clear in terms of why the penalty was delayed until next season, and does raise serious question mark in terms of the inconsistency of the application of penalties. 

Overall, another bad week for the EFL. 

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Jeremy Moore is a Solicitor and Partner in our Manchester office with a national reputation for his work in high profile and serious crime work, as well as assisting clubs and athletes in sports related matters.

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