Mods, this has been a request on and off in the 115 Charges thread for some time. Feel free to move but I thought it might warrant a thread of its own. The idea here is that the information is essentially factual with very little/no opinion thrown into the mix. There are also some significant simplifications where technical legal/accountancy matters are concerned.
Why 115 Charges?
There are not 115 wholly different charges. There are essentially three charges:
- City overstated their revenue
- City understated their expenses
- City have failed to comply with various regulatory requirements
The first relates principally to the allegation that the sponsorship from Etihad and Etisalat was in fact disguised equity funding from ADUG
The second relates to the Al Jazira ‘second contract’ for Roberto Mancini and image rights players for (IIRC) Yaya Toure in particular
The third includes a series of allegations that we have not complied with the PL’s FFP rules, UEFAs FFP rules and the PLs requirement that we should co-operate with an ongoing investigation.
It is however alleged that each of these alleged offences is committed across multiple seasons. One separate charge relates to each instance of alleged wrongdoing over each of the 10 seasons or so that the charges cover.
If you want an analogy, imagine you drove from London to Manchester at a steady 100mph and got caught by 12 speeding cameras. Each represents a separate charge, but they are different aspects of the same basic allegation.
Do these allegations amount to fraud?
The allegations that we have knowingly misrepresented the accounts across multiple seasons are tantamount to allegations of fraud. This is because the allegation is that City's directors signed off accounts knowing that they did not represent a true and fair view of City's finances. That is an offence under the Companies Act. So while the PL have not accused us outright of fraud, the conduct they are alleging against the club would, if proved, amount to fraudulent conduct.
"I'm not saying you're guilty of arson, but I saw you set fire to your own house."
Moreover, it is inherent in the charges that other companies who have included the amounts of (say) the sponsorship deals in full must have conspired with City to ensure that the true figure was artificially (and dishonestly) inflated. Or, in the case of Al Jazirah, that the employment contract with Mancini was a complete sham. This too is essentially an allegation of fraudulent conduct.
The allegations of regulatory breaches (eg non-co-operation) are not fraudulent in their nature.
What is the standard of proof?
The standard of proof applied by independent panel will be the balance of probabilities. This means that the tribunal will need to consider whether it is more likely than not that City have committed the conduct alleged against them.
However, because the allegations are serious, the evidence which it would take to satisfy the panel to that standard would need to be correspondingly cogent. It is inherently unlikely that the boards of several large companies would all conspire to commit several legal and regulatory breaches, so to satisfy the panel that this is what actually happened, the evidence of that will need to be particularly cogent.
What is the evidence relied on by the PL?
The PL investigation was opened very shortly after the UEFA investigation, and appeared to lie dormant while the case with UEFA/CAS ran its course. It is not known that there is any more evidence available to the PL than was available to UEFA, namely the Der Spiegel leaked emails.
That said, the PL pursued numerous disclosure applications against City which were successful. We simply don’t know what further evidence there may be.
Are any of the allegations time-barred?
Yes. UEFA’s FFP rules had a 5 year time-bar, which had expired in the case of some of the charges. There is no similar time-bar under the PL’s rules but the relationship between City and the PL is essentially that they are both parties to the same contract. English law says that you have 6 years in most cases to bring a claim for a breach of contract.
The charges were brought at the beginning of 2023, so on the face of it, a lot of the claims relating to anything preceding season 16/17 will be time-barred. However, there is a principle that if the breach of contract was knowingly concealed, that six year period will begin not when the breach actually occurred but when the complainant became aware of it (or, if earlier, should reasonably have become aware of it.)
So the question of the seriousness of the charges and the question of what is time barred go hand in hand. The negative, from City’s point of view, is that the time-bar is not necessarily a complete defence to the more historic charges (which is actually most of them). The positive, from City’s point of view, is that to succeed on the most serious charges, cogent evidence will be needed to show that City have committed the breaches alleged. If that evidence is not there, the charges will fail and would be time-barred anyway.
Are City in danger?
It depends on how you define ‘danger.’ Based on the evidence that exists within the public domain (eg the evidence in the 'opens skies' case in the USA) it is very difficult to see how the PL can possibly succeed, at least on the most serious charges. The non-co-operation charges may be less difficult to establish, not least because City took the PL to the courts in a number of respects.
That said, (a) we don’t know what (if any) further evidence the PL may have, and (b) one possibility is that the PL are pursuing us precisely because they think the evidence they can point to will be sufficient to make the charges stick.
What is certain is that if the charges are proved, or substantially proved, the sanctions applied against City would be very very serious. Everton have had a points deduction of 10 points on the basis of one admitted allegation of breaching FFP in one season. If the charges are proved, it is difficult to see that anything short of relegation (whether by means of a massive points deduction or otherwise) AND a massive fine would meet the justice of the case.
If the non-cooperation charge alone was proved but all the others were dismissed, I would anticipate a fine. A points deduction for a non-co-operation charge would in my view be somewhat disproportionate.
Can City appeal to CAS if they lose?
No. There is however a right of appeal to a further Independent Panel. They would not be starting again and looking at all the same evidence from the beginning, however, they would be concentrating on whether the first panel have made an error of law or arrived at a decision that is perverse on the evidence before the first panel.
Thereafter there is no further appeal but there is a right of further legal challenge based on errors of law,
As a practical proposition it is unlikely if City lose at the first stage and their appeal is also dismissed, that (unless both panels have got it disastrously wrong) that there would be much prospect of success in a further legal challenge but you never know.
If fraud is alleged, why haven’t City been charged by the criminal authorities?
It would have been unusual for (say) the Serious Fraud Office to commence an investigation in a case like this where what is alleged is a breach of the PL’s internal rules. However they tend not to announce it from the rooftops when they are commencing an investigation, especially if that would result in (for instance) evidence being destroyed.
If the charges are proved (and there is no appeal), it is quite probable that a criminal allegation would be launched. Given how high-profile this case is, it would be difficult for the SFO to resist the pressure to launch their own investigation.
However, the standard of proof in a criminal case is even higher – it is beyond reasonable doubt – and the age of some of the charges means that it would be very difficult to persuade a jury that the accounts signed off 12 or 13 years ago were knowingly/fraudulently mis-stated. Moreover, if City lost it is almost inevitable that there would be an appeal, which would mean that the events in question were even more historic.
Never say never, but criminal charges seems very very unlikely even if the PL charges are successful.
EDIT #1
Added in answer to a separate question
Who sits on these panels?
About five years ago the PL established a panel from whom the members of any independent disciplinary commission will be appointed. There are about 12 members of the panel. In practice they tend to be practising KCs or retired judges. The chair of the panel is Murray Rosen KC. That does not mean he sits on all the independent commissions or that he will sit on City’s. (Though he might.) Usually three will be appointed by the chair of the panel to hear any particular disciplinary case.
The members of the panel tend to be people with an interest in football and they may or may not be match-going regulars at any particular team. I would imagine that the rules under which they are appointed require them to state their team allegiance and they will be barred from hearing disciplinary cases involving those teams.
That said, these are serious players in a game where being a serious player is the norm. They would only be appointed as KCs/Judges having demonstrated outstanding intellect and integrity, and appointment to a high-profile disciplinary panel would require them again to demonstrate those qualities. This is not some Kangaroo Court, it will be an assembly of highly trained, widely experienced and intellectually formidable individuals.
There is sometimes an argument raised along the lines that membership of a disciplinary or similar panel of that sort both constitutes a source of income and is a matter of status, and so there is an inevitable tendency on the part of members of those panels to recognise the hand that feeds them. Whether or not an individual panel member is biased depends on the facts of a case. If these were valid criticisms in themselves every member of every pool of potential members of a disciplinary committee would be biased. In fact, whilst not peanuts, the fees received for hearing a disciplinary case like this would make up only a small proportion of their overall remuneration for the year. Panel members are appointed because of their independence, not because they are likely to surrender it, and many have a tendency to demonstrate that independence.
Of course, everyone gets it wrong from time to time. Sometimes a judge just doesn’t see things the same way that a claimant or defendant does. But there is no reason whatsoever for thinking, at least at this stage, that the hearing will be anything other than full, detailed, scrupulously fair and intellectually rigorous. This panel is to the individuals who made the PL’s charging decision what CAS was to UEFA ‘s first committee.
But on steroids.
