Great post as ever Peter but I've a couple of observations.
'Fraud' surely implies that a person or group of people took a conscious decision to hide something from the accounts that should not have been hidden. My ex-bosses conspired to hide large claims at the insurance company they were directors of. That inflated profits and gave a completely false view of the company's liabilities. They went to jail for a total of 14 years.
If City senior execs knowingly did something similar, you can't possibly condone that and they would deserve punishment if so. However, my view at the moment, based on what I know from the UEFA/CAS case, is that many decisions were taken (including deciding to withhold cooperation) after careful legal & financial advice.
The law and financial decisions are always based on opinion around stated laws or standards, so an opinion may not be regarded as correct or right when examined in court. But I'm assuming we took advice on everything we did regarding Mancini's contract and image rights. I assume that Mancini was told that he had to perform the duties outlined in the Al Jazira contract.
The point is that being given and acting on well-meant advice, which was backed by legislation or precedent, is not fraud. Of someone says "That's not legal but they'll never find it" then that's a completely different matter of course.
And a question about limitations occurred to me when writing my KOTK article yesterday that maybe you or another lawyer can answer. The Limitations Act specifies a standard 6-year period for claims. I believe this doesn't apply where criminal acts are involved. But I'm presuming that the PL Commission won't be in a position to state whether there is any criminal element or not. So how can they justify going back to 2009/10? Is it enough for them to say they think there may be a possibility of a criminal act having potentially been committed?
I'm about to go out but will deal with this quickly.
The accusation the CAS regarded as one of dishonest concealment, concerned the Etihad sponsorship and in particular presenting a number of injections of equity funds by Mansour as sponsorship . There was no question in the proceedings of City having done what was alleged, but in good faith following the advice of reputable lawyers or accountants. The defence was that we didn't do it. Full stop.
The CAS agreed with us, but had we been guilty, IMO that conduct by our directors would have corresponded to the body of the offence of false accounting. It would have been dishonest (sophisticated businesspeople like them know the rules for stuff like this) and it would have been with a view to gain (allowing the club to spend £200 million that otherwise wouldn't have counted as income for FFP as referred to in para 206 of the CAS Award). It would have occurred through our using various sets of accounts the directors knew to be "misleading, false or deceptive" given that those sets of accounts would've collectively misrepresented the true nature of £200 million of equity funding.
I would suggest that the PL over the last few years, pushed by our rivals, has been desperately seeking evidence in its investigation to enable it to have another go on the Etihad sponsorship point. It would seem crazy for the PL to charge us on this issue if there's no more evidence than went before the CAS. Either, then, the Etihad matter doesn't underpin any of the PL charges or, as I suspect given that our rivals' client journos continue to insinuate that the Etihad deal is dodgy, they've found something which they think makes it worth another crack. We'll see.
With regard to matters where we would have followed the advice of reputable professionals, I think you're right that this would be unlikely to constitute false accounting or another dishonesty-based offence. If we thought we were doing things that were perfectly proper in legal and accounting terms, the element of dishonesty would be absent.
As for the limitation point, what will be relevant is section 32 of the 1980 Act, which allows for the limitation period to be postponed in case of fraud, concealment or mistake. I suspect that the PL would be looking to section 32(1)(b), and claiming that the limitation period should be extended because we concealed matters on which a claim would have been based. Thus the limitation period would run from when the PL became aware of the matter in question. Mancini's consultancy contract with Al-Jazira might be an example where they'd argue this.
Here's
a news item on the website of the international law firm Norton Rose Fulbright, which deals with a case where a claimant failed to persuade a court to extend the limitation period on this ground. You'll see that, in reaching its decision, the court pointed to two factors that have been cited in case law as particularly important criteria when considering this issue.
The following is a direct quotation from the Norton Rose Fulbright piece:
The court drew out two (closely related) points from the established case law on s.32(1)(b) LA 1980 important to the case:
- Claimants must meet the “statement of claim” test, which requires the facts which have been concealed to be those which are essential for a claimant to prove in order to establish a prima facie case. The test is not met if the relevant fact merely makes a claimant’s case stronger.
- There is a need to distinguish between concealed evidence which merely supports an allegation essential to the cause of action, on the one hand, and concealed facts without which the claim is incomplete, on the other.
I'm not an expert in this area by any means, but my first instinct reading the above is that we might struggle with regard to something like Mancini's contract.
I hope this is useful, but if you need more, let me know by PM and I'll see what I can do. In the meantime, must dash.