Thursday, February 21, 2008

Webster case defines compensation due for breach of contract

A ruling by the Court of Arbitration for Sport (CAS), on 30 January, in which Andrew Webster and Wigan Athletic were found jointly liable for compensating Heart of Midlothian for the wages left on his contract (£150,000), has clarified compensation due for a unilateral breach of a young football player’s contract under Article 17 of the FIFA Regulations for the Status and Transfer of Players.

It remains to be seen whether the CAS’ ruling will have the impact that newspaper headlines have predicted. It is understood that the ruling applies only to football contracts outside of the ‘protected period’, which is three seasons/years following entry into force of the contract where it is concluded prior to a player’s 28th birthday, and only when a player contract is unspecific with regards to compensation for unilateral termination by the player.

It would appear that the ruling does not give all players the right to walk out of their contracts without compensating their former club, however it may lead to clubs taking more care when drafting contracts with players under the age of 28, in order to ensure that compensation for unilateral termination by the player is covered.

Webster, whose contract ran until June 2007, terminated his contract with Hearts on 26 May 2006, shortly before joining Wigan Athletic. Webster claimed that he was entitled to breach his contract without just cause under Article 17 of the FIFA Regulations, since his termination occurred outside of the protected period. The case was brought before the CAS after all three parties filed separate appeals against a decision from FIFA’s Dispute Resolution Chamber to award Hearts £625,000 in compensation. Hearts’ claim included a £4 million transfer fee which it alleged it was due for playing a role in improving the player from ages 19 to 24.

A full analysis of the decision will appear in the March edition of World Sports Law Report.



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