The Manchester City decision shows the costs of an aggressive litigation strategy

This is a post is on the decision by an independent commission on Manchester City. In particular, this post critically examines two passages:

(1) the conclusion that that certain factual witnesses for Manchester City gave evidence at the hearing that they knew to be untrue and so had been dishonest (at paragraph 29(b) of the decision); and

(2) the finding that Manchester City made concerted efforts to stop and frustrate the Premier League investigation (at paragraph 157 of the decision).

This post goes no further than the decision in setting out any matter of fact and, as a matter of opinion, this post is based on a close reading of the decision.

*

A quick word about bias. I happen to support a club similar to Manchester City which was bought about the same time as Manchester City and is also a big city club with a great deal of commercial potential. I hope, however, that if my club Aston Villa had been found to have done the same things as Manchester City I would write the same sort of post.

For there, by the grace of gods, go many large football clubs that could have been purchased instead of Manchester City.

*

Now let us begin.

Imagine you are a senior person in a corporation facing legal trouble.

How would you deal with this predicament?

There are perhaps two things to do.

*

First, you will need to have a grasp of the problem: you will need advice on the applicable law and procedure and an assessment of the evidence available. This should give you a sense of what is often called the “merits” of the situation. Most experienced and competent lawyers will give more-or-less the same view of the merits given the same law/procedure/evidence, regardless of who instructs them and for how much.

It is because the law/procedure/evidence will usually point in one direction that when a civil case is at a more advanced stage, when there the parties know the submissions of each other and evidence has been disclosed, that cases tend to settle. The stuff of civil litigation is often at pre-trial stage: what happens at trial will then be theatrics.

(And a similar thing happens with criminal cases, which is why many defendants change their plea.)

An early view on the merits is invariably essential.

*

Once you have a view on the merits, you then have to decide what to do.

One approach is to be conciliatory and cooperative. You know what evidence is going to come out at some stage, and you will have advice on what a tribunal is likely to do on the basis of such evidence. There is thereby no need to make things worse for your corporation. You may as well start earning credit as soon as possible.

Another approach is to be firm and robust. Here the plan is to settle on the best possible terms by showing that you are actually resolved to go all the way. Like military theorists who say one obtains peace by preparing for war, a party will often settle on good terms by showing (and convincing) the other parties that it is genuinely preparing for trial.

And then there is the aggressive approach.

This is when a party does things or does not do things that go further than then firm and robust presentation of a case, so as to have an effect on the other party and/or the tribunal and/or third parties.

This can include non-cooperation with investigators, or intimidatory communications or onerous cynical applications, and even providing false and misleading evidence, and so on.

Aggression is going further than is required to present a case in its best way.

*

A party that has the law and the procedure and the facts on its side will not usually need to be aggressive. Indeed, aggression is often the tell of a weak case.

Aggression can also be counter-productive. There can be additional sanctions and costs consequences for non-cooperation, and stridency can be held against you on appeal. Within a regulatory or litigation process, aggression can make little or no sense.

And so when a party is aggressive there can be an external reason.

A common reason for aggression is send more general signals: so as to deter and inhibit third parties from various courses of action. Litigation is deeply unpleasant for normal people, even when it is not aggressive. A sense that a potential counterparty will be aggressive is often the reason to not take them on.

Sometimes the bullying is directed so as to gain a better chance of favourable settlement, even though the merits of the case are against the bully. This can work even with appeals: a party loses badly at first instance, but still gets a favourable settlement because the winning party cannot stomach going through with an appeal.

Aggression can also be desperation: it gives the illusion of the management of a corporation doing something when there is actually nothing to be done. As they nod in their mirrors they can boast to themselves that they “went down fighting”, even when the fighting comprised punching themselves in the face.

And sometimes parties are aggressive for the same reason dogs lick themselves: just because they can.

There are no real consequences for them from the aggression: an adverse ruling is a cost of business, and it can be afforded. Here the aggression is the point.

None of these are good reasons for being aggressive in regulatory matters or litigation.

They are bad reasons, but they are reasons all the same.

*

The approach of Manchester City to their regulatory and disciplinary woes has been aggressive.

At an early stage of facing investigation, the management of the club will have had advice on the merits of its overall case.

They would have been told the applicable rules, the relevant process, and the likely assessments by the tribunal of the evidence available to the club.

Nothing in the recent decision of the disciplinary commission on that evidence would therefore have come as a surprise. It would have been within the range of foreseeable outcomes.

The question for those in charge of Manchester City would have then been how to approach the investigation.

And for some reason, the club chose to be aggressive.

We know this because of the finding of the commission:

“The Club made concerted efforts to stop and frustrate the [Premier League] investigation.”

(The club maintains it “is innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case”. Note, not just a “body of evidence” – but a “comprehensive” body of evidence, and one which is “irrefutable”.)

At some point a decision would have been made by someone senior at Manchester City for co-operation not to have been provided to the investigation.

That decision would have been made at a senior level, and we can assume that the decision-maker(s) would have had advice in place on the consequences of not co-operating.

It would seem that the decision-maker(s) made the decision not to co-operate anyway.

*

The commission did not only say that the club made efforts to stop and frustrate the investigation (and here note also the two distinct words “stop” and “frustrate”).

The commission also used the strong word “concerted”.

Given that the sentence of the decision would be damning enough without the word “concerted”, then one can ask what is added by this word.

The word indicates that a form of conspiracy or collusion between more than one person, and that a deliberate and planned approach was adopted.

The word “concerted” thereby super-charges what would already be an unfortunate finding.

The commission would presumably not use this word unless there was substance in the (unpublished) appendices.

We also know that this finding that there were concerted efforts to stop and frustrate the investigation was made without the Premier League’s supposed further evidence that “the Club had committed ‘additional and perhaps more 39 egregious acts of non-cooperation’ by making inaccurate, dishonest and/or misleading statements when responding to questions from the Premier League about its financial arrangements in the course of its investigation.”

And so even without this alleged further evidence, the finding was still that there was a concert party of wrong-doing in respect of dealing with the investigation.

*

Given the likelihood of such a finding of non co-operation, it is difficult to see a good reason for the co-operation not to be provided.

And if there was not a good reason, then there was a bad reason – or no reason at all.

*

There are other findings which come down to Manchester City doing things which would then count against them in dealing with this case.

The club put forward witnesses who not only said false things, but who were dishonest.

Again, “dishonest” is a very strong word.

We do not have Appendix 6, but there would presumably be substance in there that not only was the evidence provided by club witnesses incorrect, but that the witnesses were dishonest.

Unless those witnesses suddenly went off on a frolic of their own at the hearing and gave dishonest oral evidence unexpectedly, then the club calling that evidence would have taken the decision to put the witnesses that would provide that evidence before the commission.

Note here that the commission do not say that this dishonest evidence was on trivial or irrelevant points, but that it was from “important factual witnesses” and it was false in “key respects”.

*

Maybe the club will reverse the commission’s decision on appeal.

Maybe the club will succeed in a further appeal to the High Court on a point of law or procedure.

If so, with either outcome, the evidence and legal submissions would have been enough without the aggression. The aggression was not required.

Maybe the Club will force the Premier League to “settle” the case before either appeal.

If so, the adverse findings of the commission are likely to still stand.

Nothing will really have been gained by the aggression – and a lot lost.

Indeed, the lack of cooperation and the dishonest witness evidence reduce the chances of any successfully appeal significantly.

*

The club is now not in a happy place legally.

Not only has it been found to be in breach of various regulations, the commission ruling uses terms like “sham”, “disguise” and “conceal” in respect of those breaches, on the basis of “strong, cogent evidence”.

But this post is not about that evidence. This post is about what the club did once it knew it faced an investigation about those matters.

It made a decision not to cooperate.

It made a decision to put forward witnesses to provide evidence on key points which was found by the commission to be dishonest.

Those were aggressive decisions the club made once it knew it was in regulatory and legal peril.

And it would have done so knowing the likely consequences of those decisions in the findings of the commission.

There is more FAFO than FA in the commission decision.

Manchester City have only got themselves to blame.

***

Comments Policy

This blog enjoys a high standard of comments, many of which are better and more interesting than the posts.

Comments are welcome, but they are pre-moderated and comments will not be published if irksome, or if they risk derailing the discussion.

More on the comments policy is here.