Contemporary Issues in Sports Law and Practice 2011

Friday November 4, 2011

Over the weekend, I finally managed to collate my various thoughts and notes into some semblance of order.

Firstly, our thanks must go to De Montfort University (DMU) and the British Association for Sport and the Law (BASL) for hosting what was once again a very enjoyable afternoon of speakers exploring a variety of key sports law topics. The half-day conference heard from six speakers, the first plenary session focusing primarily on football and Europe, the second plenary session focusing more on the investigatory and disciplinary processes behind the scenes:

Nick Craig (Director of Legal Affairs, the Football League) gave a presentation on ‘Financial Fair Play and the Football League’.  While the UEFA Club Licensing Regulations have been in place from the 2004/05 season (the current Licensing Manual is now in its 2^nd edition), UEFA have also launched Financial Fair Play Regulations (FFPR) to be applied from the summer of 2011 with the view that all clubs in European competition break-even by 2018. The topic is hot news at the moment in both the mainstream press and more specialist legal coverage.

There were number of particularly interesting points about the contrast between the FFPR being applied in the Premier League as a condition of entry into European competitions, and the Football League (FL) model where the licensing regulations are intended more as a regulatory mechanism to control the clubs and force them to become more sustainable. Legally this agreement with the FL clubs represents a “soft” law approach where the clubs “agree  to actively work to introduce measures”, “increase transparency” and encourage clubs to operate”….  Time will tell how effective the league will be with this increased regulatory authority.

The big stick comes in Article 12(2) of the FFPR which states that:

2 The membership and the contractual relationship (if any) must have lasted – at the start of the licence season – for at least three consecutive years. Any alteration to the club’s legal form or company structure (including, for example, changing its headquarters, name or club colours, or transferring stakeholdings between different clubs) during this period in order to facilitate its qualification on sporting merit and/or its receipt of a licence to the detriment of the integrity of a competition is deemed as an interruption of membership or contractual relationship (if any) within the meaning of this provision.

This clause effectively holds that any club going insolvent restarts this three year process from scratch when it transfers its assets to a new owner, preventing clubs from ditching their debts and picking up where they left off free of all those troublesome creditors.

The devil as always is in the detail though, and while the cornerstone of the FFPR programme is in achieving break-even status, there are loopholes or ‘Acceptable Deviations’. In particular, the ability to lose €5m over the three years covered by the FFPR period (rising to a €45m loss if this is covered by equity contributions) neatly sidesteps the break-even provision, while Annex I A(d) of the FFPR lists an exception for:

d) Non-applicability of the three-year rule defined in Article 12(2) in case of change of legal form or company structure of the licence applicant on a caseby-case basis;   

or put another way, all clubs are equal, but some clubs are more equal than others, particularly if they might be a marquee name with large attendances and gate receipts!

 See also: http://www.financialfairplay.co.uk/ for more information on the FFPR rules

 

Chris Anderson (Associate, Brabners Chaffe Street Solicitors) gave a presentation on ‘Development Compensation for Young Football Players’.  One of the key drivers for this talk was the decision in ECJ – Case C-325/08 Olympique Lyonnais SASP v. Olivier Bernard & Newcastle United FC [41]:

“…In that regard, it must be accepted that, as the Court has already held, the prospect of receiving training fees is likely to encourage football clubs to seek new talent and train young players…”

 This will be a theme, the blog hopes to come back to in the near future, but essentially how much / little should be paid to clubs training (effectively as hot-houses) for new talent.

 Chris drew distinctions between:

• the FIFA system which compensated for both the training costs of a player (although at times there were concerns these payments were ‘damages-based’ rather than a reflection of the actual training costs), and the ‘solidarity mechanism’ (which effectively acted as a wealth redistribution system to share up to 5% of any transfer between clubs training the player between the ages of 12 and 23).
• The current domestic system which was based on agreeing costs (either by the agreement with clubs, or by reference to the Professional Football Compensation Committee (PFCC))
• The proposed NEW domestic ‘Elite Player Performance Plan (EPPP)’ provisionally scheduled to start in July 2012. This system was created and driven by the PL to specifically produce greater numbers of talented home-grown players through increased coaching time and a more transparent (and legally defensible) fixed training cost mechanism. The new system is split into three main phases:
  • The Foundation Phase (U9-U11):  every academy charges a flat fee
  • Youth Development Phase (U12-U16): standardised model of fixed payments based on academy status
  • Professional Development Phase (U17-U21): Clubs (or PFCC) agree appropriate fee

 See also alternative perspectives from: http://www.bbc.co.uk/blogs/paulfletcher/2011/02/football_league_fears_over_pla.html; http://www.fiveyearplanfanzine.co.uk/News/football-league-votes-to-back-elite-player-performance-plan.html; http://www.leedsunited.com/news/20111021/united-ceo-on-a-dark-day-for-football_2247585_2489344

 

Simon Boyes (Senior Lecturer, Nottingham Trent University) gave a presentation on ‘Sport and the European Union after the Lisbon Treaty’. The presentation traced the history of sport in the EU from its initial lack of academic interest, through the various reports, declarations, models and specificities to the present day and the Treaty of Lisbon. In doing so, Simon very much emphasised the evolutionary rather than revolutionary road to Lisbon. What was particularly interesting about the presentation was the thought that the EU was acting not so much as a regulator, but rather as a facilitator / supporter and using sport as a vehicle to engage in wider social missions (e.g. anti-doping, racism, corruption etc). These “softer” words such as “promotion…contribution…taking account of….developing” very much echoed Nick’s earlier talk on incorporating the UEFA licensing model into the Football League. Have all sporting regulators now embraced the softer stick? I thought that was just supposed to be horse-racing?

Any current discussion on Europe would not be complete without mentioning the recent Karen Murphy ruling (see here for a more in-depth analysis), and this was no exception! Interestingly, Simon suggested that fairness and openness were starting to creep into the ECJ rulings as values to be protected and upheld. This might be a trend to watch, particularly given the agenda for good governance and transparency.

 

 

Max Duthie (Partner, Bird & Bird Solicitors) gave a presentation on ‘The Sports Disciplinary Process’. The presentation started with, what seemed to be a recurring theme at the conference, the reluctance of the law to become involved in regulating sport (unless there was a clear departure from the rules / natural justice). Instead, Max pointed to the private, contractual nature of the disciplinary process, with governing bodies imposing their own regulatory codes of behaviour on the athletes under their jurisdiction.

Where I think that this presentation became more controversial was in the issue of jurisdiction, in particular who the sports were purporting to regulate. Max gave a number of examples:

• Direct contractual links (Paul Stretford)
• Implied contracts / contracts by conduct (Petr Korda)
• Voluntary submission to jurisdiction (Dean Richards)

However, where I think the issue becomes greyer is in Sports Codes like the recent Lawn Tennis Association (LTA) Competition Regulations, effective from 1 September 2011:

1.3 By organising, entering, playing tennis in and/ or participating in any way in an LTA Official Competition (including as officials, staff, coaches, representatives, agents, medical staff, relatives and associates of a Player, a Player’s entourage and spectators), a person and/or entity agrees to be bound by and to comply with these Regulations.

It is one thing to bind an athlete to a particular code of conduct, but quite another to hold that they should be responsible for the conduct of all spectators, especially when the player is court-side during a match. On a similar theme, the regulations merely state ‘relatives’ – does this mean all relatives? Or do we need to apply an Alcock-esque ‘close-ties of love and affection test’?

There was also a particularly interesting discussion on whether disciplinary sanctions should be fixed or variable and Max talked about the trade-off between consistency (fixed) and discretion / proportionality (variable), before warning of the cautionary tale of Delon Armitage and the implications that plea-bargaining might have on future tribunals.

See also: http://www.guardian.co.uk/sport/2011/nov/08/delon-armitage-london-irish-england?newsfeed=true  

 

 

Adam Brickell (Head of Legal Compliance, British Horseracing Authority) gave a presentation on ‘The Investigative Processes of the British Horseracing Authority (BHA)’. The highly technical and diagrammatic nature of the presentation makes it somewhat difficult to summarise in any way that could begin to do justice to it. That said, Adam did make a number of interesting observations about the role of the BHA, and in particular the 5 areas that it is currently addressing:

• Clear rules and regulations for participants
• An effective investigative and intelligence capability
• Robust disciplinary and licensing structures
• Comprehensive, on-going education programme
• Partnership approach with the Police, Betting industry and Gambling Commission

Two areas that may be of particular interest to watch in the future, are the concern that a number of betting firms are based offshore and, while they currently assist the BHA through Memorandums of Understanding (MoUs), these MoUs are not legally binding should the companies wish to subsequently withdraw their support. The second issue is linked to this and concerns the lack of regulation surrounding spread betting companies.

As an aside, Adam’s talk also continued Max’s theme from earlier about the regulation (or failure to regulate) members of the public not bound by the organisations rules. In particular, Adam gave the example of 6 individuals who placed suspicious bets on a particular horse, but fell outside the jurisdiction of the BHA when they decided not to cooperate with the investigation.

The final presentation belonged to Jonathan Merritt (Senior Lecturer, DMU) who gave us a sneak preview of his new PhD research into ‘Anti-Doping and Equestrianism’. We wish you every success in this venture…

Battle of the Beers

Sports Litigation Alert (Volume 8, Issue 19) just published a short piece I wrote entitled, ‘Battle of the Beers.’ It is reproduced below:

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In a country where ice hockey and cold beer go hand in glove, two of Canada’s biggest breweries have been battling it out over sponsorship rights as the official beer of the National Hockey League. On 3 June 2011, Newbould J. of the Ontario Superior Court of Justice held that the NHL and Labatt Brewing Company Limited reached a binding sponsorship agreement on 12 November 2010 which would have run from July 1, 2011 — June 30, 2014. As such, the NHL was consequently not free to enter into a similar but superior agreement with Molson Coors Canada Inc. on 8 February 2011. The NHL and Molson appealed and the court held in their favor on 12 July 2011.

In a ruling which has left Labatts all wet (and sudsy), the Court of Appeal for Ontario found that Newbould J. erred by making his finding in a manner not anchored to the pleadings, evidence, positions or submissions of any of the parties to the case. It was accordingly “procedurally unfair, or contrary to natural justice” for this conclusion to be reached [5]. Citing Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), the court held that a theory of liability which emerges for the first time in the reasons for judgment is never tested in the crucible of the adversarial process and thus raises concerns about the reliability of that theory [6].

It is noteworthy that Labatt did not plead that the parties had reached a binding sponsorship agreement on 12 November 2010 [12]. Labatt did not assert during the application hearing that a binding sponsorship agreement existed between the parties and expressly disavowed that it had reached a binding sponsorship agreement with the NHL [13]. The appeals court accepted the NHL’s submission that if it had known that the existence of a binding sponsorship agreement between the NHL and Labatt was at issue, it would have conducted its defence to Labatt’s application in a very different fashion [15].

While hockey is a small fish in the big frozen pond of professional sport relative to their much larger counterparts in football, baseball and basketball, there is still significant money to be made (and lost). Kyle Norrington, marketing director of Budweiser and regional brands for Labatt in Canada, commented in an affidavit filed with the Ontario Superior Court of Justice on the relationship of hockey and beer: “The NHL and the access it provides to Labatt … is the single greatest opportunity to grow Labatt’s share in Canada. The nexus of sports / heritage / emotional / tradition in hockey has no other Canadian comparable.” In contrast to the $37.2 million over three years agreement that Labatt was pursuing, the Molson deal is worth a reported $375 million over seven years.

It is the combination of the trial judge’s analysis of the renewal option in the 2002 Labatt/NHL agreement and his conclusion that a binding agreement was reached at the 12 November 2010 meeting that created the procedural unfairness problem [18]. Quoting Cronk J.A. in Grass (Litigation Guardian of) v. Women’s College Hospital (2005), 75 O.R. (3d) 85 (C.A.), leave to appeal refused, [2005] S.C.C.A. No. 310, the appeals court held that, “at the end of the day, the issues between the parties are defined by and confined to those pleaded” [53]. Since this did not happen, the NHL and Molson were denied procedural fairness and the judgment of Newbould J. was set aside.

Revenge is a beverage best served cold. Earlier this year, Coors Light lost the bragging and sponsorship rights as the official beer of the National Football League to Anheuser-Busch for $1.2 billion over six years. The $375 million Molson Coors/NHL deal reportedly includes approximately $100 million for the rights, $100 million in guaranteed advertising buys and $100 million in activation costs for staging special promotions to capitalize on its rights.

On 6 October 2011, Labatt disclosed that it had received confirmation that the Ontario Superior Court of Justice had dismissed its suit against the NHL and Molson Coors thus ending this round of the battle of the beers. The court plans to release the reasons behind its decision at a later date and Labatt said it would review its legal options at that time.

Double Jeopardy: CAS 2011/0/2422 USOC v. IOC

Read the CAS verdict; IOC rules; WADA Code

The case of the United States Olympic Committee (USOC) v. International Olympic Committee (IOC) (CAS 2011/O/2422) concerned the validity and enforceability of a particular IOC regulation prohibiting drug violators from competing in the next edition of the Olympic Games following their period of suspension.

The IOC rule was known as the “Osaka rule” and was enacted in Japan on 27 June 2008:

“The IOC Executive Board, in accordance with Rule 19.3.10 OC and pursuant to Rule 45 OC, hereby issues the following rules regarding participation in the Olympic Games:

1. Any person who has been sanctioned with a suspension of more than six months by any anti-doping organization for any violation of any anti-doping regulations may not participate, in any capacity, in the next edition of the Games of the Olympiad and of the Olympic Winter Games following the date of expiry of such suspension.
2. These regulations apply to violations of any anti-doping regulations that are committed as of 1 July 2008. They are notified to all International Federations, to all National Olympic Committee and to all Organizing Committees for the Olympic Games.“

While this rule applied to all Olympic athletes, in practice only a certain sub-set of athletes were affected:

• Athletes not guilty of a doping violation – rule does not apply
• Athletes guilty of a doping violation (with less than 6 months suspension) – rule does not apply
• Athletes guilty of a doping violation (over 6 months suspension) who wish to compete in non-Olympic competitions  – rule does not apply
• Athletes guilty of a doping violation (over 6 months suspension), but not selected by their National Olympic Committee (NOC) – rule does not apply
• Athlete guilty of a doping violation, still serving their suspension – rule has no immediate effect
• Athlete guilty of a doping violation at an Olympic Games  – rule has no immediate effect
• Athlete guilty of a doping violation (over 6 months suspension), and selected by their National Olympic Committee (NOC) – RULE APPLIES

The case was brought against the IOC because one of those affected athletes, LaShawn Merritt was prevented by the rule from representing the USA at London 2012. Merritt had previously tested positive in an out-of-competition test for ExtenZe (a ‘male performance’ product containing the banned substance DHEA); and while the doping panel accepted that the substance was used inadvertently and that there was no intention to dope, Merritt still received a ban from competitions.

The crux of the case can be seen from Merritt’s current position. His ban ended earlier this year on 27 July 2011, however despite his eligibility to compete in any other competition, Merritt was still prevented from competing in next summer’s 2012 Olympics Games. He and USOC argue that this additional ban is unfair for two main reasons, because it violated the principle of double jeopardy (ne bis in idem) [7.2] and that the imposition of an additional doping sanction was in contravention of the WADA Code (article 23.2.2). USOC also argued that the rule resulted in unjustifiable discrimination between athletes and that the IOC rule should be “cancelled and declared null and void, or alternatively, that a mechanism be allowed for a case by case review of the appropriateness of the applicability of the Decision to each specific athlete” [2.9]

By contrast, the IOC argued that the rule constituted an eligibility rule [7.4] as to who could qualify as a competitor in the Olympics under Rule 45.2 of the Olympic Charter rather than as an additional sanction, that the rule protected the values of the Olympic Movement from the “scourge of doping” [7.5], that athletes had no automatic right to participate in an Olympic event [7.8] and that the rule did not conflict with double jeopardy (ne bis in idem), as it pursued a wholly different purpose than an anti-doping ineligibility sanction [7.8].

 

THE CAS RULING

All parties recognised that uncertainty surrounding the application of the decision was unhelpful, particularly since CAS had previously provided two Advisory Opinions in this area, one requested by the IOC had concluded that Rule 45.2 was an eligibility rule [8.7], while a Confidential Opinion to an unnamed International Sporting Federation (ISF) held that the application of a similar rule by an ISF was intended to be penal in nature and therefore could not constitute an eligibility rule [8.8].

It was therefore agreed that CAS had the ability to definitively settle the dispute (R27 of the CAS Code) and three arbitrators were chosen to hear the case: Professor Richard H McLaren (Canada), Me. Michele Bernasconi (Switzerland), and David w. Rivkin, Esq. (USA).

Both parties agreed that the applicable regulations of the arbitration (R58 of the CAS Code) should be:

• Swiss Law (including fundamental principles)
• the Olympic Charter (OC), in particular, rules 41 (eligibility), 44 (applicability of WADA Code) & 45 (Olympic participation)
• and the WADA Code, in particular, s.10.2 (sanctions for 1^st violation), s20.1.1 (IOC implementation of Code), 23.2.2 (prohibition against substantive changes to the Code) and appendix 1 (definition of ineligibility)

WADA also independently submitted an amicus curiae brief on 13 July 2011 to ensure that the arbitration panel would have as comprehensive a view as possible of the potential issues surrounding the IOC regulation, particularly since there was a suspicion that tribunal doping sanctions were being manipulated to stay under 6 months to avoid being caught by this rule [3.11].

 

ELIGIBILITY RULES

Previous CAS Jurisprudence (RFEC v. Alejandro Valverde v. UCI (CAS 2007/O/1381 [76]) suggested that: “qualifying or eligibility rules are those that serve to facilitate the organization of an event and to ensure that the athlete meets the performance ability for the type of competition in question.” [8.9]. In particular it was noted that qualifying (eligibility) rules define certain attributes or formalities required of athletes, rather than sanctioning undesirable behaviour.

Because IOC Rule 44 expressly incorporated the WADA Code as underpinning the Olympic Games, the IOC were bound by WADA’s definition of ineligibility. Unfortunately for them, under Article 10 of the WADA Code, ineligibility was held to be a sanction. In making this decision, the Panel held that the fact that an athlete could participate at other International competitions was irrelevant [8.16].

From this conclusion, the IOC was always going to lose as under Article 23.2.2 of the WADA Code, signatories of the Code could not add any additional provisions “which change the effect of […] the periods of eligibility provided for in Article 10 of the WADA Code.”

Because Rule 44 increased the period of ineligibility from the original doping violation (between 6months to 2 years) to the number of days until the next Olympics Games, the IOC regulation was not in compliance with the WADA Code and as such had to be struck out as invalid [8.44].

The Panel did not state that such an additional sanction could never occur, simply that such a rule needed to be incorporated within Article 10 of the WADA Code when the Code was next reviewed. To satisfy any proportionality requirements, the Panel also recommended that a first instance adjudicatory body should review any appeals [8.27].

 

The British Olympic Association (BOA) By-law

Much of the talk this week has been over whether the BOA by-law is legitimate in the wake of this ruling, and what implications this might have for Dwayne Chambers and David Millar. BOA Bylaw 25 sets out that:

“any person who is found to have committed an anti-doping rule violation will be ineligible for membership or selection to the Great Britain Olympic team”.

Importantly, the bye-law also gives individuals the right to appeal (something that distinguishes the BOA Bye-Law from that of other NOCs).

Taken at face value though, the same issues from the USOC case apply, in that any athlete guilty of a doping violation is ineligible for selection on a British Olympic team. If this USOC decision was extended to the BOA, then it is strongly arguable that this requirement also constitutes a sanction attributable to the same behaviour and resulting in the same consequence (ineligibility from competition) [8.36]. Or more colloquially, If it looks like a duck, walks like a duck and quacks like a duck, it’s a duck!

Again, taken at face value, the only significant difference between the two rules would seem to be that the BOA by-law has an inherent appeals process, which would negate any proportionality requirement.

Is this enough though, arguably no.

There is one alternative argument though that may solve the BOA problem. At footnote 11 of the USOC decision, the CAS Panel noted that:

“If the IOC issued a rule that persons convicted of a violent felony were not eligible to participate in the Olympic Games, such a rule would likely not violate the principle of ne bis in idem, because the effective purpose of that sanction would be different from the purpose of the criminal penalty associated with that violent felony.”

Therein might lie a possible defence for the BOA. If the BOA rule was based around a different purpose than simply a sanction associated with taking drugs, but was linked to eligibility, for example an athlete’s role as an ambassador representing their country, then following footnote 11, it could be argued that the by-law had a different purpose and was therefore valid and enforceable. Such a stance echoes the comments of Colin Jackson, interviewed immediately after the judgment by the BBC:

http://news.bbc.co.uk/sport1/hi/olympics/15199159.stm

If the BOA by-law was interpreted as a ‘moral / ethical behaviour clause’, should it be limited to just drugs and doping violations though? Do we want athletes representing our country who were guilty of criminal offences? If the by-law was extended this would also help in removing the WADA ‘consistency’ argument, as different jurisdictions around the world impose different criminal sanctions and offences.

Or should we just fall into line with WADA and the rest of the world and reduce our rules to the lowest common denominator?

http://news.bbc.co.uk/sport1/hi/olympics/15159569.stm

 

Hard questions about the NHL’s regulation of hockey violence

I’ve just surfaced following the Vancouver Canucks’ collapse at last Wednesday’s Game 7 of the Stanley Cup Finals. Notwithstanding the Canucks’ loss and the Boston Bruins win, the Finals offered some interesting insight into the National Hockey League’s management and regulation of the game.

• Spleens have been vented over how the on-ice officials swallowed their whistles, especially during the Finals, and how it played to the Boston Bruins’ advantage enabling them to browbeat the Canucks into submission and take them off their finesse game. It is generally agreed that the referees employed a different standard of officiating in the post-season than in the regular season. On the one hand, it’s dismissed as ‘that’s playoff hockey’ but it raises a fundamental question: How should a party to a contract respond when its terms and conditions are interpreted differently at the time when it matters most?
• Even further, Bruce Dowbiggen of The Globe and Mail characterized Bruins’ Brad Marchand ‘using the head of Hart Trophy finalist Daniel Sedin as a speed bag – to the approval of hockey’s blood culture’ and rhetorically asked, ‘Imagine an NBA rookie speed-bagging [playoff MVP] Dirk Nowitzki’s head going into a timeout or a first-year NFL player hitting [all-star] Tom Brady in the head repeatedly after the play. What do you think the response would be from those leagues?’
• Bruce Dowbiggen wasn’t done yet though. He also provocatively asked the following: ‘One final thought on rookie Marchand: How come when he abuses a superstar he’s applauded by Hockey Night in Canada and the media as a savvy kid who gets under the skin to win. But when Montreal Canadiens rookie P.K. Subban did the same, we were told by the same voices that he was a punk with no respect who needed to be taken down a notch? Is it because Marchand is a Bruin, a sacred squad on Hockey Night, because Sedin is a European or because Marchand is white while Subban is black, or all of the above. Take all the time you need to answer.’ Ouch.
• The NHL is to be commended for its four game suspension of Aaron Rome for his open ice hit on Nathan Horton in Game 3 of the Stanley Cup Finals. Horton sustained a serious concussion and did not play the remainder of the series. The ends, however, do not justify the means. Rome was penalized not for a hit to the head in breach of Rule 48 but for interference. Mike Murphy, NHL Senior Vice President of Hockey Operations, applied a phantasmical formula to the hit in assessing the suspension. The existence of the formula is just as abstruse as the existence as the ‘hitting zone’ behind the net which enabled Vancouver Canuck Raffi Torres to flatten Chicago Blackhawk Brent Seabrook earlier in the playoffs or Boston Bruin’s Zdeno Chara’s vicious hit on Montreal Canadien Max Pacioretty which left Pacioretty with a severe concussion and an undisplaced fractured the fourth cervical vertebra which somehow escaped supplemental discipline from the league. The league appears to acknowledge the obtuseness of its approach to head shots. A blue-ribbon committee of former all-stars Brendan Shannahan, Rob Blake, Steve Yzerman, and Joe Nieuwendyk (the first two are now with the NHL hockey operations staff whilst the latter two are general managers with the Tampa Bay Lightning and the Dallas Stars respectively) has recently recommended to the league’s competition committee that Rule 48 be broadened and clarified. The solomonic challenge is to keep violence in the game but rid it of egregious violence. That’s easier said than done. As Ottawa GM Bryan Murray says, ‘We want hitting in the game, and there will be contact to the head, whether we like it or not, and it won’t be illegal all the time.’ Toronto Maple Leaf GM Brian Burke succinctly captures the flavour of inherent risk in hockey: ‘The tightrope we walk is [hockey] is a full contact sport …. We want to eliminate the really dangerous parts of the play but this is game where you’re going to get hit and there’s going to be injuries, and we’ve got to start with that basic understanding.’ Unspoken is the fact that the International Ice Hockey Federation, the Ontario Hockey League, the Quebec Major Junior Hockey League, and the NCAA (National Collegiate Athletic Association) prohibit any hit to the head and the quality and integrity of the game has not suffered as a result. If this is the case then how can traditionalists like Murray and Burke claim hits to the head are integral to hockey?

NHL, Labatts and the ‘monster deal’ that got away

The Vancouver Canucks are up 2-0 in the Stanley Cup Finals on an overtime goal scored by Alex Burrows 11 seconds into the extra period. Burrows had distinguished himself the previous game by inadvertently masticating upon and potentially dislocating or amputating Patrice Bergon’s phalange. In other words, Burrows bit Bergon’s finger.

Such bizarre incidents (bizarre because they’re condemned as classless and gutless – notwithstanding that they typically occur in the context of players ‘fashwashing’ one another in a scrum which begs the inane question, what was Bergon’s finger doing in Burrows’ mouth in the first place? – whereas fighting, egregious hits to the head and concussions are considered normal and condoned) occasionally occur in the NHL. The most infamous incident occurred in the 1989 Stanley Cup Final when Claude Lemieux bit Jim Peplinski ‘s finger, eliciting the quote,  ‘I didn’t know they allowed cannibalism in the NHL.’

Regardless, Burrows avoided suspension by the NHL because the league found no conclusive evidence that he intentionally bit Bergon’s finger. Burrows presumably chomped down on the errant finger as part of an involuntary gag reflex.

To quote OMC, ‘How bizarre, how bizarre.’

Meanwhile, the NHL’s $375-million sponsorship with Molson-Coors was rejected three days ago by an Ontario Superior Court Judge who ruled the league had reneged on its deal with the company’s archrival, Labatt’s. The decision by Judge Frank Newbould tosses out the most lucrative deal in NHL history. It was described as ‘a monster deal’ by NHL chief operating officer John Collins when it was unveiled in February 2011.

The Ontario Superior Court ruled Friday in favour of Labatt’s accusation that it already had an agreement in place with the NHL before the League committed to a $375-million sponsorship deal with arch-rivals Molson Coors. ‘In my view the NHL should not be entitled to profit from its breach of its agreement with Labatt, Newbould J. said. ‘Labatt should be entitled to its bargain and to its unique marketing position resulting from the agreement to be the Canadian sponsor of the NHL for the next three years.’

Zip-lines and the Law

Sports Litigation Alert (Volume 8 Issue 6) just published an article I wrote entitled, ‘Family Alleges Negligence after Man Dies on Zip-line’ which is about a zip-line lawsuit launched in the United States and another zip-line case just decided in Canada. Here are a few excerpts:

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A lawsuit was recently filed in the United States District Court, District of Utah — Central Division, by the estate of a man who died while zip-lining. The complaint alleges in Hoagland et al. v. Rockin’ R Ranch & Lodge Guest Operations Inc. et al. that on Aug. 11, 2008, at the Rockin’ R Ranch in Piute County Utah, Daniel A. Hoagland, M.D., dutifully followed the instructions given him, climbed the zip-line tower, held on to the strap which connected the stick to the zip-line, sat on the stick and left the tower. The strap immediately snapped causing Dr. Hoagland to fall resulting in his death. The complaint describes the strap as narrow, weathered and worn-out.

…

The lawsuit alleges negligence or, in the alternative, gross negligence, which the complaint describes as conduct that is willful, intentional or reckless, causing Hoagland’s death. The complaint lists 15 separate alleged breaches of duty. The two most salient allegations relate to failure to maintain a safe zip-line and failure to secure participants to the zip-line via a harness and lanyard.

The defense will likely rely upon the doctrine of inherent risk and that the plaintiff signed a waiver and release of liability. U.S. courts have dismissed similar claims under the doctrine of primary assumption of risk such that — for example — if falling is an inherent risk of climbing and if the plaintiff fell while climbing, then the eventuation of that risk is something to which the plaintiff accepted.

…

Coincidentally, in another zip-line case, a Canadian court in Loychuk v. Cougar Mountain Adventures Ltd. (2011 BCSC 193) ruled last month that the waiver signed was binding, thus barring the plaintiff’s recovery. The defendants conceded negligence in the communication breakdown which gave rise to the high-speed collision on the zip-line between the two plaintiffs, so the only substantive issue facing the Supreme Court of British Columbia was whether the waiver of liability and assumption of risks agreement was valid.

Among other claims, the plaintiffs argued that the defendant misrepresented the terms of the waiver, that it was obtained without past consideration, and that it was unconscionable. The plaintiffs had considerable experience and exposure to waivers; one plaintiff had just finished law school and the other was an owner of a fitness business which required its clients to sign a waiver and assumption of risks agreement.

The court disagreed with the plaintiff’s claims and found that the waiver was enforceable; that there was no evidence of duress, coercion or unfair advantage; and that the plaintiffs were given notice as evidenced in the defendant’s website which discloses that guests were required to sign a waiver of liability, and that the wavier was not unconscionable.

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US zip-line lawsuit

A lawsuit was recently filed in United States District Court (District of Utah – Central Division) by the estate of a man who died whilst zip-lining. The complaint alleges that on 11 August 2008 at the Rockin’ R Ranch in Piute County Utah, Daniel A. Hoagland, MD dutifully followed the instructions given him, climbed the zip-line tower, held on to the strap which connected the stick to the zip-line, sat on the stick and left the tower. The strap immediately snapped causing Dr. Hoagland to fall resulting in his death. The complaint describes the strap as narrow, weathered and worn-out.

The lawsuit is seeking general damages, special damages including loss of financial support and lost wages, punitive and exemplary damages, plus other costs.

The lawsuit alleges negligence or, in the alternative, gross negligence which the complaint describes as conduct which is willful, intentional or reckless causing Dr. Hoagland’s death. The complaint lists 15 separate alleged breaches of duty. The two most salient allegations relate to failure to maintain a safe zip-line and failure to secure participants to the zip-line via a harness and lanyard.

The defense will likely rely upon the doctrine of inherent risk and that the plaintiff signed a waiver and release of liability. US courts have dismissed similar claims under the doctrine of primary assumption of risk such that – for example – if falling is an inherent risk of climbing and if the plaintiff fell whilst climbing then the eventuation of that risk is something to which the plaintiff accepted.

That Dr. Hoagland was not wearing a harness – while distressing – is not necessarily material to the case. It is probable that he was informed of this hazard and that, as a man of science, he understood the law of gravity and the risks herein.

Zip line using stick and no harness - photo is NOT from Rockin' R Ranch

Where it becomes potentially troublesome for the defendant is in the state of the equipment. Contrary to the claim, the defendant is under no duty to operate a ‘safe’ zip-line. Under the circumstances, it is unreasonable to assign a duty to make a contraption such as this infallible. Risks can be minimized or mitigated but never eliminated. To remove the risk of falling from a height whilst zip-lining or climbing, the only plausible option would be to not get off the ground. At issue then is what are reasonable risk management practices in the circumstances of operating a commercial zip-line operation.

Recall that the strap broke immediately after Dr. Hoagland weighted it. This might suggest that it was of insufficient integrity or quality to hold his weight. He would have consented to the ordinary risks inherent to zip-lining but have not consented to zip-line on defective or deficient materials or engineering.

It is possible, however, if the waiver was properly prepared and presented that it could bar recovery for a mechanical failure which was not reasonably foreseeable or detectable. Hypothetically, if the strap followed manufacturer’s specifications relating to its use, had not exceeded the manufacturer’s recommended shelf-life, and the alleged materials defect was not detected by the defendants in routine inspection, then its structural failure could not have been reasonably foreseeable.

It is unlikely that a waiver would cover a strap in the condition alleged by the complainant. If it can be shown that the strap was defective or deficient and that it was plain to see to anyone who directed their attention to it then it becomes a different story altogether. This is the second prong to the claim. Gross negligence would not be covered by the waiver.

The crux of this case will therefore be what is a reasonable zip-line and what are reasonable equipment inspection and maintenance practices.

Stay tuned.

Read the statement of claim here - Zip-line Statement of Claim – Hoagland v Rockin’ R Ranch.

Contemporary Issues in Sports Law and Practice, 2010

Many thanks to De Montfort University (DMU) and the British Association for Sport and the Law (BASL)  for hosting what was once again a very enjoyable afternoon of speakers. The half-day conference heard from five speakers exploring very diverse, but equally key topics:

• Karen Moorhouse (RFL) discussed the Rugby Football League’s renewable three-year Club Licensing scheme and how this differed from a more American-style franchise system. The talk explored all aspects of this scheme from an overview of the current system and the criteria employed to define the applicable standards, to how the RFL had anticipated any potential challenges (both legal and fanbase). The proof of the pudding will really come in the next licensing round though when at least one Super League club will not have its current licensed renewed….
• Alistair Maclean (The FA Group) gave an overview of the FA Group’s commercial rights. This was a very informative (and colourful) presentation and provided a thorough explanation of the new commercial strategy (FA Partner Programme 2010-14), blending a comprehensive whistle-stop tour through the FA Rights Inventory with commentary on the practicalities underpinning each branded item.
• The blog’s very own, Jon Heshka (Thompson Rivers University, Canada) presented a paper on regulating ‘Technological Doping’ in sport. Jon outlined the key issues and controversies facing sport stemming from the current unprincipled approach to technology before analysing what options regulators and governing bodies could take. In particular, the talk debated the use of the WADA criteria for chemical enhancement and Jon posited whether the solution really lay in our definition of what were the essential characteristics of sport.
• Christopher Stoner QC (Serie Court Chambers) provided a (much-needed) insight into Paralympic Disability Classification. The talk briefly covered all aspects of classification from a historical introduction to the current criteria for assessment, protests and appeals. What became particularly evident at the end of the talk was that while the current classification system has been in operation for a number of years, it is still evolving and being refined. It will be interesting to see what changes (if any) are made to protests ahead of the forthcoming 2012 Paralympics…
• Ian Lynam (Partner, Charles Russell LLP) evaluated the use of player quotas in UK Sport, in particular, whether leagues could implement caps on the numbers of ‘foreign’ players. Essentially there were two key elements to this presentation, Direct Discrimination (as epitomised by the recently dropped FIFA 6+5 rule) and Indirect Discrimination (as seen in UEFA’s ‘Homegrown Player’ rule. Ian then rounded the event off with practical advice to any governing bodies wishing to implement such a rule.

The date for next year’s Contemporary Issues Event has now been set for 4^th November 2011, information on how to book will follow nearer the time.

Pocketful of Dollars: Hudson Bay Apparel Brands LLC v. Umbro International Ltd [2010] EWCA Civ 949

Read the full case: http://www.bailii.org/ew/cases/EWCA/Civ/2010/949.html

The case concerned several sports clothing retailers, the claimants (Hudson Bay) are a North American Company and recently official suppliers to the Vancouver 2010 Winter Olympics, the defendants (Umbro), by contrast, are primarily a UK retailer focusing in particular on an international football (soccer) brand.  Essentially, the appeal concerned the validity of a series of contracts made between Umbro UK, Umbro’s subsidiary US company, Umbro Corp Inc (based in Delaware) and three North American clothing retailers: Hudson Bay Company (HBC), Dick’s Sporting Goods and a catalogue firm, S&S.

At issue was whether:

1)      Umbro UK had wrongly allowed Dick’s Sporting Goods to market off-field wear in breach of HBC’s exclusive licence

2)      HBC had acted in breach of contract by marketing on-field wear (Umbro UK’s counterclaim).

3)      Umbro UK had wrongly hindered HBC from exploiting its off-field licence in breach of an implied duty of co-operation

At first instance ([2009] EWHC 2861 (Ch)), the Judge (Mark Herbert QC) upheld all three claims. The claimants (HBC) contested aspects of each of these findings.

To understand the case, it is important to understand the nature of the disputed products. Essentially, Umbro UK sold three types of branded clothing:

• “teamwear” (soccer kit provided to competitive teams [3])
• on-field wear (was defined at [3] as “clothes used on the field of play”. While this is a pretty vague definition, there was a suggestion that the performance nature of the fabric e.g. high-wicking absorption qualities, the presence of sleeves and smaller less flamboyant logos all pointed to on-field use)
• off-field wear (was defined at [7] as: “Men’s off-field apparel (meaning all apparel products that are not specifically intended to be used on the field of play for soccer including, for the avoidance of doubt, performance shorts and soccer jerseys) and shall, for the avoidance of doubt, only include the following: t-shirts, sweatshirts, sports polo shirts, hoodies (zip and non-zip), tank tops, reversible shirts, [shirts], sweatpants, sweat suits, wind suits, warm-up suits, rain suits, pull-over jackets, pullovers, outerwear, shorts.”) Lord Neuberger MR further stated that consideration of whether an item is on-field or off-field should be viewed from a hypothetical position rather than the subjective intentions of an actual buyer / supplier [18].

These products were then marketed through a number of North American stores. In Clause 9 of their Licensing Agreement with Hudson Bay, Umbro UK defined their “Distribution Channels” as falling into 7 broad sub-headings:

• Sporting goods chains (Dick’s Sporting Goods)
• Department stores (Macy’s and Dillards)
• Mid-tier department stores (although the clause listed several stores they not named in the judgment)
• Apparel speciality stores (these stores were similarly not named)
• The Ad speciality market who sold promotional products via corporate catalogues (S&S, Broder Brothers, Heritage Imprints, Staton and Virginia Tees)
• Soccer speciality retail (no stores were listed, just ‘as directed by the Licensor’)
• Close-out stores (four stores were listed with restrictions limiting annual sales to 30% of the total)

Umbro UK licensed through Umbro Corp inc, the rights to manufacture on-field wear to Dick’s Sporting Goods, HBC had the rights to off-field wear, while Umbro UK kept the rights to teamwear for itself. What the Court(s) had to decide was whether HBC, Umbro and Dick’s breached the terms of their respective contractual agreements. 

The first claim arose because Umbro UK had authorised Dick’s to sell some goods (in particular a number of t-shirts and tank-tops) which were not specifically intended for on-field in breach of their exclusive arrangement with HBC. Although this breach was accepted by all parties, ultimately the only remedy for HBC was in damages for breach of contract as Dick’s were not joined as a party to the case.

The second claim arose through Hudson Bay’s creation of a pocket-less ‘soccer basics’ and matching tracksuit range sold through S&S catalogues [20]. While it was widely accepted that this clothing was suitable for a myriad of athletic and leisure purposes [28], both Mark Herbert QC and Lord Neuberger MR criticised the lack of pockets on this clothing range and argued that this omission was absolutely critical to the case. Indeed, they suggested that the essence of an off-field product was that it should have “at least one pocket – for money, keys, mobile phone, or an iPod, for example” [30]. Hudson Bay didn’t help themselves in this regard when even their own marketing specialist (Jock Thompson) gave witness testimony that “adding pockets converted on-field garments into off-field garments, and that removing pockets converted garments the other way” [28]. The Court also heard testimony that FIFA forbade any on-field products to include pockets [30]. Given these conclusions, it was highly likely that these products would be considered to be “on-field” wear in contravention of HBC’s licensing agreement [31].

Similarly, although the Court accepted that tracksuits would generally be characterised as off-field wear, the fact that tracksuits were marketed alongside the shorts and t-shirts in both the S&S catalogue [33] and in Dick’s Sporting Goods [34] was enough to transfer the products into on-field wear, thereby absolving Dick’s Sporting Goods from any liability for breach of contract, and creating liability for Hudson Bay for their sales to S&S. The multi-purpose and multi-environment nature of the tracksuit was not therefore the important part, but rather in what context it was sold. The same tracksuit could therefore be both on-field and off-field depending on how it was marketed. This seems a particularly ambiguous way to conduct a commercial licensing agreement with two direct competitors, but perhaps grey is this season’s fashionable colour????!

Hudson Bay’s defence to this claim, that they were given the authority to market this clothing by Miss Barbara Jackson (appointed President of Umbro US in 2006) was however rejected [37]. At first glance this might seem surprising given that there was no doubt that Miss Jackson had both orally approved the removal of pockets from the “soccer basics collection” marketed in S&S [41] and signed a variation authorising this range [57], on closer reflection though, it is clear that Hudson Bay could not rely on either of these approvals [42] as they knew, or should have known that neither could not have bound Umbro UK.

While the Court held (obiter) that a company like Umbro UK could be bound “(through an implied term, implied agency, or, possibly, on some other basis) by a consent given by Miss Jackson” [50], none of these applied in this case as Hudson Bay could not have reasonably have believed that this approval would have been binding on Umbro UK given the previous detailed contractual history between the companies [59]. Makes you wonder what exactly Miss Jackson’s role was then? The devil is most firmly in the detail and in this instance the detail said that only Umbro UK could grant approval of designs.

For the same reasons, an estoppel argument also failed, as did a suggestion that Umbro UK had not enforced its prohibition quickly enough [60].  Even if the Court was wrong though and a waiver (license) was valid, this did not help HBC as such a conclusion could only defeat a damages claim for past marketing of the pocket-less ‘soccer basics’ clothing rather than authorise future sales of this range [62] which is what HBC wanted.

Perhaps unsurprisingly, Umbro UK’s decision not to process any further sales orders from HBC during this litigation (which formed the basis of HBC’s third claim) also failed as this was a reasonable commercial decision for Umbro to have taken [66], although Umbro were in breach for unreasonably failing to consider new clothing designs from HBC during the same period.

On a slightly lighter note, the pun of the case must go to Lord Neuberger at paragraph [32] when in discussing whether the provision of larger size products (XL, XXL and XXXL) was inconsistent with an on-field collection stated that: “we were not told what size waist would be accommodated by XXXL, and, anyway, people with ample waists are not excluded from playing soccer. Accordingly, I would not accord that point any weight [emphasis added].” 

Behind the scenes at Umbro Football Design (Youtube):

Hudson Bay advert from the Vancouver Winter Olympics (Youtube):

Moore Winter Sports accidents

Emma Moore v. Hotelplan (T/a Inghams Travel) & Mr Adriano Tantera [2010] EWHC 276 (Ch)

This case concerns an accident while undertaking winter sports, more particularly an organised evening snowmobile (‘skidoo’) ride at the Italian ski resort of Passo Tonale in January 2007. The claimant was a 37yr old personal trainer on a group skiing holiday organised by the defendant operator (Inghams). The company subsequently joined a third party (Mr Tantera) to the action as he provided the skidoos and instructed the party as to their use.

The action arose when the claimant lost control of the skidoo as the group was descending down the mountain. The claimant collided at speed with a parked car at the foot of the slope causing spinal injury and paralysis at T5 (mid-chest).

The action was for:

• breach of contract,
• breach of tortuous / delictual duties owed under Articles 2050 and/or 2043 of the Italian Civil Code
• Negligence

The case was made more complicated by the fact that the defendant denied responsibility for the activity and blamed the third party entirely, to the extent that it claimed any actions of the Ingham representative on site were merely as an agent for Mr Tantera.

The Court at [7] identified five key questions:

1. What were the contractual arrangements for the skidoo trip?
2. What instructions were given to the claimant as to the control of the skidoo, and in particular was she instructed in the use of the engine cut out, the cut off button?
3. What was the cause of the claimant’s loss of control of the skidoo?
4. Would the operation of the cut-off button have prevented the accident?
5. Was there contributory negligence on the part of the claimant?

Taking each in turn,

Although the holiday was booked by another member on behalf of the group four months previously and purported to exclude liability for any subsequent third party excursions, the Court held at [28] that Mr Tantera operated this excursion on behalf of Inghams through a contract signed in 2002, and viewed the party as Ingham customers [16]. The Court also relied on the fact that the Skidoo’s were advertised in an Inghams’ welcome pack [11], the party paid Inghams for the trip [12], received a receipt on headed Inghams notepaper [12], were not told that the onsite representative (Ms Hodges) was acting for a third party [13], had to exclusively book the excursion through Ms Hodges [24] and had to sign disclaimers (that were subsequently not relied on as they were for a different vehicle) on behalf of Inghams [14]. Given these findings, the contract for the supply of the skidoo excursion was also impliedly subject to the original liability clause meaning that Inghams was liable for any injuries and consequent losses “caused by the lack of reasonable care and skill” on the part of Mr Tantera [29].

Having established potential liability, the next question was to establish whether the defendants through Mr Tantera had breached their duty to the group in failing to give clear operating instructions for the Skidoos. The Court heard a number of mechanical arguments relating to the Skidoos (Polaris 550 Fun Sport Edge 136 Touring snowmobiles), but essentially this section can be summarised as a factual discussion of the safety briefing. The Court heard that all members of the group chose to wear helmets, despite the fact that this was non-compulsory [33], and that several members of the group were complete novices. The party also stated unanimously that the safety briefing took 30 seconds each [34-39], and that no-one was shown what or where the cut-off switch was. This contradicted Mr Tantero’s evidence that he spent 2-3 minutes with each person and that his usual practice was to give such an instruction [41]. The most damning bit of evidence though came from Ms Hodges who described Mr Tantera’s briefing in her witness statement as:

“When he briefs each driver he first asks (in English) if it is their first time on a skidoo, then he switches on the engine himself, they are not allowed to do this. He then tests the accelerator, which is on the right, and says “this is the throttle-accelerator; it is an automatic clutch, no gears”. He then shows them the brake on the left-hand side and says “this is the brake”. Stay in line, five to six metres separation, no overtaking, no slalom.” [40]

 Unsurprisingly the Court preferred the evidence of the party and held that Mr Tantero had not shown the group the cut-off switch, thereby breaching his duty to the claimant.

 The Judge held that the accident occurred when the Skidoo was going too fast on the downhill return leg of the journey, 45mins into an otherwise uneventful trip. Although the Court heard from two expert witnesses, it preferred the defendant expert’s view that an examination of the skidoo after the accident had shown no defects with the mechanical operation of the vehicle, suggesting driver error was to blame for the accident. In particular the Judge held that the claimant most probably drove too close to the skidoo in front of her, swerving to avoid it and in her panic hitting the accelerator rather than the brake [65].

The causation question of whether an application of the cut-off switch could have prevented the accident was comparatively straightforward and the Court held at [74] that it would have done.

The only question remaining was whether the claimant was contributory negligent. At [80], the Court found that there were two errors the claimant made that materially contributed to the accident, the first was driving too close to the skidoo in front, the second was in applying the throttle rather than the brake (although the Court was careful to suggest that she should not be judged too harshly for her confusion in the ‘heat of the moment’). The Court however rejected the argument that the claimant should have noticed and applied the cut-off switch.

In summary, the Court suggested that “the Claimant created the emergency, but as a consequence of the negligence on the part of Mr Tantera in failing to instruct her as to the use of the cut-off button in an emergency, she did not have the means of dealing with it in a manner that would have avoided the accident”, although Mr Justice Owen did award 30% contributory negligence.

There are two other interesting elements to the case that are worthy of consideration, the first is a scathing judgment on the quality of the evidence from one of the defendants experts’ (a Mr Christopher Exall). At [75], the Court suggested that there were: “a number of gravely disquieting features of his evidence, culminating in the assertion in his third report, made under an expert’s declaration of truth, that he had had discussions with a Mr Michael McDowell of Polaris UK, an assertion that, as he was forced to concede in cross-examination, was subsequently untrue. I do not propose to set out the other actions on his part which on any view were indefensible for a witness under an obligation to the court to give impartial and objective evidence. But there can be no doubt that he took on the role of an advocate for the defendant. He did not give impartial evidence, and was wholly discredited as a witness. I could not place any reliance on any part of his evidence.”   Ouch!

The other comment interesting part of the judgment relates to insurance. At [17], the Court quoted from the Defendant Reps Manual Winter 06/07 which contained the following paragraph under the heading ‘Snow-mobiling’: “You will find that snow mobiling and ski-doo’s are offered in many of our ski resorts but the normal holiday insurance cover does not include any liability cover for damage, injury or death caused to third parties. The liability cover held by the operator and included in the price or offered as an extra, is unlikely to be anywhere near adequate in the event of an accident causing serious injury or death to a third party…..”

I don’t know about you, but while the Court did not comment on this paragraph, I think it is worth pausing a few minutes to reflect on it. Essentially isn’t Inghams saying they know that not only is their insurance cover excluded by the holiday contract, but that the operator’s own insurance cover is inadequate, even if purchased as an add-on extra! In fact it makes me so worried, that on my next skiing holiday, it would be perhaps be better if I Skidon’t and we stick to the planks of wood (or fibreglass!).

Youtube clip of a skidoo jump: