Breaches & Bungs

Brian O’Neill QC and Julia Faure Walker, who secured the convictions of two football agents and a former assistant head coach, consider the inter-relationship between the FA Regulations and the Bribery Act 2010. 

In December 2019, following a two months’ trial at Southwark Crown Court, two football agents, Giuseppe Pagliara and Dax Price, and the former assistant head coach of Championship side Barnsley FC, Tommy Wright, were convicted of offences under the Bribery Act 2010.  The prosecution’s case was that the agents had arranged a payment of cash, and encouraged further payments to be made, in order to induce Wright to do one or more of the following improper acts:

1. To encourage football players at Barnsley FC to engage or retain Giuseppe Pagliara and Dax Price as their agents.
2. To place football players who Giuseppe Pagliara and Dax Price represented either as third party owned players or otherwise into Barnsley FC.
3. To ensure that football players who Giuseppe Pagliara and Dax Price represented either as third party owned players or otherwise played first team football for Barnsley FC.
4. To arrange a meeting between Giuseppe Pagliara and Dax Price with the owners, chief executive and manager of Barnsley FC.
5. To disclose confidential information relating to the contracts of Barnsley FC football players to Giuseppe Pagliara and Dax Price.

On 17^th January 2020 they were sentenced as follows, the court observing that corruption in the national game must always be visited by a custodial sentence:

• Mr Pagliara – two years’ imprisonment on each count concurrent suspended for two years; 300 hours’ unpaid work and a curfew at his home address from 1900 to 0700 for 4 months.
• Mr Price – eighteen months’ imprisonment on each count concurrent suspended for eighteen months; 250 hours’ unpaid work and a curfew at his home address from 2000 to 0600 for 3 months.
• Mr Wright – twelve months’ imprisonment on each count concurrent suspended for twelve months, to repay £5000 to The Daily Telegraph and to pay £3000 in costs.

The imposition of custodial sentences, albeit suspended because of their respective personal mitigation, illustrates the seriousness of bribery offences even where they relate to relatively small amounts of money.

Although this was a criminal prosecution in the Crown Court arising out of an undercover investigation by a national newspaper, the FA Regulations played an important part in how the prosecution case was presented.  The prosecution called a witness from the FA who explained the FA Regulations on working with intermediaries (“the Intermediaries’ Regulations”) and the Third Party Interest in Player Regulations (“the TPI Regulations”) to the jury.  His evidence helped to establish that certain relevant functions would have been performed improperly, an essential component of bribery offences, if carried out in line with what the defendants said to the undercover journalists.  In cross examination, defendants accepted, as they had to, that aspects of their schemes clearly breached the regulations by which they were bound.

THE INTERMEDIARIES’ REGULATIONS

Regulation E.6 of the Intermediaries Regulations: the prohibition on intermediaries giving or offering consideration in connection to any transaction

Regulation E.6 of the Intermediaries’ Regulations, under the heading “Conflicts of Interest” prohibits an intermediary (i.e., a football agent) from paying a club employee to gain preferential treatment or access to the club’s players:

An intermediary must not give, offer or seek to offer, any consideration of any kind, either directly or indirectly, to any Club, Club Official, Manager or Player as a result of or in connection with a transaction or in return for any benefit, service, favour or any kind of preferential treatment in respect of the Club’s Players, access to those Players or the promotion of the Intermediary’s services with those Players.  Clubs, Club Officials, Managers and Players are prohibited from accepting such offers or receiving such consideration.

There is an obvious overlap between this regulation and section 1 of the Bribery Act 2010, although the latter requires a particular intent.  Section 1 of the Bribery Act 2010 prohibits anyone, including a football agent, from paying a club employee to gain preferential treatment or access to a club’s players, if he intends the payment (or offer of payment) to induce the employee to perform activities in the course of his employment improperly.  In particular, a person (P) would be guilty under section 1 in this scenario if:

• P offers, promises or gives a financial or other advantage to an employee (E).
• P intends the advantage to induce E to perform improperly a relevant function or activity, or to reward E for the improper performance of such a function or activity. For these purposes, “relevant function or activity” includes any activity connected with a business or in the course of E’s employment, which E is expected to perform in good faith.

Part of the prosecution’s case here was that the money given to Tommy Wright, the assistant head coach of Barnsley FC, was to induce him to encourage players to appoint the first two defendants as their agents, and to place players represented by the first two defendants at Barnsley FC.  Plainly such behaviour would be a breach of both Regulation E.6 (being preferential treatment and the promotion of the intermediaries’ services in return for payment) and the Bribery Act 2010.

THE TPI REGULATIONS

A persistent feature of the conduct of the two football agents from the outset was their determination to attempt to ‘get around’ the well-known prohibitions on third party ownership, or third party interest to give it its proper title.  The FA’s regulations have been in place for many years; FIFA’s are of more recent vintage.

Regulation A.2 of the TPI Regulations: prohibition on third party interest in players

Regulation A.2 of the TPI Regulations prevents a Club from entering into any agreement with a party that holds a third party interest in any player registered, or to be registered, with the Club, save in certain prescribed circumstances:

No Club may enter into an Agreement with a party whereby that Club:

• makes or receives a payment, whether directly or indirectly, or
• assigns, novates, sells, grants, acquires or otherwise transacts in any rights or obligations whatsoever, or
• incurs any liability

to, or from that party as a result of, in connection with, or in relation to

• the proposed or actual registration (whether permanent or temporary)
• the transfer of registration, or
• the employment or continued employment

by the Club of a player, save where

• the Agreement is permitted pursuant to Regulation B (“Permitted Club Agreements”); or
• the Association has provided its formal written approval of the Agreement in advance pursuant to Regulation D

The evidence revealed that the first and second defendants planned for a third party to pay part or all of the transfer fee of European players who would be registered at Barnsley FC, and presented this proposal at a meeting with the Barnsley FC owner which had been arranged by the third defendant.  They also intended that the third party paid Barnsley part of the market value of a particular player already registered there, to enable Barnsley to keep him, and then for the third party (and the agents, through their commission) to profit handsomely when the player’s transfer value increased and he was sold on.

There were numerous recorded discussions between the defendants about the need for the agents (representing the third party) to have a say in the player’s onward sale, thereby illustrating the potential influence of a third party in the Club’s decisions and the rationale of the regulations prohibiting such arrangements.

The prosecution suggested that if the plans had come to fruition, they would clearly have breached the TPI Regulations.  Our case was that the assistant head coach knew that third party ownership was prohibited and needed an inducement, in the form of a cash payment, to arrange a meeting with the Barnsley owners because he was being asked to do something that was improper and which he knew to be improper.  Therefore, the prosecution used the regulations to demonstrate that third party ownership was prohibited, hence why he needed to be paid, and that it was intended for him to perform a relevant activity improperly.

This case illustrates the potential consequences of performing intermediary transactions improperly.  Agents and managers could face not only disciplinary proceedings for breaches of regulations, but also criminal prosecution and imprisonment for bribery offences.  To the best of our knowledge this was the first criminal case of its kind in this jurisdiction, but key principles having been established, further cases may follow.