Important changes to The FA’s Regulations on Intermediaries
Published 29 September 2017 By: Nick De Marco QC
The most important changes were the introduction of the following new Regulations:
B11 - An Intermediary shall only enter into a single Representation Contract with the same Player at any one time.
B12 - An Intermediary shall not enter into a Representation Contract with a Player under an exclusive
Representation Contract with another Intermediary.
B13 - A Player shall not enter into a Representation Contract with an Intermediary whilst under an exclusive Representation Contract with another Intermediary.
G3 - An Intermediary should use all reasonable endeavours to ensure that the Organisation through which he operates shall comply fully with the requirements of the Rules of The Association and these Regulations in relation to any Intermediary Activity carried out by that Intermediary.
Regulation B11 essentially provides further protection for the player. Representation Contracts can only be for a maximum term of 2 years, a sensible period given the average length of a player’s employment contract. The 2-year period offers some protection for the investment by the intermediary in the player, but also allows a player who may have had a substantial change in his prospects over the period the freedom to find a different intermediary, if he so wishes, at the end of a reasonable period. Intermediaries were entitled to enter fresh 2-year contracts with the same player at the end of the term, and go on doing so indefinitely, but on each occasion the player will have the choice to find a different intermediary, or decide not to have an intermediary at all.
Some intermediaries realised there was a loophole. There was nothing in the regulations that prevented them from entering a new 2-year contract set to start after the expiry of year 2 of the existing representation contract, but entered in to, for example, during year 1 of the existing contract, perhaps before the player had thoughts of moving intermediary. As such, an intermediary could add an additional year or so to the 2-year period if he entered the new contract during the term of the existing one. Regulation B11 closes this loophole.
Regulations B12 and 13 essentially deal with “poaching” – where a competitor intermediary agrees to represent a player despite the fact the player is already under contract with another intermediary. This kind of activity was previously prohibited under the old FA Agents Regulations, but, since the process of de-regulation and the new Intermediaries Regulations in 2015, The FA relaxed the prohibition. Some of us predicted this would lead to a big rise in civil disputes between intermediaries – and so it did. There was a significant increase in FA Rule K arbitrations brought by intermediaries against players and competitor intermediaries for breach of contract/inducement to breach contract. The FA have realised this and re-introduced the regulations aimed at prohibiting poaching.
There are two important points to make about these new Regulations. First, B12 and B13 do not provide an alternative remedy for an intermediary who has had a player walk out of a contract and Register to another intermediary during the term of a Representation Contract. The intermediary’s most effective remedy remains bringing a claim by way of FA Rule K arbitration, in which damages for the losses suffered are available. The FA’s regulatory scheme cannot compensate the wronged intermediary – it only provides a regulatory deterrence to the poaching intermediary.
Second, on the other hand, the duty on the new intermediary under the regulations would appear to be greater than at law. For an intermediary to be found to have induced a breach of another intermediary’s contract at law it is necessary for the intermediary to have known that the player was already under a Representation Contract (or at least turn the proverbial blind eye to the fact). The wording of regulation B12 might suggest that such knowledge is not a necessary ingredient for an intermediary to be in breach – though such knowledge shall no doubt be relevant to any sanction. In the circumstances, intermediaries would be well advised to check with The FA to ensure a player they are agreeing to represent is not already under a Representation Contract at the time. Regulation B13 places a duty on the player also.
Finally, new regulation G3 creates a type of vicarious liability. Many intermediaries are part of larger agencies. Regulation G3 suggests that any intermediary working for a larger agency has a duty to ensure that not only he or she, but also the agency (and thus others working for it) comply with The FA Regulations – though of course limited to compliance in relation to the activity the intermediary is engaged in. What amounts to “all reasonable endeavours” under the regulation is likely to be a contested, and highly fact sensitive, issue.
The new regulations are likely to be broadly welcomed by those working within football, most of whom lamented the de-regulatory steps taken by The FA since 2015. It remains to be seen whether The FA has the resources or will to apply them, and how they shall be applied. One interesting question that may arise is what, if any, legal duty The FA may be under to take action against, for example, a player or intermediary reported as breaching Regulation B12/13 by another intermediary. There is a good argument that all FA registered intermediaries (and all other Participants) have a contractual right to expect The FA to reasonably apply the terms of the contract (i.e. the regulations) to which the intermediary is obliged to adhere to, and that the failure of The FA to do so may amount to a breach of contract.
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Nick is rated a leading silk in Sports Law and is a member of Blackstone Chambers.
He has advised and acted for a number of sports governing bodies, athletes, most Premier League football clubs and many world-class football players in commercial and regulatory disputes.