Full case report

Stevenage Borough Football Club Ltd v The Football League Ltd

Reference (1996) 9 Admin LR 109; [2006] ISLR, SLR-128
Court Chancery Division

Judge Carnwath J

Date of Judgment 23 Jul 1996


Summary

Sport – football – rules of admission to league competition – restraint of trade – common law rules – judicial review – discretionary relief – delay – prejudice to third parties – claim dismissed


Facts

A football club finished top of the Conference, which normally would have led to it joining the Third Division of the Football League. However, the club did not at the relevant dates satisfy the Football League’s criteria for admission to the League, which included matters relating to its ground and to financial matters. The club expected to meet the requirements by the time the season started. It sued the League for declarations that the criteria were unlawful because in unreasonable restraint of trade. Three points in particular were relied on: (i) the deadline for compliance was unreasonably early and served no useful purpose; (ii) the capacity of 6,000 required by the ground criteria was unreasonably and unnecessarily high; (iii) the financial criteria achieved nothing or so little that they were not necessary to protect the legitimate interests of the League.


Issue

(1)  How the court should apply the doctrine of restraint of trade to the facts of the case, where the complaint related to regulatory rules, and the plaintiff club had no direct contractual or other relationship with the body against which complaint was made.

(2) Whether on the evidence the onus of  proving that the restraints were reasonable or unreasonable had been discharged.

(3) Whether relief should be granted as a matter of discretion.


Held

(1) The onus of showing that a restraint is reasonable as between the parties lies on the party seeking to impose the restraint. But where the restraint is part of a system of control imposed by a body exercising regulatory powers in the public interest the onus of proving that the particular restraint is unreasonable, because it is contrary to the public interest, lies on the party who makes that assertion. If admission criteria are shown to be arbitrary or capricious in effect, whether because of their content or the way they are applied, they are open to challenge. But the onus is on the challenger, and the Court will give due weight to the judgment of the responsible bodies.

(2) The League was entitled to adopt the ground capacity criterion which it had adopted, which were not irrational or arbitrary or capricious. However, the requirement to show compliance with that criterion before it was known whether the club could qualify for promotion was open to objection on restraint of trade grounds. So was the requirement for new entrants to the League, such as Stevenage, to meet financial criteria which were not imposed on existing Third Division clubs.

(3)  However, relief would be refused on the grounds of delay and prejudice to third parties. The club had known about the criteria since May 1995, as had other clubs. All had been able to make arrangements and order their finances with those criteria in mind. Stevenage could have challenged the criteria much earlier, but had not done so. The need for arrangements to be fixed and administered in an orderly way was of particular importance, as were the support of the Conference as a whole for the current arrangements, and the position of Torquay, the club that would be relegated if Stevenage was promoted.


Comment

The decision is of interest on several counts.  The discussion of restraint of trade in this area is important, and the Judge’s review of the authorities on common law ‘judicial review’ claims by persons who have no contractual relationship with the defendant is of value.


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