Three Premier League Clubs Withdraw Lawsuit Against Everton and Seek Negotiated Settlement
Three Premier League clubs, Burnley, Leeds, and Leicester, have decided to withdraw their claim for compensation against Everton and instead pursue a negotiated settlement. Last May, the clubs had served notice of their intention to sue Everton in a letter to the Premier League. An independent commission chaired by David Phillips KC had ruled that the clubs had a potential case. The trio were preparing to sue for £100 million each after being relegated from the Premier League in recent seasons, which could have resulted in Everton paying £300 million in compensation.
However, according to the Daily Mail, the aggrieved clubs are now leaning towards private discussions with Everton instead of pursuing legal action. This change in approach comes after Everton was hit with a ten-point deduction for breaching profitability and sustainability rules. There are concerns about Everton’s ability to pay any fine imposed by the commission, as the club is relying on £20 million-a-month loans from prospective buyers 777Partners to fund its day-to-day operations. If Everton agrees to negotiate, the case would go to arbitration instead of being heard by the league’s independent commission.
Burnley, Leeds, and Leicester are now conscious of not wanting to be responsible for pushing Everton into administration. The clubs believe that pursuing a negotiated settlement would be a more amicable solution. Everton’s breach of profit and sustainability rules occurred when they recorded financial losses of £44.7 million for the 2021-22 season, bringing their three-year total to £124.5 million, exceeding the Premier League threshold of a maximum loss of £105 million across three years by £19.5 million.
It is believed that Burnley, Leeds, and Leicester had contacted 777Partners before the ruling to express their intention to sue if Everton was found guilty. Burnley had suffered relegation in 2022, with Everton’s overspending helping them secure safety by four points. Leeds and Leicester, who were relegated from the Premier League last season, argue that Everton should have been docked points during the 2022/23 campaign, where they narrowly avoided relegation by two points.