EuropeLinda HuiComment

The lasting impression of Olivier Bernard

EuropeLinda HuiComment

Olivier Bernard, once a fine full back in Bobby Robson's Newcastle United side, has left his mark on football for reasons not dissimilar to Jean Marc Bosman.  Here's Linda Hui to explain the background and implications.

Under those circumstances, the clubs which provided the training could be discouraged from investing in the training of young players if they could not obtain reimbursement of the amounts spent for that purpose where, at the end of his training, a player enters into a professional contract with another club. In particular, that would be the case with small clubs providing training, whose investments at local level in the recruitment and training of young players are of considerable importance for the social and educational function of sport. - Case C-325-08, Olympique Lyonnais v Olivier Bernard and Newcastle United, paragraph 44

Football can often feel like a world unto itself, particularly in these heady days when it takes 50 odd million to buy you the services of a willowy young Spaniard with dubious hair.

But of course, it's not. That's why we all know the name Bosman. Not for any exceptional qualities as a player, or a particularly memorable goal, but because he brought a court case.

Whatever happened to Jean-Marc Bosman?

Bosman was born in Belgium in 1964. He began his career with Standard Liege, moving to RFC Liege in 1988. In 1990, Bosman's contract with RFC had expired and he wanted to move to Dunkerque in France. Liege, who had dropped him from their first team, refused to let Bosman go on the basis that Dunkerque were not offering an adequate transfer fee. To my sensibilities, it seems outrageous that an out of contract worker isn't free to seek his or her fortune elsewhere. But of course, this isn't the real world. It's football.

Not for much longer, though. Bosman initiated domestic proceedings against his club and the Belgian Football Association. The case progressed through the courts in Belgium and finally found its way to the European Court of Justice in 1995.

Bosman challenged FIFA's regulations in two areas: 1) the transfer system and 2) quota systems limiting the number of foreign players who were allowed to play in a club match. Our concern is with the former.

After considering Article 48 of the EEC Treaty (now Article 45 of the Treaty on the functioning of the European Union, otherwise known as the Treaty of Rome), the court ruled that transfer fees for out-of-contract players who were moving from one EU state to another did constitute an illegal restriction on the free movement of workers. The decision drastically altered the balance of power in football, leading to a further string of rulings granting greater freedom of movement to players, most significantly the case of Andy Webster at the Court of Arbitration for Sport.

The problem of player development

The more recent decisions of the CAS in Mutu v Chelsea and Shaktar Donetsk v Matuzalem indicate a desire to mitigate the negative impact of the Webster ruling upon clubs by awarding them large amounts in compensation. When it comes to academy players without full professional contracts, the situation is a little murkier.

In 2007, a Spanish civil court ruled that Fran Merida had to pay up to 2.2 million pounds to Barcelona for breach of a precontract agreement to sign professional terms with Barca. Spanish clubs welcomed the ruling as protection against encroachment by English clubs during the 'gap years' of 16 to 18, when young players could sign professional terms with clubs in England but not yet in Spain.

Formulating legal strategies alongside other incentives to prevent this type of talent drain has preoccupied youth academies in France and Italy, as well as those in Spain. All of them depend heavily upon precontract agreements that are not always recognised as legally binding. In the Gael Kakuta case, FIFA's Dispute Resolution Chamber recognised Kakuta's precontract with Lens, in which he undertook to sign professional terms with them when he turned 16. Just like the Merida case, the consequence of this finding was that the player became liable for financial compensation as well as a sporting sanction. (Chelsea was held jointly liable because it was found that they had induced Kakuta to breach his contract.)

For Kakuta and Chelsea, the consequences were mitigated when they reached an agreement with Lens after arbitration proceedings at the CAS. The contents of the award are confidential, but we know that Lens agreed to recognise that there had been no valid precontract and that Chelsea paid compensation towards the costs of development.

Given the rate at which clubs - particularly Premier League clubs - are recruiting young players from abroad, and other clubs' increasing resort to legal measures to stop them, this issue is going to run and run.

That's where the case of Olivier Bernard comes in.

The Olivier Bernard story

Olivier Bernard is a retired footballer from Paris whose claim to fame is a 5-year spell at Newcastle, which started when he was 20 years old. Previously, he had undergone training at Olympique Lyonnais, one of the French greats. At the time, professional football in France was governed by the Charter, a collective agreement that obliged trainees to sign their first professional contract with the same club on the expiry of their training contract. If they failed to do so, the club could bring an action for losses suffered.

At the end of his training contract in the year 2000, Bernard was offered a professional contract by Lyon. However, dissatisfaction with the terms offered led him to opt for Newcastle instead. Having lost their prospect and received no compensation for it, Lyon were disgruntled enough to go to court, claiming damages equal to what they had offered Bernard as a yearly salary.

The case was eventually referred to the European Court of Justice by the French Court of Cassation, which asked the ECJ to determine whether the French Charter rules were contrary to the principle of freedom of movement for workers.

Which puts us right back where we started, with Jean-Marc Bosman (remember him)? The Court certainly did, referring frequently to the ruling in that case in its judgment, delivered by the Grand Chamber in March 2010. However, it came to a slightly different conclusion this time around. While holding that the requirement to sign a contract with the parent club was a restriction on the freedom of movement, the Court agreed Lyon, who argued that this particular restriction on freedom of movement could be justified in limited circumstances.

Without getting you all bogged down in ECJ jurisprudence and method, the criteria for a justifiable restriction requires, broadly speaking: 1) a legitimate aim for the restriction, and 2) the restriction to be suitable for the stated aim. Applied to Bernard's case, the Court ruled that: 1) encouraging the recruitment and training of young footballers was a legitimate objective given the social importance of football in the European Union; and that 2) a scheme for compensating the parent club in the case of the trainee signing a professional contract with another club is permissible provided that it is directed towards the objective of encouraging youth development.

The French Charter rules applicable at the time of the Bernard transfer were unacceptable due to the way damages were calculated (based on loss suffered). Instead, the Court suggested that the amount received must correspond to the amount spent on training the player.

Implications for the game

The CEO of the Association of European Professional Football Leagues hailed the ruling as "an important jurisprudential landmark for the future of European professional football and, in particular, youth development". Only time will tell if it will have a significant effect on the behaviour of clubs. On a national level, those in charge now know that they can place limitations on the movement of trainee players up to a certain point.

On an international level, FIFA changed its Regulations on the Status and Transfer of Players in 2001 order to comply with the Bosman ruling. Under the new rules, in a Bernard-type situation the new club would be responsible for the payment of compensation to his parent club. Said compensation is to be calculated from the costs of training the player, adjusted by the ratio of trainees needed to produce a professional footballer and limited by complex safeguards designed to make sure that the compensation paid is not excessive in light of the aim of the rule.

The Court in Bernard didn't explicitly address whether this system was legal under EU law, but given its similarities to the type of system described by the Court as acceptable, it probably has a decent chance.

Note: While I do have a legal background sports law is not my speciality. If there are any mistakes, corrections are more than welcome.

You can follow Linda on Twitter @Blackwhitengrey and read more from her here