Paying the penalty in a football case
In a recent claim brought against Blackburn Rovers Football Club by Henning Berg, its manager, the High Court decided that a contractual payment due as compensation on early termination of Berg’s fixed-term contract by the club was not a penalty and was enforceable.
Blackburn Rovers terminated Berg’s three-year fixed-term contract after just 57 days in the job. There was a provision in Berg’s contract giving Blackburn Rovers the express right to terminate, provided that the club notified him in writing and paid him a sum equal to his gross basic salary for the unexpired balance of the fixed period (£2.25m) as liquidated damages.
The club initially admitted that it was liable to pay the penalty of £2.25m, but later argued that the contractual provision was a penalty clause and therefore unenforceable. It was in the club’s interest for the clause to be deemed a penalty as that would mean that payment under it could not be enforced by Berg, who would then only be entitled to damages for breach of contract under normal contractual principles. That would require him to mitigate his loss, limiting his entitlement to damages by requiring him to take steps to find alternative employment…
If you are registered and logged in to the site, click on the link below to read the rest of the Addleshaw Goddard briefing. If not, please register or sign in with your details below.
News from Addleshaw Goddard
News from The Lawyer
Briefings from Addleshaw Goddard
The Supreme Court in Coventry v Lawrence has altered the approach that courts will take when considering whether to grant injunctive relief or damages.
Data & Information E-Alerts — nuisance calls action plan; £50,000 fine for unlawful calls; simpler security classifications; and more
Addleshaw Goddard has released the 4 April 2014 edition of its Data & Information E-Alerts publication.
Analysis from The Lawyer
Could Slater & Gordon achieve its stated aim of becoming a top consumer brand by acquiring Pannone?
The past five years have not been easy for Addleshaw Goddard. The firm’s revenue fell 7 per cent from £173.1m to £161.9m between 2008/09 and 2010/11 and despite finances looking up in 2011/12, when Addleshaws reported a 30 per cent increase in net profit, it has shown no notable compound growth in turnover since 2007/08.