How the National League lost the dressing room as some of its clubs vote to end the 2020/2021 season early

February 26, 2021 Advisory

Since it was first introduced in 1898, the principle of automatic promotion and relegation has been the integral cornerstone of English football. Bolton Wanderers and The Wednesday were the first clubs in history to slip through the ‘trap door’, whilst Manchester City and Glossop North End enjoyed the first ever sip of that promotion Champagne. Compare that to today’s game, when football clubs competing in England’s National League North (NLN) and South (NLS) divisions (Step 6 of the English football pyramid) voted to curtail the 2020/2021 football season early and with immediate effect, and to declare the season null and void – so no champions, no promotion and no relegation.

However, clubs in the National League (Step 5 – one rung up from the NLN and NLS) have voted to carry on and complete the season, which means that there will be promotions from that division into League Two of the English Football League, but no relegations to the NLN and NLS, thus plunging the top three divisions of English non-league football into disarray.

The Final Score – Null and Void?

The vote – and the eventual decision – is borne out of the financial hardships of the COVID-19 pandemic. Clubs at this level of the English football pyramid do not enjoy the same financial success of the Premier League. They are often community-focussed clubs that rely heavily on gate receipts as their main source of income. Without paying crowds for nearly a year now, some clubs are struggling to make ends meet. In October 2020, Culture Secretary Oliver Dowden MP had announced that all National League, NLN and NLS clubs would receive a share of £10 million of funding from a National Lottery promotional fund (rather than from money allocated for National Lottery Good Causes or by Camelot) to support them to the end of 2020. Then in November 2020 the Government announced that as part of the Sports Winter Survival Package, National League clubs at steps 1-2 could expect to receive a further £11 million in funding to support them to the end of the season.* National League clubs were under the mistaken belief that the second tranche of funding would constitute a grant too, however, controversy was soon to be found when the Department for Culture Media and Sport (DCMS) announced that the funding would actually be given by way of loans, prompting Sports Minister Nigel Huddleston MP to state that "at no stage was the National League told by DCMS that its support would only be in the form of grants" and that it was “unfortunate that the National League chose to communicate this to clubs without first clarifying the nature of the support with DCMS”.

The net result is that some clubs such as Dorking Wanderers and AFC Fylde - both flying high in their respective divisions and who voted to play on - are stopped from doing so, mainly by clubs threatened by relegation who make up the majority of those clubs that voted to stop playing. Meanwhile, Dover Athletic in the National League, which last week said that it cannot continue to incur the costs of playing behind closed doors without the long-awaited central funding materialising, is forced to play on. With no promotion or relegation on the cards, the likes of Dorking will feel very hard done by, whilst Barnet (who have picked up just 12 points so far this season after being catapulted into the play offs on points per game last season) will be breathing a huge sigh of relief.

A footballing authority being accused of scoring an own goal is not something new or unique to this season. When the COVID-19 pandemic first started to take a grip on the world in March 2020, all football in England was stopped immediately. Whilst the Premier League and the EFL Championship eventually got going again and managed to complete the 2019/2020 season in front of empty stadiums over the summer, all other divisions in England stopped play. But, unlike the latest decision in the NLN and NLS to null and void the season, the outcome of 2019/2020 was instead decided on a novel points per game (PPG) basis – which itself attracted heavy criticism from those clubs who were disproportionately affected by the decision either by premature demotion or by missing out on the playoffs, whilst other clubs enjoyed early promotion, or elevation from mid-table into a playoff place.

The overarching criticism of the game’s governing bodies in 2020 was that they pitted clubs against one another – clubs that likely would vote in favour of self-preservation – instead of displaying strong leadership in troubling times. For National League clubs, it seems that those lessons of 2020 have not been learned, and the 66 member clubs are once again left in limbo.

Extra Time – Legal Remedies?

So what now? The Football Association must still ratify the decision, but already clubs up and down the country are turning to lawyers to work out how the decision can be overturned or upheld (depending on your partisanship!).

A precedent was set last year with PPG, but with that now seemingly not being followed (nor was it even an option on the voting slip), does that mean that the decision to null and void the season is invalid? Or can last season’s decision be overturned? The latter is very unlikely, not just because we are now another year down the line and clubs that were promoted and demoted last season have now invested in their new divisions, but because the question has already been tried and rejected north of the border in the Scottish leagues. However, there are other legal remedies potentially available to disaffected clubs.

In France, Amiens SC and Toulouse FC – who had both been relegated from Ligue 1 on PPG – had their respective relegations suspended for a time by the French Supreme Administrative Court (Conseil d’Etat) on a technicality that the governing agreement between the French Football Federation and the French Professional Football League was due to expire in June 2020, before the commencement of the 2020/2021 season, and therefore could not be relied upon when planning for the following year. The rest of the Ligue 1 eventually voted on a new agreement and to retain its 20-club status on the back of a promised new television deal (rejecting the proposal to expand to 22 clubs), and both relegations were confirmed.

In Belgium, however, Waasland-Beveren were spared relegation by the Belgian Competition Authority who suspended the decision to relegate them from the Belgian top flight on PPG due to a possible infringement of EU competition law. This prompted a re-think by the Belgian league, and Waasland-Beveren were eventually saved when the Belgian Pro League voted to restructure the division for the 2020/2021 season.

Whereas in the Netherlands, just like in the NLN and NLS, all football in 2019/2020 was declared null and void with no champion and no relegation or promotion.

The PPG ship of 2020 has already sailed, so clubs should concentrate on the possible challenges to this season’s outcome. The first port of call will be to check whether or not the vote satisfied the requirements contained in constitutional documents of the National League and/or relevant legislation – including notice requirements, etc. Clubs will also want to study the constitutional documents to make sure that the outcome of the vote does not conflict with any of the other Standardised Membership Rules (Rules). If a crease in the process is found, there may be grounds for a successful Amiens/Toulouse-style application to overturn the decision on a point of procedure.

Aside from constitutional challenges, affected clubs may alternatively wish to exercise their rights as members, and may consider a claim for relief under section 994 of the Companies Act 2006 on the grounds of unfair prejudice caused by the conduct of the company’s affairs. Such conduct under scrutiny would be the management decisions, but does not extend to actions of other shareholders (i.e., their individual votes). One of the considerations that the court will have when deciding whether there has been any unfairly prejudicial conduct is the economic detriment suffered by a member club (such as the financial cost of being denied promotion), but the court has a broad discretion to also consider equitable principles more generally – including whether a club has been treated unfairly.

Another avenue to consider is restraint of trade. Is the decision to stop some football clubs from playing football a reasonable one? Stevenage tried – and failed – on this count in 1996 when they were prevented from being promoted to the Football League on grounds that their stadium did not meet entry requirements: ‘unfair’ changes to the rules could not be challenged retrospectively after implied acceptance of the rules. Mr Justice Carnwath was also eager to point out that he considered the correct forum for consideration of the rules is within the “structure established by the Football Association and the other responsible bodies”. Only “in an extreme case” would the court have jurisdiction to set aside such rules.

With that in mind, there is a set process contained in rule 16 and Appendix A of the Rules that the clubs should follow: first, a ‘protest, appeal, claim or complaint’ must be made to the National League Board for determination. If the complainant club is still dissatisfied with the outcome, the decision of the Board can be appealed to the FA. But disgruntled clubs will need to act fast – the time limit of 14 days to begin such action has already started ticking.

Any club considering action must be mindful of the decision in Stevenage and, in all circumstances, any challenge to the decision of the National League must be brought promptly, because delay may cause prejudice to third parties (such as other member clubs) leading to any relief sought being refused.

Going to Penalties?

The outcome of the current National League season is still far from decided – despite the result of last week’s vote. We may soon see the battle on the pitch becoming a battle in the court room. But what is clear from the precedents set across Europe last season, and just like in football, there will be a winner, there will be a loser, and the courts will try to referee as fairly as possible when deciding whether or not the final decision of the footballing authorities is a reasonable one.

It remains to be seen what impact this mixed decision by the National League clubs will have on the Football League above and the rest of the non-league pyramid below. At the time of going to press, news was breaking that steps 3-6 of the non-league pyramid will also immediately end on a null and void basis (subject to FA ratification). So, after celebrating the first ever promotion to the old First Division back in 1898, Glossop North End now of the Northern Premier League Division One South East may well be popping the champagne corks again, this time toasting a reprieve from a relegation battle.

If you have any questions, please contact your regular Armstrong Teasdale lawyer or the lawyers listed on this advisory.

*Except Wrexham, which, despite competing in the English football pyramid, is registered in Wales and therefore came under the jurisdiction of the FAW.

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