Recovery of claims under the solidarity mechanism and training compensation.

Some time ago on the blog, I wrote about the fees due to clubs under the so-called "solidarity mechanism" and training compensation. Interested readers can refer to it HERE and HERE. Today's entry will focus on the procedure for pursuing these claims before FIFA bodies.

The description of the presented procedure is based on the assumption that the club obligated to make the payments has been summoned by the club entitled to receive payment. This action is deliberate because, firstly, before FIFA bodies, it is necessary to demonstrate that the obligated party refuses to pay or disputes the amount requested, or even though they have received the relevant summons, they have not responded to the demand, making it justified to refer the matter for resolution. The response received from the club also allows for an understanding of the likely "procedural" stance. The competent body for resolving such disputes is the FIFA Dispute Resolution Chamber (FIFA DRC), as directly stipulated in the FIFA Regulations on the Status and Transfer of Players ¹⁾RSTP art. 23 in conjunction with art. 22.

APPLICATION CONTENT

To initiate proceedings before the Chamber, a request must be submitted in one of the four official FIFA languages (English, Spanish, French, German). The request should include:

1) Identification of the parties and their addresses,
2) Name and surname of the person representing the club, and if the club acts through an attorney, the relevant power of attorney and the attorney's details, including address information,
3) Presentation of the claimed right or the submitted request,
4) Presentation of the case, justification of the claim or request with indications of the legal basis of the demand and details of the submitted evidence,
5) Documents essential for the resolution of the case,
6) Details, including addresses, of witnesses and persons (natural or legal) involved in the case,
7) Value of the dispute,
8) Proof of payment of the application fee for initiating and conducting the proceedings,
9) Date and signature.

A detailed discussion is needed regarding the issue of evidence that should be attached to the application and the application fees.

In disputes concerning both the solidarity mechanism fees and training compensation, the application must include an official confirmation from the Polish Football Association ²⁾in the case when the applicant is a Polish club, which includes information such as the player's date of birth, all clubs where the player has played since turning 12 years old, including exact dates of the player's registration with the applying club, and determination of the player's status as an amateur or professional player. Additionally, the application must also include a certificate from the Association indicating the start and end dates of the football seasons for the period in which the player was registered with the club applying for the request, as well as proof of payment of the application fee.

In disputes concerning training compensation, it is also necessary to attach an official confirmation from the Association specifying the category of the applying club, as well as information about the category of the club obligated to pay.

In addition to the evidence, it is also necessary to provide essential information to determine both the justification and the amount of the fee, including information about the transfer date, and in cases related to solidarity mechanism fees, also the transfer amount (if known), as this amount is used to calculate the sum to be paid to the clubs that trained the player.

COSTS

As I mentioned, the application should include proof of payment. However, not in every case is a fee required. In cases where the requested amount, whether for training compensation or solidarity mechanism, does not exceed 50,000 CHF ³⁾Swiss Francs, which at the date of the publication of this entry is 196,985.20 Polish Zlotys, the club is exempt from the obligation to pay the fee. For claims exceeding the above amount, the following fees apply:

Value of the dispute (requested amount) Fee for initiating the proceedings:

In the event that the Chamber finds in favor of the applicant and orders the other party to pay the compensation or fee resulting from the solidarity mechanism in the requested amount, the opposing party is obligated to refund the applicant for the fee paid during the application stage. Additionally, the losing party is required to pay the remaining costs of the proceedings, the amount of which is also dependent on the amount of the claim. The costs of the proceedings are as follows:

The costs are divided according to the general rule prevailing in judicial and extrajudicial proceedings. This means that the division of costs between the parties depends on the outcome of the proceedings. If the applicant club requested an award of, for example, 60,000 EURO and this amount was fully awarded against the opposing party, then the club is entitled to a refund of the application fee paid (2,000 CHF because the requested amount exceeded 50,000 CHF, so the club was not exempt from paying the application fee) as the obligation to cover the costs lies with the losing club. The latter is therefore required to pay 2,000 CHF to the applicant club and 8,000 CHF to FIFA.

However, in a similar situation where the applicant club was awarded only 30,000 EURO, it is required to cover half of the costs (as it only partially won the case, 50%). The proceedings costs amount to 10,000 CHF, 2,000 CHF was paid when submitting the application, so the club is required to pay an additional 3,000 CHF in costs to FIFA, while the other party is required to transfer 5,000 CHF to the organization's account.

The regulations, however, provide for two exceptions to the general rule of bearing the costs of the proceedings. The first exception occurs when a case concerning training compensation or solidarity mechanism fees does not require analysis of complicated legal or factual issues, or falls into the category of cases where FIFA has a clear, established position (case law). FIFA can then present the parties with the amount it considers justified in the case at hand and the method of calculation. If the clubs do not object within 15 days of receiving such formal information, the proposed amount is considered accepted, and the application fee is refunded to the party. The second exception applies when the Chamber issues a decision without justification, and the party does not request justification.

DECISION

The proceedings before the Dispute Resolution Chamber are conducted in written form. If the application submitted by the club meets the formal requirements and there are no obstacles to its further processing, it is sent to the opposing club along with information on the deadline, which is ⁴⁾generally 20 days to submit a response containing their position regarding the claims and demands stated in the application. Upon receiving the response or after the unsuccessful expiration of the deadline for its submission, the Chamber proceeds to make a decision on the matter.

In exceptional cases, the Chamber may order a re-exchange of written submissions. Also, as an exception to the rule, the Chamber may order the taking of evidence through the examination of the parties. A hearing is also held if a party requested the admission of witness evidence. The Chamber may also take evidence not specified by the parties. Subject to exceptions described in relation to the issue of costs, the decision is rendered in the form of a ruling, which is then delivered to the parties along with its reasoning.

From the decision of the Chamber, the parties have the right to appeal to the Court of Arbitration for Sport in Lausanne.

Considering that, as mentioned, the proceedings generally take place through the exchange of written submissions, and in cases where the value of the dispute does not exceed 50,000 CHF the applicant is exempt from the obligation to pay the application fee, the process of claiming amounts from the solidarity mechanism and training compensation does not necessarily involve significant financial costs. At the same time, the provisions regarding the solidarity mechanism and training compensation can significantly bolster the budget, especially for smaller clubs.

Importantly, the Dispute Resolution Chamber publishes its decisions at this address, allowing for tracking the jurisprudence of this body. It is therefore worthwhile to monitor the careers of one's trainees and enforce the payment of training fees for players.

Photo: davidpc_ / Foter.com / CC BY-NC-SA

1. RSTP - Regulations on the Status and Transfer of Players
2. in the case when the applicant is a Polish club
3. Swiss francs, which as of the publication date of the entry amounted to 196,985.20 Polish złoty
4. generally 20 days