Class action lawsuit against FIFA and KNVB following Diarra case

Last November, I discussed the ruling of the Court of Justice in the Diarra case, in which the Court ruled that certain FIFA transfer rules are contrary to European law. The main issue at stake was the restriction of the free movement of workers. In that article, I pointed out the possible consequences of that ruling for the world of soccer. Recently, the Justice for Players foundation announced a collective claim for damages against FIFA and the KNVB, among others.

Collective action

Whereas in the Diarra case the Court referred to the disproportionate nature of FIFA’s sanctions against individual players, thousands of (former) professional footballers are now using this ruling to seek collective redress. Reportedly, more than 100,000 professional footballers have suffered damage since 2002 as a result of the transfer rules of FIFA and national associations such as the KNVB. The claim will be brought through a Wamca procedure. A Wamca procedure is a collective action based on the Mass Damage Settlement in Collective Action Act (WAMCA), which allows an interest group to claim compensation through the courts on behalf of a group of injured parties.

The core of the class action is that the imposition of restrictive rules has unlawfully impeded the free movement of workers—in this case, professional footballers—and that they have suffered damage as a result. Referring to the Diarra case, the Justice for Players foundation states that:

1. Players have the right to decide for themselves where they work
2. FIFA would cause unfair competition
3. The sanctions would be disproportionate
4. The rules would be unclear and unfair

The Justice for Players foundation states that players have lost an average of 8% of their career income. When multiplied by tens of thousands of players, the amount of damages quickly runs into the billions of euros. The claim is being filed against FIFA, but also against associations such as the KNVB, which enforced the rules in national competitions. Furthermore, liability is joint and several: if the claim is upheld, each defendant may be required to pay the entire amount of damages.

What does this mean for legal (football) practice?

With the announced proceedings at the Midden-Nederland District Court, this issue is now entering a new phase. How exactly this will unfold and whether the associations will take measures pending a ruling remains to be seen.

The proceedings will proceed as follows. After the summons has been served on the defendant parties and the case has been brought before the court, the court will first rule on the admissibility of the claim. Only then will it rule on the substance of the case regarding the possible liability of the defendant parties. A possible settlement will then be attempted. If no settlement is reached, the court will rule on the claims.

The Justice for Players foundation has launched a website where (former) players can register.

Questions

Several areas of law play a role in this matter, such as contract law, labor law, and EU law. These areas of law are, of course, not limited to the world of soccer.

Do you have questions or a dispute about contracts, liability, or an employment law issue?

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