Ruling against law firm in sports-data dispute
London’s High Court has ruled that a law firm that agreed to run data-privacy claims on behalf of professional sports people is not entitled to invoice for the work.
According to the England-and-Wales Law Society Gazette, Senior Costs Judge Rowley ruled that IPS Law LLP had taken the risk of working unpaid to be in with a chance of a windfall of £6 million.
The case arose from a dispute between the law firm and Global Sports Data Technology Group Ltd, which was co-founded by Jason Dunlop and ex-Cardiff City manager Russell Slade.
They had planned to bring a group claim on behalf of hundreds of professional sports people suing companies for using their personal playing data. The target was intended to be computer-games manufacturers and betting companies who used the players’ personal data for their products.
‘No written contract’
Judge Rowley concluded that IPS Law and its senior partner Christopher Farnell had effectively been in a partnership or joint venture with Global as they agreed to run potentially thousands of data claims.
There was no written contract between the parties, but an agreement that the firm could recover 10% of the potential £60 million in damages they hoped to claim for.
“It seems to me that, once the parties fell out, Mr Farnell’s opportunity to share in the proceeds of any DBAs [damages-based agreements] had disappeared, and that led to the invoices being raised and sent to the claimant,” said Rowley.
The court heard that the parties gave differing accounts of what the financial arrangements were for the venture referred to as ‘Project Red Card’.
Model ‘clear’
Dunlop and Slade met Farnell in 2021 and agreed that the law firm would find litigation funding with the aim of raising £20 million.
Dunlop told the court that it was “clear” from their first meeting that the model was to be 10% to the funders, 10% to Farnell and his firm, and 10% to Global – paid for from the damages under the terms of the agreement between IPS and each individual player or athlete.
Farnell submitted that, as a boutique sports legal practice, IPS Law would only work on the condition that it would be paid for its services. He took comfort from Dunlop’s assurance that “no one expects you to do work for nothing”.
Once the venture failed, Rowley said that invoices worth around £370,000 were raised as “mopping up” bills for work done.
The fact that they had not been produced suggested that these invoices were “more of an accounting solution to convert work in progress into bills, which could be treated as income for the firm”.
‘Potentially lucrative’ project
The judge said this had been a partnership where different entities brought their skills to a potentially lucrative project.
“Such a relationship is not a client-and-solicitor relationship of the sort where an implied retainer exists, and the client is liable to pay the solicitor for doing work even if there is no written documentation,” he added.
“It is very much a matter where each entity puts in its time and effort at its own risk if the project proved unsuccessful.”
Among the legal team acting for Global was former Irish international footballer Gareth Farrelly, who is a senior associate at Glaisyers ETL.