Examining the Court of Appeal ruling in the case of Imageview Management Ltd –v– Kelvin Jack

Imageview Management Ltd v Kelvin Jack [2009] EWCA Civ 63, is an English Court of Appeal case which provided the Court with an important opportunity to analyse the fiduciary duties of football agents. In a very clear and concise judgment, Lord Justice Jacob put the issue before the Court succinctly: “What if a footballer’s agent, in negotiating for his client, makes a secret deal with the club for himself on the side?”

The footballer in question was Trinidad and Tobago’s international goal keeper, Kelvin Jack. The respondent in this case had instructed an agent, Mr Berry, to act for him in a proposed move to Dundee United in 2004. Mr Berry operated through a company known as Imageview Management Ltd, the appellant. By way of an agency agreement, Jack agreed to pay Berry 10% of any wages received from Dundee Utd. Berry negotiated a 2 year deal at £700 per week for Jack. In the course of negotiations between Berry and Dundee United, and unknown to Jack, it was agreed that Dundee United would pay Imageview a fee of £3,000 for getting Kelvin Jack (who was of course a non-EU national) the necessary work permit.

When the respondent discovered what had taken place, he ceased paying commission to Imageview, and sought repayment of all commission already paid. When he asked Berry why the payment had been concealed from him, Berry replied that “…it was none of your business.” However, Berry was ultimately proved wrong. The judge at first instance found that the “real cost” of Jack’s work permit was £750 rather than £3,000. Berry, through his company, had sued Jack for the balance of the commission. Jack counterclaimed not only for a refund of the commission he had already paid over, but also for the £3,000 Barry had obtained from Dundee United. The Court of Appeal found for Jack on both counts. The Court of Appeal held that no further commission was payable, and, in addition to this, all commission already paid to Imageview was to be refunded to Kelvin Jack.

This may seem a somewhat draconian remedy to some, but it illustrates the seriousness with which the law regards breaches of fiduciary duties between those that are required to comply with them. The term ‘fiduciary’ means trust, so in a fiduciary relationship one person (the client) places his or her confidence, good faith, reliance and trust in another (the agent), whose aid, advice or protection is sought in some matter.

By doing a deal with Dundee United, Barry was allowing his personal interests to conflict with his primary duty to his client, Jack. Although it is arguable that it was in Jack’s interests to obtain a work permit (in order to play football for Dundee United), this was primarily ‘a matter for the club’ because Dundee United would still pay Jack irrespective of whether or not he played for them. The conflict arises because the more money the agent obtains for himself, the less he will obtain for his client. It follows from this that the interests that fiduciary law seeks to protect are therefore actually financial interests despite the terms of the agency agreement which referred to Jack’s “best interests”.

Jacob LJ said in his judgment at para 6: “The law imposes on agents high standards. Footballers’ agents are not exempt from these. An agent’s own personal interests come entirely second to the interest of his client. If you undertake to act for a man you must act 100%, body and soul, for him. You must act as if you were him. You must not allow your own interest to get in the way without telling him. An undisclosed but realistic possibility of a conflict of interest is a breach of your duty of good faith to your client.”

Jacob LJ did not pull his findings out of thin air but instead drew on three significant and historic cases regarding the law on fiduciary duties (Boston Sea Fishing v Ansell (1888) 39 Ch. 339, Andrews v Ramsay [1903] 2 KB 635, and Rhodes v Macalister (1923) 29 Com Cas 19). His analysis of these authorities illustrated that the rules against secret profits have in fact been long established by the Courts. Yet cases continue to arise before the Courts of agents failing to understand this fundamental area of law. Somewhat significantly, it is clear that where an agent honestly believes that what he is doing is legal, ignorance of the law makes no difference. As a result of this the remedy of repayment of all commission remains the standard in such cases and is difficult for agents to argue against.

So how should or could Berry have acted in order to stay upon the correct side of the law? Well he could, of course, have refused to enter into any sort of side deal with Dundee United. There was, however, another possibility open to him. In the words of Lord Atkin in Rhodes (p. 29):

“The complete remedy is disclosure, and if an agent wishes to receive any kind of remuneration from the other side and wishes to test whether it is honest or not, he has simply to disclose the matter to his own employer and rest upon the consequences of that. If his employer consents to it, then he has performed everything that is required of an upright and responsible agent.” Therefore had Berry disclosed the payment of £3,000 to Jack, and Jack had consented to receipt by Berry of this sum, Berry would have been able to retain it.

This case was one that caused the Court of Appeal no difficulty in reaching a finding: the underhanded and clandestine nature of Berry’s activities left the Court in no doubt that repayment of the entire commission was the correct outcome in the case. However, Jacob LJ also took the opportunity to explore less clear cases, in which a football agent may be permitted to retain some commission even though he would be in breach of his fiduciary duty to his client. Again, in the words of Lord Atkin (Keppel v Wheeler [1925] 1 KB 577 at 592):

“Now I am quite clear that if an agent in the course of his employment has been proved to be guilty of some breach of fiduciary duty, in practically every case he would forfeit any right to remuneration at all. That seems to me to be well established. On the other hand, there may well be breaches of duty which do not go to the whole contract, and which would not prevent the agent from recovering his remuneration; and as in this case it is found that the agents acted in good faith, and as the transaction was completed and the appellant has had the benefit of it, he must pay the commission.”

Cases in which the agent is held to be entitled to retain a certain proportion of his commission are more than likely to be extremely rare. Therefore the onus will also lie on the said agent to establish his right to retain the commission from his client.

This case clearly show that Courts will strictly uphold the duties imposed by the law on football agents and that it is important that agents bear in mind the need to be transparent, and open and honest in all their dealings. Unless Jack had discovered the secret deal in the first place, he would as of the time of the decision in 2009, be approximately £76,000 or so worse off. Whether or not all football agents are fully aware of this decision remains to be seen.

Disclaimer: The views expressed are those of the writer and this article does not constitute legal advice.