What is meant by a fiduciary duty?
Under the laws of England and Wales a fiduciary duty is imposed in circumstances where one party is in a vulnerable position as a result of having to place his trust and confidence in another party.
In what kind of relationships will there be a fiduciary duty present?
Under the laws of England and Wales a fiduciary relationship will exist in the following situations:
A relationship between a trustee and a beneficiary of that trust
A relationship between a director and a company
A relationship between partners involved in a partnership
A relationship between a solicitor and his client
A relationship between a principal and his agent
The responsibility of a football agent
a football agent is an individual who is appointed to act on behalf of a professional footballer in negotiating commercial contracts for that player. The commercial contracts can include the players playing contract with their respective clubs and their various sponsorship and promotional contracts with other bodies.
An agent operating in relation to English football must be an official FIFA licensed agent through the English Football Association.
Typically a footballer will pay an agent either by an agreed fixed fee or by a percentage, usually between 10 and 20% of any money earned by that player.
Individual or an agency
As is often the case in modern day football an individual footballer will be represented by a sports agency which employs a specific agent which will be dedicated to that individual player.
Do agents owe a fiduciary duty to their clients?
Looking at the above relationships which involve a fiduciary duty it would be reasonable to assume that a football agent would have a fiduciary duty to a footballer which he represents as the footballer would have to place all his trust and confidence in an agent when a contract is being negotiated. The agent will have the expertise and experience to negotiate the best terms and it is his job to arrange the best deal for his client.
Accordingly it has been held under the common law for England and Wales that a football agent has the following fiduciary duties to the client which he represents:
The duty not to put himself in a position where his duties to his principal could conflict with his own interests
The duty not to gain undisclosed economic benefit from his position as the principal’s agent
This second duty is aimed specifically at dishonest practices often associated with football agents such as secret deals, bribes and bungs.
Example of a football agent breaching his fiduciary duty to his client
In a recent 2009 case a football agent acting on behalf of a footballer from outside the European Union was requested by the club wanting to purchase the services to arrange the organisation of a work permit for that player as is required for players from outside the European Union.
The agent stated that he would organise the work permit on behalf of his player if the club would pay him a fee of £3,000.
The club agreed to pay him the fee and he did not make this information available to his client.
What did the player do in this situation?
When the player found out about the conduct of his agent he ceased paying the commission to his agent through the agency and made an application for the repayment of all the commission already paid.
Why did the agent not tell his client?
The agent did not tell his client as he believed it was none of his business in that it did not directly involve the negotiation of the contract on behalf of his player which was his primary duty.
What was the decision of the court in this case?
In this case the Court of Appeal ordered the repayment of all the previous commission paid to the agent as it felt that the law imposes high standards on agents, of which football agents are not exempt.
The court went on to say that an agent’s own personal interests should come entirely second to the interests of his client.
An agent must not allow his personal interest to get in the way of his duty to his client without telling him.
In stating that he wished to be paid for the organisation of the work permit the agent put his clients potential transfer at risk as the move could have fallen through over the obtaining of the work permit.