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Mitigating Circumstances and Strict Liability of Clubs in Match-fixing: Are We Going in the Wrong Direction? An Analysis of the Novara and Pro Patria Cases - By Mario Vigna


Editor’s note: Mario Vigna is a Senior Associate at Coccia De Angelis Vecchio & Associati in Rome, Italy. His main practice areas are sports law, commercial law, and IP law. He also has extensive experience in the Anti-doping field, serving as Deputy-Chief Prosecutor of the Italian NADO and as counsel in domestic and international sports proceedings. He is a frequent speaker at various conferences and workshops. He was not involved in either of the cases discussed below.


I.               Introduction 

Gambling in football is a popular and potentially lucrative activity. It also raises numerous issues. When faced with the issue of gambling, the European Court of Justice (now Court of Justice of the EU) determined that gambling was economic activity per se, notwithstanding gambling’s vulnerability to ethical issues, and thus could not be prohibited outright.[1] With the legality of gambling established, it was left to the proper legislative bodies (national legislatures, national and international federations, etc.) to regulate gambling in order to guard against fraud and corruption. Gambling was not going to disappear; the dangers inherent to gambling would require attention. 

Given the amounts of money sometimes at stake, it is unsurprising that fraud and corruption are constant threats in football gambling. Match-fixing, i.e. wherein participants in a match deliberately attempt to secure a specific result to allow certain gamblers to obtain favorable rewards, is one prominent form of such corrupt activity. FIFA and UEFA, as well as other relevant bodies, have attempted to regulate match-fixing to protect the integrity of football competitions. After all, illicit gambling not only enables unjust enrichment on behalf of the corrupt gamblers and their accomplices; illicit gambling undermines the trust that spectators have in an activity and can lead to a decline in interest as a result.

The Italian Football Federation (FIGC) has adopted a strict liability approach to deter and punish match-fixing. Under the operative rules, clubs and federations whose agents or members engage in match-fixing activity are liable for match-mixing regardless of whether the club or federation itself knew of or condoned the conduct. Unfortunately, two relatively recent appeal decisions—Novara and Pro Patria—have handicapped this strict liability regime by allowing clubs to escape or reduce their liability on account of dubious mitigating circumstances. These decisions have undermined the efficacy of strict liability as a doctrine, and consequently diminish the efforts against match-fixing.

This blog post argues first that strict liability is effective in deterring match-fixing activity so long as adjudicatory bodies enforce it with appropriate rigidity. In fact, the doctrine of strict liability is widespread, in sports law and other fields, precisely because it can be effective. Next, this post critiques the decisions in Novara and Pro Patria, contending that both decisions misapply the principle of proportionality and erroneously recognize certain circumstances to mitigate against liability. As a corrective to these two decisions, this post concludes by outlining an effective application of strict liability and highlighting important regulatory efforts that out to be adopted. And while the discussion herein focuses on Italian football, the ideas explained are widely applicable across all sports and throughout all levels of competition. 

 

II.             Italian Law, Rules, and Regulations Against Match-fixing in Football

On the eve of the 2006 World Cup, which Italy won, Italian investigators uncovered efforts involving several major football clubs aimed at rigging referee selection for matches. This scandal became known as Calciopoli and implicated clubs from both Serie A and Serie B (respectively the first and second divisions in Italian football). Subsequent investigations in 2011 and 2015 led to additional scandals concerning clubs competing in Serie B and Lega Pro (the third division of Italian football), among them Scommessopoli (Bet City), Last Bet, Dirty Soccer, and Treni del Gol. Match-fixing, it was revealed, was a real problem in Italian football.

The FIGC, as the national football federation, maintains regulatory and disciplinary authority over all Italian football competitions and activity. To address the problem of match-fixing, the FIGC employs a set of regulation that deems match-fixing activity improper and sanctionable under a strict liability principle. Article 4 of the FIGC Code of Sport Justice (CSJ) states:

2. Clubs are strictly liable for disciplinary purposes for the actions of their managers, members and the individuals set forth in art. 1, par. 5

[…]

5. Clubs are presumptively liable for the wrongdoing committed for their benefit by any person. Liability is excluded when it is clearly or reasonably doubtful that the club participated in the wrongdoing or ignored it. [2]

Thus, clubs are liable for match-fixing even if they are not intimately aware of or complicit in the match-fixing efforts that benefit the club; liability is found once someone associated with the club—a player, an agent, etc.—engages via their acts or omissions in match-fixing activity. Match-fixing is explicitly prohibited in Article 7 of the CSJ[3], which also provides that strict liability applies for match-fixing and is punishable subject to the degree of fault borne by the club.[4] Here, it is important to note that under Article 7 the adjudicating body has discretion to assess a club’s degree of fault and reduce accordingly the corresponding sanction(s). This discretion is important; it is, however, in making use of this discretion that the appeal bodies erred in Novara and Pro Patria.

 

III.           Novara and Pro Patria: Setting the Wrong Precedent

The FIGC Code of Sport Justice applies strict liability to clubs for match-fixing but allows for consideration of mitigating circumstances to reduce the sanction(s) if appropriate. The problem is that currently there is no standard for what qualifies as appropriate mitigating circumstances. Novara and Pro Patria highlight this problem. In both cases, Italian football clubs—Novara Calcio and Aurora Pro Patria—were sanctioned for match-fixing, but later had those sanctions reduced on appeal on the basis of mitigating factors. This blog post contends that those reductions were ill-informed. If strict liability is to work as a deterrent and truly discourage match-fixing, acceptable mitigating factors against strict liability require greater scrutiny than provided in these two cases.

A.    Novara Calcio

An investigation by the Italian media, coined Scommessopoli, uncovered one of the largest match-fixing schemes in Italian footnall history. Scommessopoli was a wide-ranging, multi-dimensional enterprise; players were involved, as were Italian and foreign criminal groups—in total, the investigation alleged that at least twenty-two clubs and sixty-one people participated in match-fixing efforts. One of the individuals involved, Cristian Bertani, played for Novara Calcio, a club in the Italian Serie B. According to the findings of the National Disciplinary Commission, Bertani conspired with a foreign gambling group and a local criminal group to fix matches. Consequently, the National Disciplinary Commission sanctioned Bertani’s club Novara Calcio under the strict liability regime in effect. Novara Calcio was fined EUR 35,000 and received a four-point deduction from the league table.[5]

The club appealed the decision to the FIGC Court of Justice. On appeal, the court reduced the deduction to three points and eliminated the fine entirely:

“[The reduced sanction] leads to a more accurate assessment of the overall conduct of the Appellant of all the activity carried out by the club, whether in a preventative or subsequent manner, specifically aimed at fighting the phenomenon of illicit sports or eliminating the consequences… In this sense, recalling among others, the approval by Novara Calcio of the first organizational model of the legislative decree no. 231/2001 related to the Code of Ethics; earning the ISO 9001:2008 certification of quality, being the first football association to earn it; having contracted since February 2012 the professional services in order to study the betting quota over the matches played by the club, bringing a discipline scheme over those studies thanks to an Antifraud Code in April 2012 [6]

In essence, the Court reduced the sanctions on account of the club’s implementation of self-protection tools in accordance with the organizational model set forth in the Legislative Decree no. 231/2001. The problem with this decision, however, is that the efforts in question were taken after the incident. The Court treated this post-incident measures as mitigating circumstances, even though these measures were not operative when Bertani attempted to fix matches.

Such allowance of post-incident mitigating factors is inappropriate and undercuts the effort to prevent match-fixing. Indeed, only the prior adoption of an adequate organizational model against match-fixing by a club should (potentially) mitigate against strict liability. Two requirements should be satisfied: (1) prior adoption, and (2) adequate measures. Legislative decree no. 231/2001 and Italian jurisprudence both distinguish between superficial adoption of an organizational model—which is insufficient by itself—and the adoption of an organizational model with demonstrated sufficient, concrete measures to prevent wrong-doing. Only the latter satisfactorily deters potential wrong-doing, and only the latter should (potentially) shield against strict liability so long as a club can prove its preventative efforts were adequately effected. With Novara Calcio, the problem was that the adoption of an organization model was merely superficial, in addition to being after-the-fact, and that the club did not have to prove that the adopted measures were or would be effective in combatting match-fixing.

B.    Aurora Pro Patria 

In 2015, the Catanzaro Police Department arrested more than forty individuals for alleged participation in match-fixing in matches of the Italian 4th Division. Three arrestees were former members of the club Aurora Pro Patria—two players and one coach—accused of match-fixing activities while employed by Pro Patria. All three were found guilty in the ensuing proceedings. Thus, under the doctrine of strict liability, Pro Patria received a seven-point deduction as a sanction for the conduct of its employees.[7]

Pro Patria appealed the ruling and sanction. And like the Novara case, the sanction was reduced: 

Having found the defendant liable, it cannot but follow the confirmation of the strict liability held by the association (Club). As marked by the vast jurisprudence, indeed, the referred liability cannot be avoided but graduated in the presence of circumstances that would see to deserve special consideration.

… the thorough preventative activity put in action by Aurora Pro Patria, that even when they were not obliged to, they still adopted the model of conduct as set out in the rule Legislative Decree no. 231/2001, they imposed a Code of anti-fraud and have entered into a contract with Federbet [a monitoring company] by which said company will check the flux of the bets related to the activity of the club, we determine that, given the relevant circumstances, the sanction against the association (club) must be reduced…”[8]

The Court reduced the sanction to a three-point deduction. Although the appeal court affirmed strict liability, it undercut its potency by accepting as mitigating circumstances factors that were not in place when the unlawful conduct occurred. The appeal court was in some ways excusing a violation, at least partially, for efforts the responsible party undertook to not commit the same violation again in the future. The efforts had no impact on the violation that already took place.

C.    Problems Posed by the Novara and Pro Patria Rulings 

After being charged with match-fixing, both Novara and Pro Patria hired monitoring companies that supposedly help prevent, or at least detect, potential match-fixing activity. These post-facto efforts were deemed by ruling bodies compelling enough to reduce sanctions imposed for match-fixing. This precedent of reducing on account of mitigating circumstances occurring after the match-fixing activity occurred poses two issues.

First, the precedent undermines the strict liability regime by allowing the reduction of a club’s liability where it fixes the problem ex post facto, thereby providing clubs with a loophole to escape with minimal harm. Second, the precedent does not consider the actual efficacy of the hired monitoring companies or their methods. Without a regulatory framework and established standards for monitoring companies and certification of their services, i.e. no way of assessing whether the hired companies actually make any difference when it comes to the prevalence of match-fixing, nothing separates effective monitoring from the appearance or claim of monitoring.

 

IV.           A Better Way of Evaluating Mitigating Circumstances

An adjudicatory body rightfully must consider the particular context of each case. Accurate and fair decisions acknowledge that not all cases concerning similar issues deserve equal treatment. Mitigating circumstances are an important aspect of any fair legal system. With Novara and Pro Patria, however, the appeal bodies erred by giving weight to certain post-incident mitigating circumstances that had no bearing on the issue at hand. Further, allowing the hire of a monitoring company to mitigate a club’s liability introduces a separate issue, i.e. the efficacy of the monitoring company and its services. Both appeal decisions reduced the capacity of strict liability to deter match-fixing. If a strict liability regime is to be effective in combatting match-fixing, then clear standards for evaluating mitigating circumstances in cases like Novara and Pro Patria are necessary.

Before proposing a way forward, it is important to first try and understand why the appeal decisions reduced the sanctions in the cases at hand. Inherent to the appeals’ justification is the doctrine of proportionality, or the notion that any punishment must fit the crime and cannot be more extreme than is warranted. In Novara and Pro Patria, it seems that the appeal bodies thought that the clubs’ liability for the conduct of their employees should be limited. In other words, while the appeal bodies certainly assigned liability to the clubs, they were unwilling to allow that liability to support too onerous sanctions.

This, of course, misses the point of strict liability in the first place. Strict liability is used to assign liability notwithstanding immediate fault because the liable party is best positioned to absorb the liability and/or work to prevent the wrongful conduct. Punishments for strict liability in match-fixing, if reduced to minimal amounts, do little to nothing to promote clubs to actively prevent match-fixing. The Court of Arbitration for Sport (CAS) re-affirms this point:

With regard to the alleged disproportionality of the Decision, the Panel first of all wishes to stress that the fight against match-fixing is considered to be extremely important for the purpose of preserving confidence in and the integrity of sport.[9]

Part of the proportionality calculus must be the severity of the wrongdoing concerned. Match-fixing is, arguably, the greatest wrong in sports. Therefore, hefty punishments should not violate proportionality. 

The Novara and Pro Patria appeal decisions also over-value the post-incident preventative actions (which is an oxymoron!). The treatment of post-incident actions as mitigating circumstances suggests future offenders will be able to correct wrongful conduct after-the-fact simply by hiring a company that claims to monitor match-fixing activity. Even if a club were to hire a monitoring company prior to any wrongful conduct, the mere signing of a contract with a monitoring company is generally a questionable preventative measure. Clubs that employ monitoring companies and are then subsequently charged with liability for match-fixing should only have sanctions (and thus liability) reduced if they prove to the court that the monitoring company undertook actual and sufficient efforts to monitor and prevent match-fixing.

Merely employing a monitoring company without any regard for the efficacy of its services is an inadequate escape route from strict liability. After all, these companies are unregulated and unaccredited; there is no guarantee that the companies do any work, or that any work the company performs is effective. At a minimum, then, a club must demonstrate that in conjunction with a monitoring company it undertook significant and adequate measures to prevent match-fixing by its employees and agents.

A standard for monitoring companies is important in light of the Novara and Pro Patria rulings, which will support a booming (and unregulated) market for monitoring companies. Clubs may now look to symbolically contract with these companies to escape liability if/when they are accused of match-fixing. The football community should not allow such a deregulated and opaque market to emerge.

 

V.             Conclusion

Match-fixing poses one of the most elemental dangers to professional football—it damages the credibility of the sport and could potentially damage the market. The doctrine of strict liability discourages a club’s participation in match-fixing activities, and incentivizes clubs to put into place measures that ensure their employees abide by anti-match-fixing regulations. Judges and tribunals must not lose sight of the broader picture when determining sanctions in match-fixing cases. In light of the Novara and Pro Patria decisions, this blog post offers a way forward to maintain strict liability’s capacity to effectively combat match-fixing: (1) post-incident efforts should not be considered as mitigating circumstances, and (2) monitoring companies and their services must meet a certain standard if they are to absolve, partially or fully, a club from its liability.

Strict liability can be effective so long as courts and tribunals do not unduly handicap it. Match-fixing is still a prominent threat in football and in sports in general. Now is not the time to weaken the most effective tool (strict liability) available to combat match-fixing. While the preceding discussion focuses on Italian football, the lessons are universal for all sports, at all levels.


[1] Case Her Majesty's Customs and Excise v. Gerhart Schindler and Jôrg Schindler, C-275/92 Judgement of 24th March 1994 [1994] ECR 1-01039.

[2] Unofficial translation from Italian: “Responsabilità delle società 1 […]; 2. Le società rispondono oggettivamente, ai fini disciplinari, dell'operato dei dirigenti, dei tesserati e dei soggetti di cui all’art. 1 bis, comma 5; 3 […]; 4 […] 5. Le società sono presunte responsabili degli illeciti sportivi commessi a loro vantaggio da persone a esse estranee. La responsabilità è esclusa quando risulti o vi sia un ragionevole dubbio che la società non abbia partecipato all'illecito o lo abbia ignorato; 6 […].”

[3] “Committing, by any means, acts to alter the development or outcome of a match or competition or to assure any advantages in the ranking constitutes a sporting wrongdoing.” Unofficial translation from Italian: “1. Il compimento, con qualsiasi mezzo, di atti diretti ad alterare lo svolgimento o il risultato di una gara o di una competizione ovvero ad assicurare a chiunque un vantaggio in classifica costituisce illecito sportivo.”

[4] Art. 7, par. 4: It is considered the strict liability of a club in the sense of art. 4, par. 5 and the fact is punishable subject to the degree of fault, with the sanctions foreseen in art. 18, par. 1 sections (g), (h), (i), (l), and (m). Unofficial translation from Italian: “Se viene accertata la responsabilità oggettiva o presunta della società ai sensi dell'art. 4, comma 5, il fatto è punito, a seconda della sua gravità, con le sanzioni di cui alle lettere g), h), i), l), m) dell’art. 18, comma 1.” The sanctions consist, broadly speaking, in the deduction of points, to be sent to the bottom of the table, to be disqualified from the competition, to have a tittle taken away or the barred from participating in a specific competition.

[5] The sport prosecutor had sought a six-point deduction.

[6] Unofficial translation from Italian: “A ciò conduce una più attenta valutazione della complessiva condotta della reclamante, di tutta la attività da questa posta in essere, invero tanto in via preventiva che successiva ed espressamente finalizzata a combattere il fenomeno degli illeciti sportivi ovvero ad eliminarne le conseguenze… In questo ambito vanno riassuntivamente richiamati, tra gli altri interventi, l’approvazione da parte del Novara Calcio del primo modello organizzativo ex decreto legislativo n. 231/01 e relativo Codice etico; l’approvazione nel gennaio del 2012 di un nuovo modello organizzazione e di gestione; il conseguimento nel marzo ancora di quest’anno di certificazione di qualità ISO 9001:2008 come prima società calcistica in Italia; l’aver affidato nel febbraio 2012 a soggetto professionale lo studio dell’andamento delle quote di scommesse legate alle partite che avrebbe giocato il Novara da quel momento alla fine del campionato, successivamente deliberando di continuare l’opera di monitoraggio delle partite; disciplinando infine tale sistema con l’adozione di un Codice Antifrode.”

[7] The sport prosecutor sought a twenty-point reduction as an exemplary punishment and to increase its deterrent effect.

[8] Federazione Italiana Giouco Calcio; COMUNICATO UFFICIALE N. 48/TFN – Sezione Disciplinare (2015/2016), p. 81.

[9] CAS 2013/A/3297 Public Joint-Stock Company “Football Club Metalist” v. UEFA & PAOK FC, award of 29 November 2013. (Case about match-fixing and sanctions under UEFA rules.)

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