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Basketball Legal Corner

Please send your questions to Legal Corner author John B. Kern
BAT Cases - Collecting the Last Contract Payment - Feb 15, 2012


POSTED BY:
EUROBASKET CENTER
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Today we received a question from Tayron in Mexico:

If I have a contract claim for a small amount - like a final contract payment of $5,000 - is it worth it to take the case to the BAT?

Great question, Tayron.

Over the years, the Basketball Arbitral Tribunal (BAT) has tried to sort out a means of making small claims affordable. The first thing to note is that according to the BAT rules the non-reimbursable handling fee is limited to EUR 1,500 for any case where the claim is less than EUR 30,000 (i.e. $40,000). The fees of the arbitrator were limited for a period of time prior to 2011 to only EUR 2,500 for these cases. In 2011, that rule changed. The BAT rules now provide that the arbitrator is not authorized to spend the time to prepare a written opinion with reasons on these small cases. So, instead of paying the costs of the arbitrator preparing a long opinion, the arbitrator can charge a fee only for reviewing the case submissions and issuing a one page award either granting or denying the claim. The actual amount to be charged by the arbitrator, and the willingness of the responding party to pay their share of the fees, changes from case to case.

Consequently, the costs for a small claim may reach between EUR 3,000 to EUR 5,000 (USD 4,000 to USD 6,500.) The good news is that the BAT arbitrator has the authority to award these costs, as well as attorney's fees, to the prevailing party in any case. Recall that FIBA has the authority to sanction the club for failing to immediately honor the award.

There are a couple of other things you may want to take into consideration in evaluating the claim. First, many contracts have penalty provisions that assess additional damages on a daily basis as a consequence of the club's failure to pay any portion of the contract. The BAT has authorized a penalty of as much as USD 100 per day, but the more traditional figure is either USD 50.00 per day or EUR 50.00 per day. If you are owed USD 5,000, and despite your demands the claim remains unpaid for one year, you may be eligible to recover more than USD 18,000, assuming a USD 50.00 per day penalty. Second, the BAT will award interest on the claim at the rate of 5% per year.

I trust this helps you and appreciate your question.

-----------------------------------------------

The Eurobasket Law Column is written and produced by John B. Kern, an American lawyer with offices in the United States and San Marino, who focuses on international sports rights and arbitrations. The legal principles discussed are general in nature. Laws change and even similar circumstances may call for the application of different laws.

If you have a question for a future edition of the Eurobasket Law Column, please write to Mr. Kern at kern@jbkinternational.com.

2012 JBK Intl Cons. LLC. All rights reserved. 120202
  



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