Burnley have won a landmark legal case against Everton, with the Merseyside club ordered to pay £35m in compensation – the largest financial penalty ever imposed on a Premier League club. The ruling by an independent disciplinary commission, the same three-man panel that deducted Everton 10 points in November 2023 for the same £19.5m breach, determined that Everton's overspending in the 2021-22 season caused Burnley's relegation.
Burnley argued that had Everton been penalised during that season rather than in 2023, the Toffees would have lost enough points to drop into the Championship, while Burnley would have stayed up. Everton finished 16th on 39 points that season, with Burnley 18th on 35 points – just four points adrift. The commission found Burnley's evidence, which projected a gain of between 3.85 and 7.13 points for Everton from the breach, "more compelling" than Everton's. On the balance of probabilities, it concluded, the breach caused Burnley to go down.
“Everton ordered to pay Burnley £35m after commission rules PSR breach caused their relegation in 2022.”
The Clarets were awarded £26m in damages plus £9m in interest. Everton immediately appealed. In a statement, the club said they were "surprised and angered" by a ruling they believe "is fundamentally flawed in both law and fact". The statement added: "This ruling sets a dangerous and unworkable precedent for English football, given it is constructed on a principle that a club can be in breach of financial rules at any point in a financial year." Sources said Everton will "robustly and thoroughly" contest the decision.
The case has widespread ramifications. Leeds United are reported to have agreed a settlement with Everton in September 2025, while Leicester City, Nottingham Forest and Southampton were also said to have considered legal action. Premier League rules allow clubs to seek compensation from members that break rules and cause loss. The £35m payment will not affect Everton's current PSR calculations, and the club's new owners, The Friedkin Group (TFG), who took over in December 2024 from Farhad Moshiri, insist the ruling does not impact summer transfer plans. Moshiri received only £25m from the sale, and it is not known whether TFG will pursue him for the damages.
The verdict raises the question of how many more clubs will now take legal action against rivals found to have broken financial rules, potentially reshaping the landscape of Premier League accountability.