Burnley have won a landmark legal case against Everton, with a Premier League independent disciplinary commission ordering the Merseyside club to pay £35m in compensation — the largest financial penalty ever imposed on a Premier League club. The ruling, which Everton have appealed, follows a claim by Burnley that the Toffees’ breach of profit and sustainability regulations (PSR) in the 2021-22 season led directly to their relegation to the Championship.
The same three-man panel that deducted Everton 10 points — later reduced to six on appeal — over the same £19.5m overspend in November 2023 heard the case. The commission found that, on the balance of probabilities, Everton’s breach caused Burnley to be relegated. It awarded Burnley £26m in damages and a further £9m in interest.
“Everton ordered to pay Burnley £35m after commission ruled PSR breach caused their 2022 relegation.”
Both clubs presented expert evidence simulating the effect of the overspend on Everton’s points total. The commission said it found Burnley’s evidence — which projected a gain of between 3.85 and 7.13 points for Everton — “more compelling”. Everton finished 16th on 39 points in 2021-22, one point above the relegation zone, while Burnley finished 18th on 35 points.
The decision has widespread ramifications for the competition and increases the likelihood of more clubs taking legal action against members who have broken league rules. Leeds United are reported to have agreed a settlement with Everton in September 2025, while Leicester City, Nottingham Forest and Southampton were also reported to have considered legal action. Premier League rules allow clubs to seek compensation from other members if rules are broken and cause them loss.
Everton, now owned by The Friedkin Group (TFG) after being taken over in December 2024, said they were “surprised and angered” by the ruling. “The club does not recognise the findings of the panel in determining Burnley’s relegation … was caused by a sporting advantage gained by Everton due to a breach of PSR, for which a substantive sporting sanction has already been received,” a club statement read. The statement added that the ruling “sets a dangerous and unworkable precedent for English football” and that the club believes “an appeal will be successful”.
Everton’s appeal will be “robustly and thoroughly” contested, sources said. The Premier League has assured Everton that the compensation payment will not affect the club’s current PSR calculations. It is not known whether TFG will pursue former owner Farhad Moshiri, who received only £25m from the sale of the club, for the damages.