Sportsmen’s agents and lawyers acting as sportsmen’s agents do not play on the same field
The French Court of Cassation, in a decision dated 29 March 2023[1], confirmed that lawyers acting as sportsmen’s agents are not actual sportsmen’s agents and that they can only be paid by their clients.
As a reminder, in a decision dated 14 October 2021[2], discussed in our December 2021 newsletter, the Paris Court of Appeal had overturned the deliberation of the Paris Bar Council dated 2 June 2020 as a result of which Article P.6.3.0.3 of the Paris Bar Rules of Procedure (RIPB) had been adopted.
This new article affirmed the right of lawyers acting as sportsmen’s agents to bring together parties interested in signing a contract relating to the exercise of a sport. It also confirmed that the lawyer’s fees relating to this transaction could be paid to the lawyer directly by the club with whom the lawyer’s client signed the agreement, once the client commissions the club to do so.
The Paris Court of Appeal had considered that the action of putting people in contact with each other could not be an ancillary activity to the legal profession since it was a main commercial activity, essential to the conclusion of the contract and taking place during the contract’s drafting phase. Consequently, the lawyer could only be remunerated by his client and not by the opposing party to the contract which the lawyer negotiates on behalf of his client.
Two appeals in cassation were lodged against this decision, the first by the Bar Council, the second by the Association of sports representatives.
The applicants considered that lawyers have a right to market goods or services related to the practice of the legal profession, as an accessory to their advisory activity. They therefore argued that putting the parties in contact with each other was a service which related to assisting the client with the transaction, meaning the lawyer could provide this service as an accessory to his main activity, without the need to obtain any special license.
On the question of the payment of fees by the sports club who signs the agreement with the lawyer’s client, rather than by the client itself, the applicants argued that this practice did not in any way call into question the lawyer’s obligation to be remunerated by the party he advises, since his client was simply mandating the sports club to pay the fees in his name and on his behalf, at the end of the transaction.
The Court of Cassation was therefore asked to rule on these two questions consisting, firstly, in determining whether acting as an intermediary to the parties interested in concluding a contract relating to the exercise of a sport, was an activity ancillary to the lawyer’s main activity of advising one of the parties to this transaction and, secondly, whether it was possible for a lawyer acting as a sportsman’s agent to be remunerated for this service by the sports club signing the contract with his client, mandated by his client to do so.
The Court of Cassation replied in the negative, citing Articles L.222-7 of the French sports Code and 6 ter, paragraph 1 of Law No. 71-1130 of 31 December 1971, created by Law No. 2011-331 of 28 March 2011, concerning the first point, and Article 10, paragraph 6 of the Law of 31 December 1971, amended by the Law of 28 March 2011, concerning the second point, thus confirming the position of the Paris Court of Appeal.
Consequently, lawyers cannot “either on a principal or on an accessory basis, exercise the activity of a sportsman’s agent“. It is only sportsman’s agents who put players and sports club in contact with a view to them concluding a contract, and the lawyer only intervenes afterwards, as part of his mission to advise one of the parties to the transaction. Moreover, lawyers cannot be remunerated by the sports club signing a contract with their client, even if their client mandates the sports club to do so.
The Paris Bar Council therefore immediately said lawyers acting as sportsmen’s agents should be vigilant in light of this new case law, in which the Court of Cassation confirmed the prohibition on lawyers practising this intermediation activity as an accessory to their usual profession and being paid indirectly by their clients.
[1] Cass. 1st civ., 29 March 2023, n°21-25.335
[2] CA Paris, 4, 13, 14 Oct. 2021, n°20/11621
