The repercussions from the landmark £40million compensation award to Burnley, in their case against Everton, are already being felt.The Merseyside club will be represented by the renowned law firm Slaughter and May instead of long-time counsel Pinsent Masons for their appeal, which is expected to be heard later this year, and a new KC is also expected to be drafted in. A decision on the latter is likely to come once a definitive timeframe for the appeal is set.Their chief legal counsel, Katie Charles, widely praised for her astute handling of Everton’s otherwise turbulent takeover process, also departed on May 22, albeit on what the club describe as amicable terms. Everton officials have been keen to point out that Charles’ departure came before the ruling, with a decision handed down on June 2 and made public on Wednesday.In an interview with Talksport, Everton manager David Moyes said he had been aware of the situation for “around four to five weeks”. A draft decision had been sent by the independent commission overseeing the case on April 7, with those matters subject to a further hearing on May 28.The mood now is one of anger and frustration at what is an unprecedented verdict — the first time one Premier League club has sought damages from another over a profit and sustainability (PSR) breach. A club statement described the ruling “fundamentally flawed in both law and fact”.Moyes has known about the situation for weeks (Matt McNulty/Getty Images)Burnley felt they were due compensation after their relegation from the Premier League in the 2021-22 season, the year of the breach in question, but the onus was on them to prove beyond reasonable doubt that Everton’s overspend of £19.5m across the four-year cycle not only contributed to their demotion but also resulted in a considerable loss of earnings. That had Everton not breached, they would almost certainly have stayed up.They emerged triumphant on both counts.Until recently, Everton had not seen this coming. They had been confident of their chances, settling with another club entitled to a compensation claim in Leeds United, but, according to Burnley chairman Alan Pace this week, declining resolution with the Lancashire club “through every available channel”.An Everton source, speaking anonymously to protect relationships, said the Merseyside club had no knowledge of apparent settlement offers, albeit previous attempts through back channels cannot totally be ruled out.What is clear, though, is that at that stage, nobody would have expected the news that dropped this week.Everton have been punished before, of course. They were the first Premier League side to be found to have breached PSR in 2021-22 and handed a 10-point deduction, reduced to six on appeal.In the same season, 2023-24, they were deducted a further two points for a separate breach in the previous year. It is estimated that the club also missed out on around £10million in merit placing money as a direct result. So this is, effectively, their third punishment for that one breach. Legal costs are expected to now run into the tens of millions.At each stage in this process, the belief at the club has been that they have been guinea pigs in this new era of litigation. With no precedent on which to rely, severe verdicts, like the initial 10-point deduction, have been handed down and reduced on appeal. Ironically, given Everton’s ‘club of firsts’ nickname, they were the first team to breach, have points deducted and be sued by a fellow side as a result of their overspend.The unprecedented nature of this verdict, in a new era of litigation, is hard for the club to accept, with the lack of clarity and precedents. It is a test case that will almost certainly shape what is to follow, unless the appeal materially changes things.At times, there has been a sense from those working on the cases, including from those one step removed from the club, that Everton were harshly treated, and that there was a curious level of animus in some of those early dealings.The league made the case for a 12-point deduction in Everton’s first hearing, but maintains that the latest proceedings were a club-to-club dispute with a ruling handed down by an independent panel and that they had no real involvement.There is a general acceptance that the club, in a financial sense, was badly managed under previous owner Farhad Moshiri, to the point where they breached PSR on two separate occasions. And a feeling, from some, that the Everton of that period had their heads in the sand right up until it got serious.Moshiri sold his shares in 2024 to FSG (Paul Ellis/AFP via Getty Images)The relationship with the league is said to have improved since the Friedkin Group (TFG) replaced Moshiri at the helm in December 2024 and a new executive team was installed; something reinforced, all parties believe, by the decision not to count the compensation owed to Burnley against Everton’s future PSR/SCR position.But the latest news has left a sour taste and led Everton to believe they have been harshly treated again, certainly in comparison to other clubs.Chelsea were only handed a £10.75m fine for illicit payments to agents, helped by the fact that their new owners self-reported the issue. The same level of grace did not apply to TFG over Everton’s past misdemeanours during Moshiri’s tenure.Manchester City’s case, in which they strenuously deny breaching 115 of the Premier League’s financial rules, remains ongoing, while so far no other club that has broken the PSR rules — Leicester City and Nottingham Forest among them — have been subject to damages claims from rival teams.Everton are particularly aggrieved with how things panned out in certain areas, and feel they have scope to make inroads in their appeal.Their case was heard by the same panel that deducted them the initial 10 points, and they sought to have those individuals removed from this hearing because the first decision was considered both harsh, with their punishment later reduced by an appeals board. A new committee will hear their appeal over the £4om payment to Burnley.Then there is also the level of stock placed by the commission on the testimony of former Burnley chief executive Dave Baldwin, acting as an expert witness for the Lancashire club.Baldwin, whose partiality was not really called into question, argued that his “lived experience” suggested Everton’s overspend over the four years would “probably” have been worth “at least four points” across that one season.His testimony, during a back and forth between experts on both sides over the statistical impact of the breach on Premier League placings, raised eyebrows on Merseyside in particular.Burnley’s own modelling had suggested the chances of Everton’s breach resulting in their relegation — they finished four points behind the Merseyside club that season — to be slightly better than 50 per cent.In the Sheffield Wednesday v the English Football League case in 2020, Lord Dyson was successfully able to argue that the “sporting benefit of a breach is impossible to quantify”. As precedents go, it is a compelling one.The committee found that Everton had inferred a sporting advantage throughout the season as a result of their breach. It was argued by Everton that clubs are not technically in breach until the end of the financial year (June 30, for most), months after Burnley’s relegation, but this fell on deaf ears.Recent seasons have seen clubs, including Everton, sell players and intra-group assets to resolve their regulatory position after the season’s end. This has played a key strategic role in ensuring clubs avoid breaches. In 2022, Everton did sell Richarlison to Tottenham Hotspur before the PSR deadline for a fee of up to £60m, but it was still not enough to avoid falling foul of the regulations.The league also has not had any mechanism for punishing breaches in the same season, which could work to Everton’s advantage in the appeal.There is also frustration at Everton at the near 12 per cent interest they will have to pay, totalling around £9million up to June 2025 and potentially rising as high as £14m depending on when the sum is paid, on top of the £26m in compensation. That was calculated by assessing Burnley’s own interest rates, which sit on the higher end of the spectrum, and is also likely to be challenged.Everton also suggested they were so concerned over the Lancashire club’s ability to repay the money in the event of an overturn on appeal that they wanted to delay payment, or at least place the sum in escrow.It remains to be seen what all of this means for Moshiri and TFG. This is ultimately a charge against the club, but it is normal for takeover deals to have protections and indemnities, particularly when proceedings are ongoing. The Athletic has contacted Everton and representatives of Moshiri for comment.Everton are in the fortunate position where TFG will be able to weather the consequences of this outcome, but would have struggled during more difficult financial times. Not every club would be able to withstand such a financial hit, with the monies to be paid within 28 days of the ruling.For now, Everton’s focus will be on an appeal, which is usually limited in scope, and there are some obvious areas where they can look to gain ground. A new verdict is not expected to come until the new year.The fallout from the decision is not going away any time soon.