Following report was first published on the WRU web-site
The Welsh Rugby Union is today providing all member clubs with the details of how and why the governing body vigorously defended the legal challenge by Pontypool RFC against the WRU's decisions regarding the reform of the Principality Premiership Division.
The WRU is now issuing this statement detailing the particulars of the case history, following the completion of legal proceedings, as the deadline for any appeal by Pontypool to the Court of Appeal has passed..
The High Court ruled that Pontypool failed to establish that the WRU had acted in breach of duty or contract and the club's case was therefore dismissed.
The Court also ruled that it was appropriate for the governing body to protect itself against the implications of bearing its legal costs, as no organisation or individual could establish the principle of "risk free" litigation.
The WRU wants to remind all member clubs that the monies it generates are all distributed into elite rugby, the community game and the maintenance and development of the Millennium Stadium.
Following the High Court decision, the Principality Premiership Division reforms and the establishment of a new National Championship division will go ahead from the start of the forthcoming 2012/13 season as planned.
The WRU is issuing this statement to clarify matters after previously deciding not to issue public statements or responses to counter debate and speculation during the legal proceedings.
The WRU further reminds all member clubs of the constitutional methods that exist to resolve any disputes, which aim to avoid unnecessary and costly legal proceedings.
The WRU Board approved proposals for the reform of the Principality Premiership Division, which would reduce the number of participating clubs from fourteen to ten.
The decision was made following an extensive review involving all stakeholders with the declared aim of improving playing standards, squad strengths and the financial stability of the clubs.
The existing Principality Premiership Division clubs, including Pontypool RFC, voted unanimously in favour of the changes and accepted the selection process.
The WRU decided that any club relegated from the Principality Premiership Division to the new National Championship would have their place in that division ring fenced for the following two seasons. The relegated clubs will receive parachute payments from the WRU which means their funding is increased for two seasons.
The then Pontypool RFC director and shareholder Mr Frank Stanton wrote to the WRU regarding a variety of issues, including his concerns about compliance with health and safety at other clubs, to which the WRU responded.
The WRU informed all clubs individually and announced publically the composition of the reformed Principality Premiership Division and the new National Championship.
The WRU Board accepted a proposal made on behalf of the four Welsh Regions, through RRW, for Carmarthen Quins RFC and Bridgend RFC to be added to the ten named clubs so that The Ospreys and The Scarlets could achieve their elite player pathway standards by recruiting from within their geographical regions, creating a 12 team Premiership.
A number of conditions were set by the WRU Board in relation to the qualification of these two clubs including that the relevant Region committed to funding and would ensure the quality of players permitted from the Region.
WRU executives met with the Torfaen AM Lynne Neagle and Mr Stanton at The Senedd, in Cardiff Bay, to discuss the various issues raised by Pontypool RFC and its various claims of unfair treatment.
Later the same month the WRU Group Chief Executive, Roger Lewis, informed all parties who had attended the meeting that an independent review into the issue would be commissioned by the WRU.
The independent review concluded that Pontypool had been treated in a fair and impartial way by the WRU.
An appeal brought by Pontypool RFC pursuant to the WRU's league rules was heard by the WRU Regulatory Committee and was later dismissed.
On April 30 lawyers acting for Pontypool RFC served court papers on the WRU which commenced legal action against the governing body. A fundamental element of the claim brought by Pontypool RFC was that Bedwas RFC, Cross Keys RFC and Swansea RFC had failed to meet the required A licence criteria for inclusion in the reformed Premiership and that Pontypool should be awarded a place in the reformed division.
On May 28 the WRU offered Pontypool RFC an opportunity to settle the legal proceedings by offering to "drop hands" which meant that the WRU would have borne its significant legal costs up to that date if the action was ended. No response was received from Pontypool RFC to this offer.
At a hearing to determine security for costs the Judge, Mr Justice Eady, held that it was "entirely reasonable" for the WRU to take protective steps. He further held that:"It is right to uphold the principle that people should not be allowed to bring proceedings against others on a risk free basis."
Following the court's decision a number of individuals involved with the club gave a personal undertaking in respect of costs if the WRU were to successfully defend the case.
A full hearing took place at the High Court on June 25, 26 and 27 and the Judge, the Hon Sir Raymond Jack, reserved his decision.
The High Court judgement declared that Pontypool RFC had failed to establish any breach of contract or duty on the part of the WRU and the club would therefore start season 2012/13 in the new National Championship, and not in the Premiership.
In his judgement, the Hon Sir Raymond Jack, stated: "I conclude that Pontypool has failed to establish any breach of contract or breach of duty on the part of the WRU and that there are no grounds for the intervention of the court."
The Judge held that the crucial point for the purposes of Pontypool's claim was that Swansea, Cross Keys and Bedwas held A Licences which had been granted in accordance with procedures which were well known to the clubs and which were fairly applied between them.
The judge dismissed Pontypool's claim that the change to include Carmarthen Quins RFC and Bridgend RFC in a twelve team Premiership had been unfair. The judge said that Pontypool's position was unaffected because the club was below the two on the required meritocracy criteria and that the decision to include the two clubs was subject to other criteria. The Judge also held that the WRU has the power to change its league rules.
The WRU Group Chief Executive, Roger Lewis, said: "The WRU is pleased and relieved for the sake of Welsh rugby that this matter has now been concluded and the reforms of the Principality Premiership Division and the creation of a new National Championship Division will go ahead as planned.
"Pontypool RFC is an important club which boasts a proud history and I am confident that the players, coaches and supporters associated with the team will ensure the club strives for a bright and successful future.
"The WRU also has a proud history of achieving success and facing up to the challenges of change which are inevitable in developing and enhancing rugby union as the national sport of Wales.
"We can now move on together as one Union having put this matter firmly behind us."