Berg, a key member of Blackburn's championship-winning side of 1995, was made boss at Ewood Park last October despite having publicly stated that "no real managers with credibility" would accept the post.
He was fired two days after Christmas after a dismal 10 games in charge, and ever since has been locked in a dispute with the club over non-payment of his wages and compensation.
Rovers refused to pay and took the dispute to the High Court, but have now lost the case.
Delivering a lengthy judgment, the High Court stated:
“(Blackburn’s) case is that Mr Shaw did not have actual authority to conclude the contract. At no stage was it suggested in the course of (pre-contract) discussions that approval would have to be sought before the contract could be signed or that if signed the contract could not take effect until such approval had been obtained”.
Blackburn’s case before the High Court was that by no later than 8 April 2013, the Club had concluded that Henning Berg’s contract had been entered into by Mr Shaw on its behalf in breach of express instructions given to him by Mrs Desai of the Club’s owners. This was despite the fact that on 9 April 2013 a news item was posted on the Club’s own website, which was in these terms:
“Following recent and misleading media speculation Blackburn Rovers FC would like to offer clarification on the situation concerning former manager Henning Berg. The owners wish to make it clear that the club’s lawyers are actively seeking agreement with Mr Berg on the settlement of his contract.
"They also wish it to be known that a £500,000 instalment has already been paid to Mr Berg. Additionally the owners would like to state that there is no investigation into this matter with regard to managing director Derek Shaw who continues to have their complete backing and support”.
The following extract of the High Court’s judgment makes staggering reading:
“It is Blackburn’s case that in effect Mr Shaw is operating the affairs of Blackburn outside the control of the owners. It is said that an aspect of this conduct was the posting of the press announcement referred to above, which it is contended was posted on the direction of Mr Shaw without the permission of the owners or any of them, and was not removed thereafter (and in the event not until the late afternoon of 24th April 2013) because Mr Shaw failed and refused to instruct Blackburn staff to do so”.
The High Court had no hesitation in dismissing Blackburn’s arguments and ordering the club to pay out under the contract in full, the judge stating:
“In my judgment it is unarguable to suggest that the Managing Director of Blackburn does not have implied or usual authority to sign employment contracts on its behalf”.
That means that Berg will have effectively earned:
- £38,596 per day for 57 days
- £183,333 for every spot he dropped them down the Championship table (12, from fifth to 17th)
- £275,000 for each goal worse he made their goal difference (eight, from +5 to -3)
- £220,000 per match (ten)
- £220,000 per goal (ten)
- £366,666 per point in the league (six)
- £2,200,000 per victory (one, a 4-1 thrashing of Peterborough in his fourth game in charge)
Despite those grim figures, it seems likely that even rip-roaring success would not have made a lot of difference: his successor Michael Appleton kicked off his reign with three straight wins, but got fired after less than three months.
Commenting after the case, Henning Berg said: “Being appointed manager of Blackburn Rovers was a great opportunity for me.
"The club has always had (and continues to have) a special place in my heart. I was very disappointed to be dismissed after only 8 weeks in charge without being able to make the changes I felt were necessary to take the club towards the Premier League.
"When the club refused to honour its obligations I had no option but to take legal action. Fortunately, with the backing of the League Managers Association and my fantastic legal team, led by Paul Gilroy QC and Martin Price of Slater & Gordon, Solicitors, the Court has upheld my claim which I always expected it would.
"I now wish to place all of these events behind me and move on in my coaching career. I wish the Club’s players and loyal and committed supporters all the best for the future."