Ex-Sheffield United owner Kevin McCabe labels UK litigation system 'a joke' after bruising court defeats

The Scarborough Group International founder said his recent experiences of the system had been “dreadful”.

In 2019, after a fallout between Mr McCabe and his then-Sheffield United co-owner Prince Abdullah bin Mosaad bin Abdulaziz al Saud in conjunction with the club unexpectedly making it to the Premier League, a court ultimately decided that McCabe would have to sell his 50 per cent stake in the club to the Prince for £5m at a point when the shareholding was worth £52m.

Last year, a subsequent claim by Mr McCabe’s companies that his legal firm Shepherd and Wedderburn had acted negligently in regard to the contract with the Prince also failed. Despite the judge finding Shepherd and Wedderburn had been negligent in four separate areas, she rejected the claim against the firm on the grounds there had been a failure to prove any loss was caused because of it.

Mr McCabe said: “I have been around a long time. Litigation is a joke and it is unjust. I can say that very clearly.”

Having previously invested around £100m in his boyhood club since the 1990s, Mr McCabe had sold Prince Abdullah a 50 per cent stake in 2013 for £1 on the basis that £10m would be invested by the latter man in the then-struggling League One side over three years.

The Prince created a new company called UTB (standing for Up The Blades) as part of his involvement.

The agreement also included a ‘Russian roulette’ clause, in which either party could nominate a price at which they were willing to buy the other’s shares. The other party could either then accept the offer or buy the offering party’s shares at the same price.

That happened in 2017 when the club were in the Championship and Mr McCabe offered £5m for the Prince’s 50 per cent. But his offer was matched - leaving him contractually obliged to sell up.

The deal also included a clause which meant that if Prince Abdullah owned more than 75 per cent of the club he would also be required to buy the club’s separate property assets, which were valued at around £40m.

Two days before the sale, the majority of the original shareholding that had been in UTB was transferred into a newly-created company called UTB 2018. It meant that even with the purchase, neither vehicle would have 75 per cent control of the club in an attempt to avoid purchasing the property assets.

A judge ruled in 2019 that the share sale should be completed for £5m but the property asset purchase should also occur.

Mr McCabe said: “I’m quite prepared to accept doing the Russian roulette had the chance of me losing. We had a contract, I understood it and it was black and white. The flaw was moving shares and I didn’t realise you could get away with it. But it wasn’t seen to be that way in court.

“Even now, I can’t believe the law does not protect the innocent.”

Mr McCabe then took his own lawyers Shepherd and Wedderburn to court over the situation. A judge ruled the firm had been “negligent” in regard to the drafting of the agreement and a failure to consider the possibility a new vehicle may be set up which shares could be moved into.

Negligence was also found in three other areas but the judge ruled that Mr McCabe’s companies had failed to establish that any loss was caused by it.

Mr McCabe said of the ruling: “I find it absolutely staggering. She slates them but then walks out not having compensated in any shape or form.”

Sheffield United and Shepherd and Wedderburn were contacted for comment.