Bernard (right) played for Newcastle between 2000-05 and 2006-07

Clubs can seek compensation for young players they have trained if they go on to sign their first contract with a team in another EU country.

The European Court of Justice ruled on the case of French defender Olivier Bernard's move from Lyon to Newcastle in 2000 - he now trains with Toronto.

Lyon sued Newcastle and Bernard, now 29, but both appealed, which led to the French Court seeking the judgement.

In future, clubs can seek compensation from other clubs, but not from players.

Premier League spokesman Dan Johnson said: "The Premier League has always supported the principle of proportionate compensation for young players and is pleased to see the judge has recognised that a regulated environment for the transfer of young players is desirable."

In the last few months, Chelsea and Manchester United have both found themselves in dispute with French clubs over young players that moved to the Premier League clubs.

Chelsea were found guilty of inducing Gael Kakuta to break his contract with Lens in 2007 and were hit with a transfer ban covering two windows which was subsequently lifted on appeal to the Court of Arbitration for Sport.

But after it was accepted Kakuta, now 18, did not have a valid contract with Lens, Chelsea paid £113,000 in compensation towards the costs of developing the French winger.

Fifa cleared United to sign 16-year-old Paul Pogba after French club Le Havre had claimed that they had agreed a contract with the midfielder for the current season before he went to Old Trafford.

It was ruled that because of Pogba's age, Le Havre could not have got an agreement for the teenager to sign a professional contract.

At the time of Bernard's move, the French Professional Football Charter required promising players aged 16-22 to sign with the professional club that trained them if offered a contract at the end of their development.

If they chose not to, they were barred for three years from signing with another French club.

But Bernard signed with an English club - and challenged a subsequent French court ruling that he and Newcastle were equally liable to pay more than £48,000 in compensation to Lyon.

The sum was equivalent to Bernard's first-year salary if he had taken up the Lyon contract.

The player and Newcastle appealed, and the French appeal court asked the European Court of Justice to rule on youth compensation.

This ruling will encourage football clubs to continue investing in young talent without the fear of their cash being used for another club's gain Member of the European Parliament Emma McClarkin

The European Court of Justice in Luxembourg has acknowledged that the French rule on trainees was a restriction on the freedom of movement for workers, including footballers.

But the court came down on the side of clubs receiving compensation for training young players.

The European Court of Justice's judgement read: "The objective of encouraging the recruitment and training of young players must be accepted as legitimate.

"In the court's view, the prospect of receiving training fees is likely to encourage football clubs to seek new talent and train young players.

"A scheme providing for the payment of compensation for training where a young player, at the end of his training, signs a professional contract with a club other than the one which trained him can, in principle, be justified by the objective of encouraging the recruitment and training of young players."

The judgement continued: "The amount of that compensation is to be determined by taking account of the costs borne by the clubs in training both future professional players and those who will never play professionally."

Member of the European Parliament Emma McClarkin said: "Had the Court ruled the other way, we could have seen a root-and-branch shake-up of the entire player transfer system.

"This ruling will encourage football clubs to continue investing in young talent without the fear of their cash being used for another club's gain."

As a result of the case, Fifa, football's international governing body, has adopted rules under which the club, and not the player, pays compensation.

The amount is calculated on the cost of training a player, adjusted by the ratio of trainees needed to produce one professional player.

Various conditions ensure that compensation is "proportionate", and distributed equally when several clubs have contributed to training a player.

Bernard stayed with Newcastle until 2005, when he left after a dispute over contract negotiations.

He rejoined a year later, from Rangers, but left struggled with injuries and left again in May 2007.

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