Danny Ings’ move to Liverpool from Burnley has just become the latest to require a valuation by transfer tribunal. Liverpool are believed to have offered just short of £6m for the player, Burnley want something closer to £10m, so there is every chance the tribunal record of £6.5m – set when Daniel Sturridge joined Chelsea from Manchester City in 2009 – could be exceeded.

A tribunal is only needed when a player under 24 years of age moves clubs having reached the end of his contract. Whatever valuation the tribunal comes up with is non-negotiable. The player has already changed clubs and there is no right of appeal on either side once a figure has been reached. That much we know about the way the process works when two clubs cannot agree a fee for a player, but how much do we know about the tribunal committee itself?

Who sits on it, and what criteria do they use to use to put a figure on a player?

First of all, the transfer tribunal has a proper name. The Professional Football Compensation Committee (PFCC) is not a standing, permanent body, but an ad hoc group of four or five people formed as and when is necessary. There are certain organisations that have to be represented each time, but the specific identity of the individuals involved changes according to the clubs involved to prevent conflicts of interest. In the case of Ings, for example, there will be no one taking part with any connection to Burnley or Liverpool.

The PFCC is normally composed of people from within football with legal experience or backgrounds in handling contracts and transfers – club secretaries or lawyers most often. The Premier League rulebook sets out the rules for the composition of the committee, beginning with “an independent chairman of appropriate legal background”, who must have the approval of the Premier League, the Football League and the Professional Footballers Association. Under the chairman, there will normally be an appointee of each of the leagues involved in the transfer – in the case of Ings the Premier League and the Championship – although if both clubs play in the same league only one representative is necessary.

There will also be an appointee of the PFA and the League Managers’ Association. The identity of the representatives serving on each committee is not secret, though information is normally only released after a decision has been reached to minimise outside influence.

Once assembled, the PFCC has a set list of factors to consider, mostly involving costs. First of all the status of the two clubs (transferor and transferee) is taken into account, then the age of the player. The terms on which the player was engaged by the transferor are examined, as is the amount of any fee paid upon registration, and the length of time the player was at the club.

The terms of the new contracts offered to the player by each club are considered, then the player’s playing record is looked at, in terms of first-team appearances and international call-ups. Finally, interest shown by any other clubs is taken into account. This could have a bearing on the Ings case, since Tottenham are understood to have been willing to pay £12m for the player. If that interest can be substantiated (the rulebook’s word), Liverpool might have to pay a higher sum.

The PFCC would not necessarily accept Spurs’ valuation and deem Ings worth £12m, though it might take the view that an offer of £6m is a little on the low side. PFCC deliberations are not about people setting themselves up as valuation experts and plucking figures from the air; as far as possible they attempt to reach a decision by a logical and attributable process using precedents and all available information. The hearing will require each club to provide evidence to support their valuation of the player, and will endeavour to set the level of compensation according to each case’s merits.

In this the PFCC system differs slightly from the Fifa system foreign clubs tend to use, which is more of a fixed tariff so that clubs themselves can work out with a degree of accuracy what the final figure might be. In England there is slightly more uncertainty over the outcome, which is why tribunals are relatively infrequently used and smaller clubs from lower divisions often prefer not to take the risk.

Against that more flexibility can be built into the English system, and it is becoming accepted practice now to stipulate staged payments based on a player’s success at his new club, so that the risk as well and the transfer fee is shared more evenly between the two parties.

To give a fairly recent example, Luke Garbutt cost Everton £600,000 when he joined from Leeds United in 2009. That figure was set by tribunal and paid to the Yorkshire club immediately, though the tribunal also stipulated an extra payment of £750,000, paid in increments of £150,000 each time the player passed the landmarks of five, 10, 20, 30 and 40 first-team appearances.

Luke Garbutt, top, cost Everton an initial £600,000 from Leeds United, but that could rise to £1.5m depending on his career. Photograph: Alex Livesey/Getty Images

There is also a payment of £200,000 due should the left-back win a senior England cap. After spending time in Everton’s youth teams and going out to Colchester on loan, Garbutt is now finally making his mark in the first team, so Leeds are likely to be picking up money all through this season.

Garbutt has also been called up by England Under-21s, so if his first-team career continues as promisingly as it has started Leeds could end up with over £1.5m for a player who left more than five years ago as a 16-year-old. Everton would then have a decision to make between their two left-backs, both of whom appear to be international class, and would most likely end up selling one or the other. But all that is in the future, which could not be viewed with the same degree of certainty in 2009, though the tribunal at the time appeared to have most of the angles covered.