The Merseysiders have been accused of illegally approaching Silva last November as they sought a replacement for Ronald Koeman, where the Hornets subsequently parted ways with the Portuguese boss after claiming their season had become destabilised due to the Toffees' involvement.
The saga is yet to come to an end as Everton are refusing to pay compensation to their Premier League counterparts, and have hit back with a claim of their own after accusing Watford of making an illegal approach to Silva when he was the manager of Hull last season - per the Times.
The Toffees claim to have evidence that the Hornets sent Silva a draft contract whilst he was still working with the Tigers, which if proven, could be a breach of Premier League rules.
However, the Hornets rebut such claims as they insist that a release clause was present in Silva's contract at Hull which enabled him to speak to other clubs following their relegation to the Championship.
After Watford made a formal complaint to the Premier League last month over Everton's approach to Silva, the two clubs met for mediation last month, where a £1m compensation fee was swiftly rejected.
The Toffees have since withdrawn their offer and have accused their league rivals of attempting to take away from another dispute which has seen the club yet to pay Silva a compensation fee after he was sacked with 18-months remaining on his contract - to which Watford believe Silva's negotiations constituted as a breach of contract.
If matters were not confusing enough, Everton are in the process of attempting to appoint Silva again following the departure of Sam Allardyce, which will be a long drawn out process due to the ongoing legal disputes.
Should the two clubs continue in a stand off and refuse to reach a settlement, Watford would be required to approach the Premier League to facilitate a formal arbitration process.
Each club would then be required to nominate an independent legal expert who will sit alongside a QC appointed by the Premier League to oversee the three-person panel.