Liverpool's first League Cup final ended in defeat at Old Trafford on 22 March 1978. Four days after the goalless draw at Wembley, John Robertson's penalty gave Nottingham Forest the trophy. The award of that penalty, followed by the disallowing of a Terry McDermott equaliser, left two refereeing decisions at the centre of the replay.
Bob Paisley's side again faced Chris Woods, Forest's 18-year-old goalkeeper. Peter Shilton was cup-tied through an earlier appearance for Stoke City. Liverpool started Kenny Dalglish and Steve Heighway, with David Fairclough available from the bench; Forest's attack included John O'Hare, Peter Withe and Tony Woodcock.
The first half produced no goal. Eight minutes after the interval, Phil Thompson fouled O'Hare and referee Pat Partridge awarded a penalty. The point of contact was outside the area, as both Liverpool's later account and the Association of Football Statisticians' match record describe. Robertson converted the spot-kick.
McDermott put the ball past Woods four minutes later, but Partridge ruled that he had handled while bringing it under control. McDermott maintained that he had used his chest. Partridge defended both decisions after the match, saying that he and his linesman had seen the midfielder use his arm.
Liverpool brought Fairclough on for Jimmy Case in the 64th minute. They could not find an equaliser that stood, and Forest held their lead before a crowd of 54,375.
The penalty was the only goal across the two matches. Liverpool had reached the competition's final for the first time, but their wait to win it continued.