Progress in criminal cartel prosecution - more to follow?

Progress in criminal cartel prosecution - more to follow?


Author: Sarah Livestro

On 26 January 2015, two individuals entered pleas of not guilty to criminal cartel charges brought under the Enterprise Act 2002.

Although there have only been a handful of convictions to date, recent legislative changes and CMA ambitions may mean that such convictions will become more frequent.

At a hearing at Southwark Crown Court on 26 January 2015 two individuals both entered a plea of not guilty to criminal charges brought against them in relation to suspected cartel activity in the supply of galvanised steel tanks for water storage.

The charges of dishonestly agreeing with others to divide customers, fix prices and rig bids between 2004 and 2012 were made following an investigation into possible illegal agreements in the sector by the OFT (now the Competition & Markets Authority (CMA). The case has been listed for trial on 1 June 2015. The first person to be charged in this case in January 2014 has pleaded guilty.

Although the cartel offence has been on the statute books for 12 years, there have to date only been a handful of convictions. Three UK directors involved in the marine hoses criminal cartel were sentenced to custodial terms of between 20 and 30 months along with confiscation and director disqualification orders.

This poor record may be down - at least partly - to the fact that the criminal cartel offence required prosecutors to demonstrate that the accused had acted 'dishonestly'. However in April 2014, new legislation came into force which abolished the dishonesty requirement.

In September 2014 Sonya Branch (CMA Executive Director, Enforcement) concluded her speech at the Business Crime - 2014 Conference by saying: 'The CMA is vigorously pursuing its ambition to evolve fully into a mainstream criminal enforcement agency. Enhanced capabilities and changes in the legislative framework mean that the risk of detection and successful prosecution are increasing for those involved in cartel activity.'

The less onerous legislation and the CMA's ambitions mean that it is very important for businesses to review their procedures to ensure full and effective compliance with competition law and where a business considers that it may be involved in cartel activity to consider reporting the conduct quickly to gain leniency.


This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.