Two acquitted in cartel offence prosecution

The Competition and Markets Authority has failed to prove that two individuals acted dishonestly in agreeing to rig bids to supply steel water tanks contrary to the cartel offence in section 188 Enterprise Act 2002.  The jury acquitted the two accused three weeks into a trial that was set down to last for eight weeks.  The CMA announced the charges in July 2014 in a case where another individual had already pleaded guilty to the cartel offence.  The failure to secure the further convictions again puts into the spotlight the challenges for the CMA and before it the OFT in bringing successful criminal cartel prosecutions under section 188.

It appears that the jury was unconvinced that the defendants had pursued excessive profits as opposed to a strategy of seeking to maintain a modest profit to fend off redundancies and bankruptcy at the competing companies.  They were not satisfied that the individuals acted dishonestly under the applicable test.  This was a case predating the changes to the law from 1 April 2014 which mean that there is no longer any requirement to prove dishonesty.  It seems that the case fell apart due to the jury’s reluctance to find that the conduct of two men trying to save jobs in challenging economic times was to be stigmatised as dishonest. 

The acquittal comes as a blow to the CMA at a time when it is seeking to establish a break from the past as a newly constituted authority and where the OFT’s track record - and notably the collapse of the case against four British Airways executives in 2010 – has been criticised.  The verdict reveals that however strong the case may be on paper the jury will be sensitive to the human dimension and the standards of ordinary people in judging what is dishonest. 

It should not go unnoticed that the CMA was able to secure an admission from one defendant in the related case and under the old law where the dishonesty test applied.  With the  burden on the prosecution now reduced, it should in principle be much easier for the CMA to bring a solid conviction in the future.  However, there are a number of cases in the pipeline that appear to relate to the old law.  It remains to be seen whether the CMA will drop those cases and move on with cases where the prosecution is relieved of the burden to prove dishonesty.

Source: CMA News release 24 June 2015