Just before Christmas, Ali Nikpay, the OFT's senior director of the Cartels and Criminal Enforcement Group gave a very interesting talk to the Law Society Anti-trust section which can be found here: http://www.oft.gov.uk/shared_oft/speeches/2012/1112.pdf Although this is somewhat belated, I thought I would mention it because it is an excellent overview of the work of the OFT in relation to criminal enforcement, along with some thoughts about what the future might bring. The focus of this group is on criminal cartels, narrowly defined and criminal consumer law enforcement (a function which will presumably disappear following the creation of a Competition and Markets Authority). The whole speech is worth a read, particularly if you are interested in the OFT's current consultations on leniency and recently announced fining guidance.
The aim of the OFT is to develop a more proactive approach in this field, using the investigative powers that it has, including covert surveillance powers. There is also a warning that more director disqualification cases will be pursued.
As regards the criminal cartel offence, Ali Nikpay takes the view that the well-known enforcement problems are because of the requirement of dishonesty. He puts forward a strong case that reform was necessary and that the changes will not widen the offence unduly. On the former point, he argues that the requirement of dishonesty causes problems because "white-collar" crimes lack obvious indicators of dishonesty which means that likelihood of persuading a jury of the dishonesty of the conduct in a cartel case is far lower than many commentators assume and has been a major factor in the OFT's decision, in consultation with leading counsel, to close most of the criminal cartel cases they have launched so far. In addition, this has allowed defendants to create "dishonesty based defences", such as, "I was trying to protect jobs", "I was only following orders" etc. Despite these obstacles, he predicts one cartel case in the next year and another one to two in the next two to four years.
He makes the very god point that the criminal cartel offence is defined narrowly and does not catch, for example, vertical agreements and concerted practices. It is aimed at a small set of activities. He has confidence in the proposed publication exclusion because of its limited scope: only those customers directly affected by the offence need to be notified, only detail necessary to identify the existence of the conduct need be published and it only has to be published when the agreement is implemented. The example he gives is of a research and development joint venture and he emphasises that there would be no need to publish confidential information.
He is also confident that the new defences introduced into the offence will be effective. These are:
- the individual did not intend to conceal the arrangements from customers
- the individual did not intend that the arrangements would be concealed from the CMA
- before entering into the agreement, the individual took reasonable steps to ensure that the arrangements would be disclosed to a professional legal adviser for the purpose of obtaining advice about them before they were made or implemented (the 'professional advice defence').
Although the boat has sailed on this, I am still uncomfortable at the thought of sending people to prison, even if they have not acted dishonestly. I also think that the argument that dishonesty makes the offence very difficult to prove would be stronger if there were some actual examples of failing to prove this, although it's easier to write this than be responsible for a policy which would involve going against counsel's advice and bringing failed prosecutions (not a recipe for a successful career).