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Company director sentenced for precast concrete drainage products cartel

Stack of Industrial Pipes Print publication

19/10/2017

The Competition and Markets Authority (CMA) recently announced that an individual and company director, Barry Kenneth Cooper, was given a two-year suspended prison sentence and made the subject of a six-month curfew order from 6 pm to 6 am for his role in price-fixing and market sharing arrangements with competitors in the supply of pre-cast drainage products. Mr Cooper was also disqualified from acting as a company director for seven years.

Mr Cooper was arrested in 2013 at the start of an investigation by the Office of Fair Trading, the CMA’s predecessor. In March 2016, Mr Cooper pleaded guilty to one count under section 188 of the Enterprise Act 2002, the criminal cartel offence. The CMA continued the criminal investigation but decided, in June 2017, that there was insufficient evidence to charge any other individuals with the cartel offence. The CMA’s civil investigation into whether construction businesses have infringed the Competition Act 1998 remains ongoing.

Comment

This case is one of two recent cases concerning anti-competitive activity in connection with supplies to the construction sector; the other case concerned a price-fixing, bidding rigging and market sharing (by way of customer allocation) cartel for galvanised steel tanks for water storage in which the companies involved were fined over £2.7 million and another director received a suspended prison sentence after pleading guilty to criminal cartel conduct. These cases underline the risks associated with anti-competitive conduct both for individual as well as for companies involved.

Now and post-Brexit, competition law will continue to be an important issue for those operating in the construction sector in the UK. Companies should ensure they have effective compliance policies in place to reduce the risks of breach and enforcement action and ensuring that employees are aware of the risks of individual sanctions (including potential prison sentences of up to five years, unlimited fines and director disqualification orders). This is in addition to potential fines on the company of up to 10% of worldwide turnover, damages actions and consequential damage to reputation.

How Walker Morris can help

 The Competition Team at Walker Morris has extensive experience in assisting companies in developing compliance policies and offering training. This may include:

  • Ensuring your company has an effective competition law compliance policy in place. Policies should be checked and refreshed to ensure they are up-to-date and appropriately tailored for the business.
  •  Arranging face-to-face training for key personnel within the business, such as directors and sales teams, to ensure a basic understanding of competition law and what they can and cannot do. Other staff may benefit from basic online training.
  •  Running periodic audits to check that supplier and customer relationships comply with competition law (to help ensure their validity and enforceability) and to understand what contact your business may have with competitors (a key risk area).
  •  Conducting audits of email correspondence generated by “higher risk” individuals (such as senior sales personnel), together with face-to-face training to address best practice points that might arise.

If you would like further information on how Walker Morris may be able to assist you, please contact any member of the Competition Team listed below.

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