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Competition and Markets Authority Loses Criminal Cartel Case

29 June 2015

Two directors, Mr. Clive Dean (a former director of Kondea Water Supplies) and Mr. Nicholas Stringer (a former director of Galglass), were acquitted on 24 June 2015 of charges under Section 188 of the Enterprise Act 2002 following a trial at Southwark Crown Court.

Both directors were cleared of fixing the price, dividing customers and rigging bids in respect of the supply of water storage tanks over a seven year period. A third defendant, Mr. Peter Nigel Snee, an ex-managing director at Franklin Hodge had already pled guilty to the same offence before trial.

The prosecution was brought under the law as it applied before April 2014, under which the price fixing offence was only committed where the participating individuals were dishonest. In this case the Competition and Markets Authority accepted that the jury were not persuaded that Mr. Stringer and Mr. Dean acted dishonestly.

However, following a change in the law, for conduct after 1 April 2014, it is no longer necessary to prove that individuals have acted dishonestly to commit the cartel offence – and, consequently, it is likely to be easier for prosecutions to succeed. Coupled with this, the Competition and Markets Authority has affirmed its commitment to investigate and prosecute individuals involved in cartels.

The acquittal of the former directors does not directly impact the Competition and Markets Authority’s ongoing civil investigation under the Competition Act 1998 of the businesses suspected of being involved in cartel conduct in respect of the supply of the water storage tanks.

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Note: This is a general briefing and not an exhaustive treatment of the subject.