Criminal Cartels and Liability of Corporate Managers

Beatrice Roxburgh, In-house Counsel, BT Group plc, United Kingdom

Recent cases in the UK and the US have highlighted the risks for company directors and managers taking part in cartels which are subject to criminal penalties under UK and US anti-trust law (“a criminal cartel”). In June 2008 and for the first time in the UK, executives were jailed for up to three years for their part in a criminal cartel. More cases are in the pipeline. Close co-operation by the UK and US anti-trust authorities in recent extradition cases has internationalised the risk. Paradoxically, enforcement action in the UK may reduce the risk of jail terms in the US. In-house counsel will seek to ensure that their company’s compliance procedure enables corporate managers to avoid the pitfalls. Taking part in a criminal cartel can have severe consequences for managers as well as for the company. Putting the focus on the risks to individual managers helps with corporate compliance as well. Executives who avoid personal criminal liability thereby tend to reduce corporate risks at the same time. This article covers: • Case studies: the UK’s first criminal cartel convictions and cartel offences charges • When is a cartel criminal? • What are the risks for individuals? • What should a manager do if a cartel is suspected? • What compliance procedures should there be?

Beatrice Roxburgh joined BT Group plc's in-house legal department from the competition enforcement division at the Office of Fair Trading, where she oversaw dawn raids and investigations in a number of anti-trust cases including cartels. Before that she practiced competition law with two pre-eminent law firms in the City of London, advising major corporates, government and public bodies on all aspects of EC and UK anti-trust law including its application to international mergers, joint ventures and other transactions.

BT Group plc is the listed holding company for an integrated group of businesses that provide communications voice and data services in the UK, elsewhere in Europe and around the world.