The Office of Fair Trading (OFT) has published revised guidance on Competition Disqualification Orders (CDOs), which are orders under which company directors are disqualified from acting as directors where the company of which they are a director is in breach of UK or European competition law.
A CDO can disqualify a director for up to 15 years if the court deems them to be unfit to act as a director. CDOs can be applied to anyone acting in a directorial capacity, no matter what their notional status in the company.
The major changes in the new guidance are:
- Directors who should have known of competition law breaches, as well as those directly involved with breaches, will be potentially liable to receive a CDO;
- Directors who fail to cooperate with an OFT investigation will not be offered immunity from a CDO. Those who do cooperate will be offered immunity where the company qualifies to be treated leniently; and
- The OFT will be able, in exceptional cases, to apply for a CDO before judgment has been made with regard to a breach of competition law by the company, if it can satisfy the court that an offence has been committed.
The changes in procedure should ring warning bells for company directors who are aware of breaches of competition law, or suspect breaches may be being committed by their company.
