CMA ramps up use of director disqualification powers

On 26 April 2019 the CMA announced the disqualification of two directors arising from their company's involvement in a precast concrete drainage products cartel. This was followed on 10 May 2019 by the announcement of the disqualification of a further three directors whose companies had been involved in cover pricing in relation to office fit-outs. These disqualifications mark a change in CMA policy towards greater use of disqualification as a means of enforcement and deterrence.

On 26 April 2019 the CMA announced the disqualification of two former directors of CPM Group resulting from CPM's involvement in a cartel concerning the supply of precast concrete drainage products to the construction industry. The CMA secured legally binding CDUs from the former directors, for periods of seven and a half years and six and a half years. The CMA is entitled to accept such CDUs in place of going to court to seek CDOs, with both measures having the same legal effect.

On 10 May 2019 the CMA announced the disqualification of three directors of various companies in the Jones Lang LaSalle and Fourfront groups. The breaches of competition law in this case concerned cover bidding in relation to office fit-outs. Again, the CMA accepted CDUs from the directors in place of seeking CDOs. The disqualifications covered periods of five years, two years and six months, and two years. 

The increased use of director disqualification powers comes after a long period during which such powers had been virtually unused. Only three directors had been disqualified by the CMA up to the end of 2018, despite the CMA having the ability to seek disqualification since 2003. However, the CMA has been signalling its intention to make greater use of director disqualifications for some time, and new guidance on this topic was published by the CMA in February 2019.

With thanks to Louise Duffy of Ashurst for her contribution.