Negotiating The Minefield
In June 2003, something never previously seen in UK civil or criminal law made its first appearance. Based on the highly successful US model of rewarding confessions of wrongdoing, the Enterprise Act 2002 gave power to the Office of Fair Trading (OFT) to grant, in relation to confessed breaches of Competition Law: 

  • civil immunity to businesses (“undertakings”, in the language of Competition Law);
  • criminal immunity to individuals; and 
  • leniency, by way of reduced penalty for businesses.

What is forbidden by both UK and EU law is an agreement by an undertaking to fix prices or rig bids or the market, or act in league with another undertaking to do any of those things. An individual commits a criminal offence if he or she dishonestly agrees with another to do any of those things.

The immunity or leniency, which is available through confession of wrongdoing falls into three types, called, imaginatively, A, B and C.

In order to get type A, which is automatic absolute immunity from penalty for the undertaking and from prosecution of any individual who has acted on behalf of the undertaking, a number of criteria must exist.

  1. Most importantly, the applicant has to be the first undertaking to tell the OFT what has happened;
  2. There must be no pre-existing OFT investigation into the anti-competitive behaviour which the undertaking has confessed to; and 
  3. There needs to be continuing and full co-operation with the investigation launched by the applicant’s disclosure.

The application can be made on an anonymous “hypothetical” basis, but as soon as the OFT says that type A immunity is available, then the full identity of the undertaking involved has to be disclosed. This process is called applying for a “marker”. Providing the detailed information required thereafter is referred to as “perfecting the marker”.

If type A is not available, the undertaking can simply walk away, though it would be unwise to do so because if a type A marker is unavailable it generally signals that the OFT is already aware of the anti-competitive behaviour. In that case an undertaking can apply for type B leniency. This, unlike type A which is automatic, is discretionary. Type B immunity may, or may not as the OFT chooses, be given to the first applicant for such immunity where there is a pre-existing investigation into the anti-competitive behaviour. This immunity applies to both civil process against undertakings and criminal process against individuals. Like type A, if granted, this immunity is absolute and, like Type A, depends upon continuing co-operation with the OFT as its investigation goes forward.

Last of all, type C is not immunity at all but leniency in the form of reduced penalty. This reduction can be up to 50% of the penalty imposed on the undertaking. It has no relevance to individuals at risk of criminal prosecution for dishonest agreements to fix price or rig markets.

The decisions to be made before any approach to the OFT are difficult and far reaching. Once a confession is made there is no going back. Also these decisions often have to be made in a hurry. Because the potential benefits are so great there is often a race to be the first to get to the OFT. So if in doubt ask for advice, but do it quickly 

Kevin Robinson

Yorkshire & North East: Paul Haycock
London & South England: Sarah Wallace