23 Apr 2012

(by , Lancaster University) The future of the UK’s cartel offence has been the subject of much debate, including excellent contributions via the CCP blog by and , since the publication of the to their consultation on competition reform. One of the main features of that debate has surrounded the position of the dishonesty element within the offence. Many responses to the consultation, particularly those involved with the defence bar, supported the continuing usefulness of dishonesty. The majority of academic opinion appears to be in favour of its removal from the offence; however, there is less consensus how the offence should be changed in light of its removal. This lack of consistency indicates to me that fundamental questions may still need to be addressed.

I have previously argued that the dishonesty element plays an important role in the cartel offence, and I still hold that view today. That does not mean that I argue for its retention; however, I do argue that problems arise if we do no more than take a blue pencil to s188 of the Enterprise Act. has persuasively argued that the cartel offence, without reliance on dishonesty, would sit well in the pantheon of other regulatory offences in English criminal law which result in significant terms of imprisonment being imposed. I do not doubt that to be the case. While such an approach is entirely consistent with the contemporary trend toward ‘punitive’ regulation in the UK, it would not be the approach that I would advocate for the cartel offence. There are two main reasons that I encourage a different approach. First, if we draft a wide regulatory offence that catches all cartel behaviour we need to rely on prosecutorial discretion to separate delinquent cartel behaviour, which is deserving of prosecution, and that which is not (and may not even fall within the administrative regime). Such an offence may be easy to prosecute, in terms of proof, but it gives too much discretion to the prosecutor. I would much rather have the offence itself spell out, on its face, the behaviour which is deemed to be outside the expected norms of society and deserves the criminal law’s most serious punishment. Second, a wide regulatory offence and discretionary prosecution does nothing to help legitimate the offence or assist in competition advocacy. If the offence clearly sets out the wrongdoing in cartel behaviour it will play an important part in explaining the necessity of strong sanctions and legitimate the use of the criminal law against it. It is for similar reasons that I do not advocate the adoption of the ‘publication’ defence as preferred by BIS. That defence may be a practicable way of delineating between lawful and unlawful behaviour in many circumstances, but to my mind I would much rather the offence attempted to address the question of lawfulness head-on rather than rely on such a proxy.

The suggestion I made to BIS, and which will appear in a forthcoming article, is that if dishonesty is to be removed the offence needs further limitation in both its physical and mental elements. It is important to limit the physical scope of the offence to only that cartel behaviour which is truly delinquent and that it there should be a much clearer mental element requiring that the individual have intended the commission of the physical element. The key question then is what is the best way to define the scope of delinquency in cartel behaviour? I advocate the limitation of the cartel offence to horizontal cartel agreements where there is clear evidence that the individual making or implementing that agreement intended to ‘subvert the competitive process’. That formulation, to my mind, best sets out the wrongdoing of an individual cartelist. Those concerned took the decision to deviate from the competitive norm that we, as a society, insist upon in the marketplace – the active disregard of that norm is worthy of censure and punishment.

It is becoming clear that the current Government has not been convinced by my argument, but I hope that it will stimulate others to think more about what it is about cartel behaviour that deserves society’s condemnation.