Interface between Leniency, Direct Settlement and Criminal Sanctions – A UK perspective European...
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Transcript of Interface between Leniency, Direct Settlement and Criminal Sanctions – A UK perspective European...
Interface between Leniency, Direct Settlement and Criminal Sanctions –A UK perspectiveEuropean Competition Day, Brno
Philip CollinsChairman
Office of Fair Trading, London
Outline
● The UK cartel regime
● Cartel penalties
● Recent highlights
● Leniency and immunity from criminal prosecution
● Revised OFT leniency and no-action guidelines
● Plea agreements?
● Conclusions
The UK cartel regime●Two separate regimes
civil - directed mainly at undertakings (public/private enforcement)
criminal - directed at individuals
●Regimes are complementary
proceedings under both regimes or one only (most likely civil)
parallel or sequential proceedings criminal regime alongside Art 81 cases
●Equip for possibility of criminal enforcement
criminal standard for evidence gathering separate teams
Cartel penaltiesCivil
● Undertakings fined up to 10 per cent global turnover
● Director Disqualification Orders
up to fifteen years disqualification from directorship
Criminal
● Imprisonment of up to five years and/or unlimited fines
• Director Disqualification Orders
• Confiscation of assets
personal benefits confiscated under Proceeds of Crime Act 2002
Recent highlights: leniency and informants reward scheme
● All pursued cartel cases involved leniency
● 14 civil cartel infringement decisions
● Focus on higher impact cases, with more decisions in the pipeline
● Informant rewards scheme
up to £100,000
opens up important new source of leads
Recent highlights: criminal regime• Marine hose
Significant prison sentences: 3 and 2.5 years (reduced to 30 and 20 months)
Director Disqualification Orders: 7 and 5 years
Proceeds of crime: over £1m confiscated
• Charges brought in Passenger fuel surcharges• Use of criminal investigation powers
First search of domestic premises in Marine hose
• Separate parallel EU Commission Art 81 EC case in Marine hose
• Strong deterrence message
Deloitte report
• Why not more cases?
Recent highlights: early resolution● Early resolution (“direct settlement”), most recently:
BA/Virgin (£121.5m) Dairy RPI case (combined maximum over £120m) Tobacco (combined maximum £132.2m)
● Key elements
Admission of liability Procedural cooperation Reduced penalty OFT still issues infringement decision
● Complementary to leniency
● Discretionary
• Significant resource savings to OFT and parties
● Relevant only to civil cases
Leniency and immunity from criminal prosecutionLeniency must include process for criminal immunity
● Automatic guarantee of criminal immunity for Type A immunity applicants
● No automatic guarantees for Type B and C leniency applicants
● OFT can grant immunity from prosecution in England and Wales only
● Sufficient assurance?
International cartels?
Separate prosecutors?
Revised OFT guidelines on leniency and no-action● Importance of practical guidance: revised OFT
guidelines (December 2008) reflect OFT’s growing experience
Complement formal policy Provide practical guidance Give predictability and transparency
• Additional explanations and guidance on:
Key requirements: ‘genuine intention to confess' and 'continuous and complete cooperation‘
Criteria for discounts Requirements for criminal immunity How leniency information will be used Carrying out of internal investigation
Plea agreements?
● Marine hose- US plea agreements only
US plea agreements were not binding on UK courts
No UK sentencing guidelines: little certainty
US plea agreement prevented seeking lower sentences in UK
● Need to better align criminal and civil regime?
Early resolution relevant only to civil cases
Key incentive: certainty and reduction of penalty
If similar incentives for criminal cases: enforcement strengthened?
Conclusions● Criminal regime a valuable addition to civil regime –
but must focus on appropriate cases
● Leniency and early resolution (“direct settlement”) are complementary but work differently – early resolution needs to be discretionary
● Criminal immunity an essential feature of leniency policy
● Practical guidance for advisers and companies is vital
● Need to explore full range of corporate and individual sanctions within regimes to maximise deterrence
Interface between Leniency, Direct Settlements and Criminal Sanctions – a UK perspectiveEuropean Competition Day, Brno
Philip CollinsChairman
Office of Fair Trading, London