0370 270 6000

Breached competition law? sue your employees!

19 January 2010

The High Court has cleared the way for companies in the Safeway Group to seek damages from eleven ex-employees and directors in relation to an OFT penalty (yet to be imposed) for competition law breaches.  The penalty could be as high as £16.4 million. 

Safeway is alleging that the ex-employees were in breach of their employment contracts and fiduciary duties, that they were negligent and that they conspired to procure the companies’ participation in anti-competitive practices. 

The ex-employees argued that the claim should be struck out on public policy grounds and, in particular, the rule that a person who commits an illegal act or unlawful act cannot seek an indemnity for any consequent liability (ex turpi causa non oritur action).  They argued also that the claim is fundamentally inconsistent with the UK competition law regime. 

The High Court rejected the application to strike out the claim on the basis that Safeway has a “real prospect” of defeating the defences at trial. 

The concept of companies suing employees is not new but it is new in the field of competition law.  We must now wait to see if Safeway is successful at trial once all of the evidence has been considered.  If it is then it will signal further personal risk for employees who engage in anti-competitive practices.  The result will surely be that employees demand more and more guidance on what they can and cannot do.  Compliance officers and in house legal departments can expect their phones to be busy!

Related opinions

Public Contract Regulations 2015 published

With a burst of excitement following the response to the consultation on the UK’s Transposition of new EU Procurement Directives issued by the Cabinet Office last week the final draft of the new regulations were laid before parliament yesterday.

View blog

Franchising – assessing ‘good faith’ and ‘protected business’ rights

In the recent case of Carewatch Care Services Ltd v Focus Caring Services Ltd & Ors the High Court granted the claimant franchisor injunctive relief to enforce restrictive covenants and the ‘step-in’ provisions under a franchise agreement.

View blog

New public procurement thresholds published

The European Commission has published the new public procurement thresholds to apply from 1 Jan 2014.

View blog

Court fees consultation to increase civil claims costs

A consultation on court fees proposes that parties to some civil and commercial claims could subsidise other cases, and pay for investment in the court system.

View blog

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up