Wednesday, 12 May 2010

Cartel prosecution collapses

The first prosecution under the provisions in the Enterprise Act 2002 which created the offence of being involved in a cartel started a couple of days ago and didn't last long. I don't need to reiterate the facts: the FT has the story here. It doesn't reflect well on anyone, except the British Airways executives who have left court without a stain on their characters. Virgin, who blew the whistle on the alleged (as I'd better make sure I call it) price-fixing arrangement, faces accusations that it was not as frank with the Office of Fair Trading as it was obliged to be to win immunity, while it says that the OFT was responsible for failing to find the emails that fatally undermined the prosecution. Questions have also been raised about the OFT's conduct, and it's alleged that they effectively delegated evidence-gathering to Virgin's lawyers. At least, that's what the reports say, but you should never believe what you read in the papers (even, unfortunately, the FT, although you can believe more of it than others, I think). The US authorities aren't amused, either, as they seemed to be relying on their British counterparts to deal with a competition issue that hit consumers there too.
Leaving aside the consequences for this particular case, it seems to me that this raises important questions about the forensic skills of the OFT. The competition people were doing what must have been their first criminal investigation, and the rules are different from those that apply when they are doing a regular competition investigation, so I can imagine there's plenty of scope for error. When a client was raided by the OFT a few years ago I marvelled at the way the investigators searched for emails - asking executives to search through email files using key words chosen by the OFT. That seems to offer plenty of opportunity for concealment, if you can guess what words the investigator might think would yield the evidence they wanted. It also seemed just a little low-tech, though that's not to say that it might not be effective.
Here, a load of emails, in a supposedly corrupted file, seem to have slipped through the net - although they were eventually picked up, but so late that the trial still had to be aborted. It hardly looks like a piece of law with the teeth we were given to believe it had been endowed with, although it never reached the stage where the application of the law fell to be considered. How long before anyone tries to wheel it out again, I wonder? Or will we just quietly forget that it was ever placed on the statute book - tacitly acknowledging it to be the aberration people thought it was at the time?

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