The Office of Fair Trading is considering widening its use of penalties against directors for breaching competition law
The Office of Fair Trading (OFT) is considering whether to extend its use of director disqualification orders in competition law cases.
Under the Directors Disqualification Act of 1986 the OFT and other regulators can issue a Competition Disqualification Order (CDO) if his or her company is involved in a breach of competition law.
A director can be disqualified from acting as a director for up to 15 years if they are the target of a CDO and a court considers them unfit of being involved in the management of a company as a result.
Currently the OFT usually focuses on cases where a director is directly involved in a breach of competition law, such as cartel activity. The regulator is considering extending this to include cases where a director should have taken steps to prevent a breach or where a director ought to have known of a breach but did not.
“We know that the prospect of being disqualified as a director is one of the most powerful deterrents to anti-competitive behaviour.
Ali Nikpay, OFT senior director of policy
No change in the law is necessary for the OFT to pursue directors with increased rigour. The OFT clearly thinks that the way it has used its powers so far has not provided the desired deterrent against anti-competitive behaviour, and that’s why greater use of CDOs is called for.
Ali Nikpay, OFT senior director of policy, said: 'We know that the prospect of being disqualified as a director is one of the most powerful deterrents to anti-competitive behaviour. Our proposals aim to increase the incentives on company directors to take responsibility for competition law compliance and tackle behaviour that harms competition.'
The consultation period for the proposed changes will end on November 20 2009.