On 28 May 2010, the Court of Appeal (CA) handed down a ruling on the interpretation of the requirement of dishonesty in the criminal cartel offence. The issue arose during the preparatory hearings in the price-fixing trial against four British Airways executives, which collapsed in May 2010. The defendants argued that the prosecution had to prove dishonesty both on the part of the defendants and on the part of the Virgin Atlantic executives with whom they allegedly agreed to fix prices. The trial judge had found that it was necessary to prove dishonesty only on the part of the defendants. The CA upheld this finding.
The law relating to cartel offences states that an individual is guilty of an offence if he or she dishonestly agrees with one or more other persons to make, implement, or cause to be made or implemented, arrangements whereby at least two undertakings will engage in one or more prohibited cartel activity (e.g. price fixing, agreements to limit supply or production, to share markets and to rig bids). The cartel offence is indictable and if found guilty, a person guilty of committing a cartel offence can face up to five years in prison and/or an unlimited fine.
Four former British Airways executives were charged with a cartel offence following allegations that they had dishonestly agreed with three Virgin Atlantic executives to fix prices on certain flight routes.
The issue under appeal
The submission of the prosecution, which was accepted by the trial judge, is that they need to prove dishonesty only on the part of the British Airways executives. The defence argued that that was not enough and that there must be mutual dishonesty on the part of both the defendants and the Virgin Atlantic employees.
The CA agreed with the trial judge and with the arguments of the prosecution that the ordinary and natural language of the statute setting out the law is clear.
The CA considered that if the intention of the legislature had been to limit criminality to cases of mutual dishonesty, the legislation would not have been drafted to refer explicitly to “an individual”.
Furthermore, the CA said it wouldfind it “surprising” if the legislative intention had been to relieve a dishonest defendant of criminal liability simply because dishonesty was not also established against any individual in the corresponding undertaking.
The CA therefore dismissed the appeal.
The trial against the four British Airways executives collapsed on 10 May 2010 when the OFT was unable to produce sufficient evidence and withdraw the prosecution, which resulted in the four individuals being acquitted. However the ruling will help provide legal certainty on the requirement of dishonesty in future cartel offences.