Competition disqualification—first application for permission to act following disqualification (Re Fourfront Group Ltd and others)

Competition disqualification—first application for permission to act following disqualification (Re Fourfront Group Ltd and others)

The court granted permission for the applicants to continue to act as directors of, and be involved in the management of, certain companies within the Fourfront Group. The applicants offered disqualification undertakings following an investigation by the Competition and Markets Authority (CMA) which found breaches of competition law within the group. The CMA is increasingly flexing its muscles in this area, with nine of the 12 competition disqualifications that have been obtained by the CMA having been secured in the last year, and this was the first application for permission to act as a director following a competition disqualification. Written by Christopher Buckley, barrister at Radcliffe Chambers, who appeared for the claimants.

Re Fourfront Group Ltd and others [2019] EWHC 3318 (Ch)

What are the practical implications of this case?

This was the first occasion on which the court considered competition disqualifications.

The relevant sections (ss 9A-9E) were inserted into the Company Directors Disqualification Act 1986 (CDDA 1986) in 2003, but the first disqualification was not obtained by the CMA until December 2006. The CMA is now looking to make greater use of its power to apply for disqualification orders/accept disqualification undertakings and has obtained 12 disqualifications, including nine in the last year, all by way of undertaking.

In terms of how the court will approach applications for permission to act in competition cases the following is of note:

  • it appears the court will be more cautious in competition cases. As noted below, the judge observed that the competition breach involved dishonesty. He also noted that while the bracket into which the disqualification period falls is a convenient shorthand, it is the seriousness of the conduct that should be considered rather than the period of disqualification per se  
  • the correct starting point is the schedule of unfitness. The judge did not have regard to either (i) the factors the applicants sought to highlight to demonstrate the low risk they posed, or (ii) the pre-undertaking correspondence and primary materials put in evidence

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About the author:

Zahra started working as a paralegal at Lexis Nexis in Banking and Insolvency teams in April 2019. Zahra graduated with a 2.1 honours in a BA French and Spanish, completed the GDL at BPP University and is seeking some experience before commencing the LPC. She has undertaken voluntary work for law firms in London, Argentina and Colombia.