In our Law Now article of 21 December 2010, we advised that the
Court of Appeal had unanimously ruled that a corporate undertaking,
upon which the OFT had imposed a penalty for breaches of
competition law, could not sue its former directors, officers or
employees for damages equivalent to that penalty or the costs of
the OFT investigation that the claimant had had to bear.
The Court of Appeal held that Safeway's claim should be struck
out as under the Competition Act 1998 such penalties were intended
to be personal to the corporate undertaking and therefore any claim
against its directors or employees would be barred by the maxim
'ex turpi causa' (i.e. a claimant cannot recover for the
consequences of his own criminal or quasi criminal act).
Safeway sought permission from the Supreme Court to appeal against
the Court of Appeal's decision. The Supreme Court has refused
permission to appeal, meaning that the unanimous decision of the
Court of Appeal remains good law and directors and employees cannot
be made to compensate their current or former employers if such a
penalty is imposed by the OFT.
This decision is positive news for senior management (or
potentially more junior employees) in industry who would otherwise
potentially risk being the subject of claims for significant
damages should the OFT impose a fine on their employer. It will
also be of interest to D&O insurers to whom senior management
might have turned if such claims had been permitted.
For further reading see Safeway Stores Ltd and Others v Twigger and Others
[2010] EWCA Civ 1472 and our previous
Law Now
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 07/04/2011.