Update: How the CMA Investigates Cartels

Update: How the CMA Investigates Cartels

The Competition and Markets Authority (“CMA”) recently published a blog entitled, How the CMA investigates cartels. This explains what the CMA frequently does as part of its evidence-gathering process, including, for example, undertaking covert surveillance, or executing dawn raids. This is a good read for practitioners undertaking work in this area, as well as businesses at risk of such regulatory interventions.

The CMA has set out details of how cartel investigations commence, for example, from organic intelligence-gathering and tip-offs to self-reporting. They outline their powers, including with regard to dawn raids, interviews, and compelling organisations to produce information. The CMA then go on to outline the process of setting out a “Statement of Objections” - that is, the CMA’s initial findings from their cartel investigation. Subjects have an opportunity to reply to this. The matter may then proceed to a final, published CMA decision.

Where criminal sanctions are being entertained, the CMA will also carry out an assessment on whether there are sufficient grounds for individuals or businesses to be charged and prosecuted in the criminal courts.

The CMA also outline the exercising of their discretion in applying to the Court for the directors of companies guilty of cartel behaviour to be disqualified from acting as company directors (for up to 15 years).

All in all, worth a read!

Should you have any queries with regard to this article, or if you are subject to investigations by the CMA or any other regulatory body, please do not hesitate to contact me: contact@crimelawyer.co.uk

FCA issues its first decision under competition law

FCA Press Release

“The [UK’s] Financial Conduct Authority (FCA) has issued a decision which finds that 3 asset management firms breached competition law. This is the FCA’s first formal decision under its competition enforcement powers.

The firms are:

  • Hargreave Hale Ltd

  • Newton Investment Management Limited

  • River and Mercantile Asset Management LLP (RAMAM)

The FCA has fined Hargreave Hale £306,300 and RAMAM £108,600. The FCA has not imposed a fine on Newton because it was given immunity under the competition leniency programme.

The infringements consisted of the sharing of strategic information, on a bilateral basis, between competing asset management firms during one initial public offering and one placing, shortly before the share prices were set. The firms disclosed and/or accepted otherwise confidential bidding intentions, in the form of the price they were willing to pay and sometimes the volume they wished to acquire. This allowed one firm to know another's plans during the IPO or placing process when they should have been competing for shares.

Asset managers bid for the shares they want in IPOs and placings against competing asset managers in prevailing market practice. If asset managers share detailed and otherwise confidential information about their bids with each other, they undermine the process by which prices are set. This can reduce pressure to make bids that reflect what they really think the company is worth. This could reduce the share price achieved by the IPO or placing and so raise the cost of equity capital for the issuing company. Firms rely on such capital as a way of financing investments, so unlawful information sharing could increase the cost of related investments or even make them unviable.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:

'This is our first case using our competition law powers and demonstrates our commitment to taking enforcement action to protect competition. Asset management firms must take care to avoid undermining how prices are properly set for shares in both IPOs and placings. Failure to do so risks them acting illegally. The FCA will act when markets that play a vital role in helping companies raise capital in the UK’s financial markets are put at risk. We can also take regulatory action against an individual and did so here with respect to some of the same facts.'

Over £31 billion was raised on just the London Stock Exchange (LSE) markets in new investment between 2015 and 2018. This shows how important it is to protect competition in the primary capital markets during a book-building process.

The FCA has also decided that there are no grounds for action in respect of conduct between Artemis Investment Management LLP and Newton that took place between April and May 2014 in relation to an IPO.

Separately, on 5 February 2019, the FCA announced that it had fined an individual under the Financial Services and Markets Act 2000 (FSMA) for conduct related to some of the same facts investigated under the Competition Act”.

Credit: FCA Press Release


The FCA has had competition law enforcement powers since 2015, but has only just used these powers in the above case, which is all about anti-competitive exchange of strategic information between asset management firms. The issue here was the sharing of confidential bidding intentions.

This sharing of information effectively undermines price setting processes, which could have an impact on the cost of related investments.

Traditionally, the Competition and Markets Authority (CMA) have led the way in investigating suspected competition law infringements. But the recent appointment of Sheldon Mills, a former Senior Director at the CMA, as the FCA’s new Director of Competition demonstrates the FCA’s commitment to competition law enforcement.

Ultimately, the message is: the FCA are upping their enforcement game - they are a regulator with teeth, and financial institutions need to continually review compliance policies and risks, including with regard to the sharing of information. If in doubt, seek legal advice!

Modern Slavery and Drug Offences

Can Modern Slavery be a defence to drug dealing offences?

The short answer is, ‘it depends’ - read on!

Section 45 of the Modern Slavery Act 2015 provides a defence to specific criminal charges where it is shown that they were committed under a compulsion due to slavery or exploitation (for over-18s) or as a direct consequence of slavery or exploitation (for under-18s).

The latter test, for children, is less difficult to establish. It is a defence similar to duress.

It can, for example, be used for drugs offences committed as part of a ‘County Lines’ drugs ring. The government’s guidance on this can be found here.

What else is Modern Slavery a defence to?

The Modern Slavery defence can be used for any criminal offence not listed in Schedule 4 of the Modern Slavery Act 2015.

It can’t be used for serious crimes like murder, manslaughter, kidnapping, piracy, serious violence, firearms offences, robbery, burglary, arson, criminal damage, most sexual offences, or modern slavery offences themselves. There are other offences to which the defence does not apply.

 It can be used as a defence to any other crime. It is used for victims of ‘County Lines’ drugs offences but also applies to most immigration offences, minor assaults, theft, or conspiracy to do any of these things. Anyone who is trafficked or exploited can potentially benefit from it.

Children may be exploited for a variety of reasons by gangs and used to carry and supply drugs. Children who are particularly vulnerable are often targeted, and they may feel that they can't tell anyone in case they are arrested and punished.

 What needs to be proved?

The defence requires several things, depending on a person's age. In both cases, they need to be a victim of slavery or exploitation.

 Those over 18 rely on s.45(1), where they are not guilty if:

 1) The crime is committed because they are made to do it

 2) They are made to do it for some reason connected to the slavery or exploitation

 3) A reasonable person, with the same characteristics, would not have had a realistic alternative in that situation.

A person under 18 relies on s.45(4), where they are not guilty if:

1) The crime is committed as a result of the person being or having been in the past, a victim of slavery or exploitation, and

2) A reasonable person, with the same characteristics, would have done the same.

The defence for under-18s is less difficult to establish, reflecting the increased vulnerability of children. 

A person has to raise enough evidence for it to be possible that they are a victim of slavery of exploitation within the meaning of the Act. The prosecution will have to disprove that beyond a reasonable doubt.

 If they cannot, a person then has to show it’s possible that the offence was carried out either under a compulsion relevant to (over-18) or as a direct consequence of (under-18), that slavery or exploitation. This, again, will have to be disproven beyond a reasonable doubt.

 If the prosecution cannot disprove either of these things, then the defence should succeed.

 How can I help?

Modern slavery cases are important and sensitive cases to deal with. I can advise you on whether you have a defence, and help you put that defence forward, advising on prospects of success and instructing experts to help along the way.

This is only a general overview of the law. For in-depth advice, contact me via contact@crimelawyer.co.uk.

The Risks of "doing lifts"

The risks of “doing lifts”

The Times as recently highlighted the dangers of “doing lifts” , a social media trend where people with cars are connected to those looking for a lift somewhere - for an agreed fee. Sound familiar? Yes - it’s effectively a cab service.

The report can be found here.

The Times’ reported, that “18 Facebook groups with a total of more than 50,000 members where people advertised or sought “lifts” for cash from drivers without taxi or private hire licenses. Many lifts drivers are students and others are in their teens or twenties. They ferry people to and from clubs and house parties, taking their highest earnings on New Year’s Eve…Drivers and passengers often claim that licensed taxis are too expensive or are unavailable on busy nights but the police warn that clients risk travelling in unsafe or uninsured cars with drivers who could be sexual predators”.

There is some discourse around whether payment is for petrol and running costs, or whether it represents profits. Where a profit is made, there is a question of whether the driver is taxi touting / plying for hire. Where a driver is generating a profit from the trip this may also invalidate the car insurance policy.

But is it legal?

It is likely that the practice of “doing lifts” in the way described is unlawful. The question here is whether there is an illegal taxi service in operation.

There is no law against taking payment for fuel used - but you must be properly licensed to drive passengers in return for a fare.

The big issue here is public safety given the traveling public are getting lifts from strangers who are completely unscreened.

Drivers caught providing “lifts” in return for a fare are likely to be prosecuted and face a hefty fine and criminal record.

If you have any queries arising from this article, you can get in touch via contact@crimelawyer.co.uk.

Taxi & Private Hire Drivers - Are you fit enough?


Taxi & Private Hire (“TPH”) drivers and operators are licensed by their relevant Local Authority or, in London, by Transport for London (“TfL”).

In recent years, there has been an increased focus on compliance in light of concerns surrounding public safety, and many licensing authorities have seen an increase in funding towards its enforcement functions.

Since the Mayor of London’s announcement of a “new era” for the capital’s Taxi & Private Hire market, TfL have invested in many more compliance officers across London, and with increased powers to “combat illegal taxi and private hire activity”.

With public safety in focus, and pressures on controlling the number of licensed TPH drivers, licence holders are under scrutiny more now than ever, and at risk of being subject to irrational and disproportionate decisions by licensing authorities. In light of this, it is essential to know where you stand and how such decision can be effectively challenged.

Being “Fit and Proper”

Your licence can be refused, suspended or revoked if the licensing authority considers you are not “fit and proper” to hold a licence.

Common reasons for coming to this decision include where:

  • You receive a caution or conviction for driving offences, e.g. touting for hire, driving without insurance, careless/dangerous driving etc;

  • You receive a caution or conviction for other criminal offences, e.g. offences involving violence, dishonesty and sexual offences etc;

  • Unproven criminal allegations are made;

  • Customer complaints are made;

  • Vehicle safety concerns are raised;

  • Administrative issues are identified, such as poor record keeping, signage etc.

Whatever the alleged act or omission, the licensing authority will be arguing that you are not not “fit and proper” to hold a licence because of the conduct complained of (e.g. the conviction).

Most licensing authorities adopt their own guidance when considering how they should exercise their powers in order that they are consistent and reasonable.

The fitness test will consider, amongst other things, your:

  • Character

  • Likelihood of offending

  • Health

  • Driving ability

The licensing authority will assess whether you have a tendency to behave in ways that render you unsuitable to work with the traveling public, children or vulnerable adults as a result of the matters complained of. 

Appealing a Decision

In practice, when a decision to refuse, suspend or revoke your licence is contemplated, you may receive a letter from a Licensing Manager informing you of the relevant information that has come to their attention. This could be information provided by the police of a caution having been administered. You may be offered an opportunity to make representations before a decision is made.

Once a decision is made, the Licensing Manager will write to you confirming the decision and the basis upon which it is made.

You will also be informed of whether the decision has immediate affect, or whether you are entitled to work if you appeal the decision. In most cases you can continue to work as a licensed driver pending the outcome of the appeal.

You should also be given information about your appeal rights.

If you are not happy with the decision to refuse, suspend or revoke your licence, you can appeal to the Magistrates’ Court on that basis that you remain fit an proper to hold a licence and/or that the decision is irrational or disproportionate to the alleged offence.

Such an appeal must be lodged within 21 days of the relevant decision.

The Appeal Hearing

At the appeal hearing itself, the Court will consider whether you are in fact “fit and proper” to hold a licence. Every case will be different and should be considered on its own particular merits.

When hearing an appeal, the Court will consider the issues of public safety and an individual’s Human Rights.

The role of the Court on hearing an appeal is to form their own independent judgment of the issue at hand, and not simply to review the decision of the licensing decision (as per McCool v Rushcliffe Borough Council [1998] EWHC Admin 695).

In reaching such a decision, the Court is entitled to rely on any evidential material which might reasonably and properly influence the making of a responsible judgment in good faith on the question in issue; including hearsay evidence.  It is for the Appellant to show that he is a "fit and proper” person to hold a licence on the balance on probabilities.

If an appeal to the Magistrates’ Court is unsuccessful, it is also possible to appeal further to the Crown Court.

It should be noted that, where an appeal fails, it is likely that a costs order will be awarded against you and in favour of the relevant licensing authority.

How can I assist?

I can assist with drafting written representations to the licensing authority, prior to a formal suspension or revocation decision being made, as well as providing advice on the preparation of your appeal, and representation at the appeal hearing itself.

If you are a private hire driver or operator requiring advice and assistance, please contact me on 07766001774 or via email (contact@crimelawyer.co.uk).