OFT Considers Wider Use of Director Disqualification Powers

The UK’s Office of Fair Trading (OFT) has published proposed changes to its guidance on director disqualification orders in competition law cases.

A company director can be disqualified from acting as a director for up to 15 years if their company is involved in a breach of competition law and the court considers they are unfit to be involved in the management of a company as a result.

The OFT’s guidance currently indicates that the OFT or a regulator would focus on cases where a director was directly involved in a breach of competition law, such as cartel activity. Under the proposed changes, the guidance would indicate that the OFT or a regulator would also focus on 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.

The consultation also considers a number of other changes to the detail of the OFT’s guidance. The consultation period will end on 20 November 2009.

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.”

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