Avoiding disqualification:advice for company directors

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Daniel Aston, managing director of the online poster supplier Trod Ltd, has given a disqualification undertaking not to act as a director of any UK company for 5 years.

This followed the CMA’s decision of 12 August 2016 that Trod breached competition law by agreeing with one of its competing online sellers that they would not undercut each other’s prices for posters and frames sold on Amazon’s UK website. The CMA also fined Trod Ltd £163,371.

The UK Competition and Markets Authority (CMA) have just published a “60-second summary” for company directors to avoid disqualification for breaches of competition law and can be found by following this link.

This is part of a series of CMA short and simple guides on competition law and is relevant to all directors whose companies fall within the scope of EU or UK competition law.

The Company Director Disqualification Act 1986 allows the CMA to apply to court for an order disqualifying a director from holding company directorships or performing certain roles in relation to a company for a specified period of a minimum of 2 years up to a maximum 15 years. It can also accept undertakings by a director.

The following simple conditions must be satisfied when issuing a disqualification order:

A company of which the individual is a director commits a breach of competition law; and
The individual’s conduct as a director makes him unfit to be concerned in the management of a company.

The CMA has high expectations of directors which was also confirmed in the 60-second summary: “Company directors have a special responsibility to be well-informed about their company practices and to be sure they comply with the law”.

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