ON 29 September 2011, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, published the Competition (Amendment) Bill 2011. The Bill was introduced for the purpose of strengthening competition law enforcement in Ireland by providing new and increased sanctions and penalties. Under the EU/IMF Programme of Financial Support for Ireland, the Government is required to introduce legislation to bolster the enforcement of competition law in the State.
Current Irish competition legislation - the Competition Act 2002 (as amended) - already provides sanctions for breaches of competition law, including fines and prison sentences, but the penalties are significantly increased under the Bill. The Minister stated that the new legislation: “will provide a more effective deterrent and punishment for individuals or organisations who engage in price-fixing, cartels, abuse of a dominant position and other anti-competitive practices.”
Typically competition offences are categorized as either “hard core offences” such as price fixing cartels and agreements to limit output or sales or share markets, or “non-hard core offences” such as the abuse of a dominant position on a market and applying dissimilar conditions to equivalent transactions.
The changes to be introduced by the Bill include:
An increase from 5 to 10 years of the maximum prison sentence for conviction on indictment of hard core competition offences;
- An increase from €4 million to €5 million in the level of fine for conviction on indictment of specified competition offences;
- Where a person is convicted of an offence under the Competition Acts, the Court will be obliged to order that person to pay the costs and expenses incurred by the relevant competent authority as measured by the court in relation to the investigation, detection and prosecution of the offence, unless there are special and substantial reasons for not so doing;
- Section 160 of the Companies Act 1990 will be amended so that certain breaches of competition law will be added to the lists of circumstances under which the Court may make a disqualification order against that person. A disqualification order may preclude the person concerned from certain appointments in relation to any company including that the person cannot act as a director of any company or be in any way, directly or indirectly, concerned or take part in the promotion, formation or management of any company;
- Where a Court has determined that an undertaking was engaged in prohibited anti-competitive conduct or practices, the findings shall be "res judicata" and therefore it will not be necessary for a person in subsequent proceedings (e.g. a person taking a civil action for damages after a prosecution) to prove that the conduct was prohibited; and
- A person convicted of certain competition offences will not be eligible for probation under Section 1(1) of the Probation of Offenders Act 1907. The Probation Act empowers a court to release an offender on probation and dismiss the charge in certain circumstances including where the offence is of a trivial nature.
Company directors should note that the Courts have recently shown they are willing to enforce custodial sentences for white collar crime. Very recently, for example, two construction company directors were sentenced to five months imprisonment in a case taken by The Pensions Board. On 26 September 2011, in Wexford District Court, Judge Coughlan imposed a custodial sentence of five months imprisonment on two directors of Goff Developments Limited, in relation to failing to remit pension contributions to the Construction Workers Pension Scheme (CWPS) for the period between November 2008 and December 2009. Both directors were also fined €4,000 with five months to pay.
On 29 September 2011, the Minister also announced that he has signed an Order to commence Section 10 of the Competition Act 2002, which is designed to assist juries in considering evidence during trials for breaches of competition law, which can often include complex financial and economic information. Section 10 provides that in a trial on indictment of certain competition offences, the trial judge may order that copies of any or all of the following documents shall be given to the jury in any form that the judge considers appropriate:
a) any document admitted in evidence at the trial;
b) the transcript of the opening speeches of counsel;
c) any charts, diagrams, graphics, schedules or agreed summaries of evidence produced at the trial;
d) the transcript of the whole or any part of the evidence given at the trial;
e) the transcript of the closing speeches of counsel; and
f) the transcript of the trial judge's charge to the jury.
The Minister stated that the above would: “make it easier to investigate and prosecute what are often highly complex cases in this area.”