Investigation and settlement

Legal representation

Under which circumstances would the company and officers or employees need separate legal representation? Do the authorities require separate legal representation during certain types of investigations?

The need for separate legal representation for a company and its officers or employees usually arises where there is a conflict of interest or a risk of one.

Any person being formally questioned or interviewed may request to have a legal advisor present. The person in question may choose to be represented by a legal adviser acting for the company under investigation, but the starting point of the Competition and Markets Authority (CMA) is that it would generally be inappropriate for a legal advisor only acting for the company to be present in the interview as there may, in certain circumstances, be a risk that the presence in an interview of a legal advisor acting for the business could prejudice the investigation.

Dawn raids

For what types of infringement would the regulatory authority launch a dawn raid? Are there any specific procedural rules for dawn raids?

The CMA has the ability to, and in practice does, carry out dawn raids to obtain information. The CMA can enter business premises (either with or without a warrant) and domestic premises (with a warrant).

When the CMA enters premises without a warrant, it must usually do so having given notice. It may require persons to:

  • provide relevant documents (including those stored electronically);
  • provide an explanation of produced documents; and
  • inform the CMA about a relevant document’s location.


When the CMA enters premises with a warrant (mostly used for suspected cartels), the CMA may (in addition to the above):

  • enter using reasonably necessary force if prevented from entering;
  • search the premises for documents covered by the warrant (including those stored electronically); and
  • seize documents (or copies) and take copies of electronic devices.

What are the company’s rights and obligations during a dawn raid?

An investigating officer entering premises must, upon request, allow a reasonable time for the occupier of a premise’s legal adviser to arrive before continuing the investigation, although only if the officer considers it is reasonable to do so and where the officer is satisfied that any conditions he or she considers it appropriate to impose are being, or will be, complied with (conditions may include sealing filing cabinets, suspending external emails or calls and allowing the CMA to enter offices of its choosing).

Within the context of an investigation, a company has the right to withhold from disclosure any privileged communications. In the event of a dispute over privilege, the CMA may request that documents are placed in a sealed envelope pending resolution of the dispute.

A business also has the right to privilege against self-incrimination; in other words, the CMA cannot force a business representative to provide answers that would require an admission that the company has infringed the law.

Settlement mechanisms

Is there any mechanism to settle, or to make commitments to regulators, during an investigation?

Where the CMA has started an investigation, it may accept commitments to address its competition concerns. Commitments are binding promises in respect of future behaviour and may be structural or behavioural.

Acceptance of commitments is at the CMA’s discretion. The CMA is only likely to do so where the competition concerns are readily identifiable and will be addressed by the commitments. Where commitments are accepted, the CMA will not continue its investigation or make an infringement decision.

Settlement is a possibility in any case falling within the Chapter I or Chapter II prohibitions. Settlement offers a streamlined administrative procedure and a reduction in the fine (in addition to any fine reduction for leniency). The amount of the discount will be up to 20 per cent for settlement before a statement of objections is issued and up to 10 per cent after. Whether a case is suitable for settlement is a decision for the CMA.

Settlement requires a company to, inter alia, admit liability in relation to the nature, scope and duration of the infringement; cease the infringing behaviour (to the extent it has not done so); and confirm it will pay a penalty set at a maximum amount.

What weight will the authorities place on companies implementing or amending a compliance programme in settlement negotiations?

Implementation or amendment of a compliance programme is not a precondition for settlement. In general, evidence of a company taking ‘adequate steps’ to improve compliance may lead to a discount in fine of up to 10 per cent.

Corporate monitorships

Are corporate monitorships used in your jurisdiction?

Appointment of a monitoring trustee is not uncommon in merger proceedings.

The CMA may require that a monitoring trustee be appointed to assess the extent of integration and make recommendations about how to mitigate the risk of pre-emptive action. The monitoring trustee will monitor and report on compliance with interim measures imposed by the CMA.

A monitoring trustee is much more commonly employed during Phase 2 investigations for completed mergers than during Phase 1 investigations. Monitoring trustees may be employed at Phase 1 where certain risk factors are present, such as substantial integration of the merging businesses prior to the imposition of interim measures.

Failure to comply with interim measures may lead to the CMA issuing directions or imposing a fine of up to 5 per cent of the company’s turnover.

Statements of facts

Are agreed statements of facts in a settlement with the authorities automatically admissible as evidence in actions for private damages, including class actions or representative claims?

In private damages actions, the EU Damages Directive and its implementing provisions make clear that in competition proceedings, a court or the Tribunal must not make a disclosure order in respect of a settlement submission that has not been withdrawn.

Settlement submission means a voluntary statement made, orally or in writing, to a competition authority by or on behalf of an undertaking that is made for the sole purpose of allowing the competition authority to follow a simplified or expedited procedure in connection with the infringement and which states that the undertaking either accepts that it has infringed competition law, or does not accept that it has infringed competition law but will not dispute a decision of the competition authority that it has done so.

Invoking legal privilege

Can the company or an individual invoke legal privilege or privilege against self-incrimination in an investigation?

Litigation privilege concerns confidential communications between a lawyer and client or a third party which came into existence for the dominant purpose of litigation, which is of reasonable prospect. Each case turns on its own facts. In Tesco v Office of Fair Trading, the Competition Appeal Tribunal held that once a statement of objections was issued, the investigation was no less adversarial than civil proceedings. In Serious Fraud Office v Eurasian Natural Resources Corporation, the Court of Appeal found, following a holistic view of the evidence, that documents created as part of an internal investigation following a whistle-blower’s allegations of ‘corruption and financial wrongdoing’ were protected by privilege as criminal legal proceedings against Eurasian Natural Resources Corporation were reasonably in contemplation at the time.

Legal advice privilege concerns confidential communications between a lawyer and a client for the purpose of giving or obtaining legal advice or assistance. Under English law, the definition of ‘lawyer’ within the context of legal advice privilege is broad and includes both English qualified in-house counsel as well as lawyers in private practice. By contrast, the definition of ‘client’ is narrow. In the Three Rivers case, the Court of Appeal confirmed that the client is not the entire company but only the small group of individuals who have been liaising with the lawyer for advice. Therefore, communications between a lawyer and employees of the firm who do not fall within the definition of the ‘client’ are not protected by legal advice privilege.

The CMA cannot force a business to provide answers that would require an admission that it has infringed the law; however, it can ask factual questions, such as whether a particular individual attended a meeting. The CMA can also ask questions about documents already in existence or ask for their production.

Confidentiality protection

What confidentiality protection is afforded to the company or individual, or both, involved in competition investigations?

The CMA says that it ‘aims to be reasonable when requesting and handling information, and to protect confidential information in a manner that is appropriate in the circumstances of the case’. In addition, the CMA is subject to the statutory obligations of the Enterprise Act 2002 to protect confidential information that comes to it in connection with the exercise of its statutory functions. However, the Act allows for the disclosure of specified information in certain circumstances.

In practice, those who participate in a CMA case will usually be given an opportunity to identify confidential information in documents before their disclosure into the public domain.

Refusal to cooperate

What are the penalties for refusing to cooperate with the authorities in an investigation?

The CMA has various powers to impose penalties for failure to comply under both the Enterprise Act  (in relation to markets or mergers investigations) and under the Competition Act, including failures to attend interview or provide documents. The CMA may impose administrative penalties as it considers appropriate (subject to statutory maxima, which depend on the nature of the failure to comply).

In addition, certain acts may also give rise to the risk of committing a criminal offence either in the context of merger investigations or in Competition Act investigations (eg, where a person intentionally alters, suppresses or destroys requested documents or knowingly or recklessly provides false or misleading information).

Infringement notification

Is there a duty to notify the regulator of competition infringements?

There is no general duty imposed on companies to notify of competition infringements. By way of exception, there may be specific obligations to do so within certain sectors (under rules laid out in the Financial Conduct Authority’s Handbook).

Limitation period

What are the limitation periods for competition infringements?

There are no limitation periods for public enforcement of competition law.

Limitation periods for private enforcement of competition law infringements are generally six years (although there are exceptions). In line with the Damages Directive, the limitation period for a competition claim begins with the later of:

  • the day on which the infringement ceases; and
  • the claimant’s day of knowledge – which is the day the claimant first knows or could reasonably be expected to know of the infringer’s behaviour – that the behaviour constitutes an infringement; that the claimant has suffered loss or damage arising from that infringement; and of the identity of the infringer.


The limitation period may be suspended in certain circumstances, including during an investigation by a competition authority.