The High Court has refused an application by a director to remain in post after being disqualified by the Competition & Markets Authority (CMA) for his role in an illegal demolition cartel.
Nicholas Brown, former managing director of the Brown and Mason Group, was personally involved in two breaches of competition law affecting demolition contracts with a total value of over £30m.
These contracts included the Shell Building on London’s South Bank and the Lots Road Power Station in London.
The CMA accepted an undertaking from Brown in May 2023, through which he agreed to a seven-year disqualification as a result of his admitted role in the illegal behaviour.
‘Fictional services and goods’
In March 2023, CMA fined 10 construction firms a total of nearly £60 million for illegally colluding to rig bids for demolition and asbestos removal contracts, involving public and private sector projects.
As part of the cartel agreements, so-called ‘compensation payments’ with a total value of £700,000 (excluding VAT) were paid to Brown and Mason by two competitors.
Brown admitted taking a “central role” in this conduct, including by instructing staff to collect the payments by issuing invoices relating to “fictional services and goods” that were not, in fact, ever supplied by Brown and Mason.
Brown also admitted that, as a shareholder in Brown and Mason, he stood to benefit personally from these payments, and that he understood at the time that his conduct was wrong.
In July 2023, Brown applied to the High Court for permission to continue to act as a director and to be involved in the management of Brown and Mason Limited and its holding company NRLB Limited, on the basis that the companies needed his continued services as a director.
‘Disqualifications are key to protecting the public’
The High Court agreed with the CMA that, given the circumstances (including the nature and seriousness of Brown’s behaviour) and the importance of director disqualification in the CMA’s enforcement toolkit, granting an exemption from Brown’s disqualification would not be appropriate.
The Court concluded that granting leave in this case “would be an overly great intrusion into the public benefit of this disqualification”.
Brown may remain in post at Brown and Mason Group Limited and NRLB Limited, subject to strict conditions, for a run-off period expiring on 28 July 2024 to enable transition at the companies. After that, Brown will not be permitted to act as a director or participate in the management of any company until 29 July 2030.
CMA’s senior director of cartels, Juliette Enser, said: “Director disqualifications are a key tool for protecting the public – and making sure those at the top of the chain are held responsible if their companies breach competition law. Bid-rigging and other illegal, anticompetitive practices, mean that businesses and consumers can end up paying over the odds or receiving worse services.
“Personal consequences, such as director disqualification, are a powerful deterrent – something which the Court’s decision clearly recognises. By rejecting Mr Brown’s request, the Court’s judgment has shown that protecting the public should not be undermined.”
Register for free and continue reading
This is not a first step towards a paywall. We need readers to register with us to help sustain creation of quality editorial content on Construction Management. Registering also means you can manage your own CPDs, comments, newsletter sign-ups and privacy settings. Thank you.