The High Court has refused an application by a director to remain in post after being disqualified by the CMA for his role in an illegal demolition cartel
High Court rejects request from Nicholas Brown to continue to act as a director, after he was disqualified for being involved in an illegal cartel
CMA Senior Director: “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”
In March 2023, the Competition and Markets Authority (CMA) fined 10 construction firms a total of nearly £60 million for illegally colluding to rig bids for demolition and asbestos removal contracts, involving both public and private sector projects.
The CMA also secured the disqualification of 4 directors of firms involved in the unlawful conduct. One of those directors, Nicholas Brown, the former Managing Director of the Brown and Mason Group, was personally involved in 2 breaches of competition law affecting contracts for demolition services with a total value of over £30 million – one relating to the Shell Building on London’s Southbank, and the other relating to the Lots Road Power Station in London. The CMA accepted an undertaking from Mr Brown in May 2023, whereby he agreed to a 7-year disqualification as a result of his admitted role in the illegal behaviour.
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 2 competitors. Mr 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. Mr 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, Mr 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.
Today, the High Court issued its judgment refusing Mr Brown’s application. The Court agreed with the CMA that, in view of the circumstances – including the nature and seriousness of Mr Brown’s behaviour – and the importance of director disqualification in the CMA’s enforcement toolkit, granting an exemption from Mr 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.”
Juliette Enser, the CMA’s Senior Director of Cartels, 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.
Mr 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. Thereafter, Mr Brown will not be permitted to act as a director or participate in the management of any company until 29 July 2030.
More information on this case is available on the following case pages: Supply of construction services: director disqualification and construction services case page.
Notes to Editors
Under the Company Directors Disqualification Act, the CMA has the power to apply to the court to disqualify a director from holding company directorships or performing certain roles in relation to a company for a specified period, if a company of which they are a director has breached competition law and they have by their conduct shown themselves unfit to hold office. The Act also allows the CMA to accept a disqualification undertaking from a director instead of bringing proceedings, which has the same legal effect as a disqualification order.
A director who has been disqualified (whether by undertaking or court order) has the right to apply to the High Court for permission to continue to act as a director, or otherwise be involved in the management of a business. An application for permission to act is not an appeal against the director’s disqualification. Instead, it is a request by the disqualified director to the Court for an exemption to the disqualification in order to carry out a specific role or function, where the director will remain disqualified for all other purposes. Wherever such an application is made, the CMA is required to appear before the Court and draw to the Court’s attention any matters which appear to the CMA to be relevant to the Court’s exercise of its discretion to grant or refuse the permission sought.
The register of disqualified directors is published on the Companies House website.
For more information on anti-trust investigations, visit the CMA’s procedures in Competition Act 1998 cases.
A copy of Mr Brown’s competition disqualification undertaking is available at the following link.
In February 2023, the CMA secured legally binding disqualification undertakings from Michael Cantillon (former director of Cantillon) for 7 years and 6 months, David Darsey (former director of Erith) for 5 years and 10 months and Paul Cluskey (director of Cantillon) for 4 years and 6 months.
Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email cartelshotline@cma.gov.uk.
All media enquiries should be directed to the CMA press office by email on press@cma.gov.uk, or by phone on 020 3738 6460.