UK Businesses Unprepared For OFT's New Competition Powers

by Robin Pilgrim, LawAndTax-News.com, London

18 May 2004

According to the results of a survey conducted by UK law firm Addleshaw Goddard in the run-up to the granting on May 1 of new powers to enforce EU competition rules to UK courts and the Office of Fair Trading (OFT), many of the UK's largest firms are unprepared for the impact that the new regime may have on their businesses.

Although 60% of those questioned stated that they understood their legal obligations with regard to European and UK competition policy, the law firm revealed that nearly half have not trained senior staff in the prevention of problems in this area, and around a third have no policy in place in the event of a surprise visit from the OFT.

Commenting on the survey results, Addleshaw Goddard's competition partner, Jonathon Davey observed that:

"It was quite surprising to find that some of the UK's leading companies have either taken no action or are still in the process of rolling out the training programmes and procedures lawyers would recommend to reduce and manage risk."

He went on to add that: "Given the changes coming into effect on 1 May, with the OFT and the UK courts gaining new competences to enforce and apply the EC competition rules, companies should be updating and amending manuals and training materials."

Over 80% of the FTSE 350 businesses polled explained that they would handle an OFT raid with the support of their external legal advisers. However, Mr Davey suggested that this strategy may be flawed, given that:

"The OFT will usually wait 30 minutes to an hour for lawyers to arrive, at least if there is no in-house team, but most respondents told us that their external advisers were between 1 and 2 hours' travelling time away. This is of limited value to companies, and they or their advisors would be well-advised to have someone on standby locally to assist."

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