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Earlier this week the Court of Appeal ruled in Safeway Stores Ltd & Ors v Twigger & Ors that a £16 million fine imposed on Safeway (which is now owned by Morrisons) cannot be recovered from the ex-employees who were responsible for incurring the fine. The background to this case starts in 2005 when the Office of Fair Trading launched an enquiry into a potential competition law infringement. It was alleged that supermarkets were price fixing milk and dairy products with farmers. Safeway were one of the main supermarkets involved. They admitted that they had infringed UK competition law by disclosing commercially sensitive retail pricing information that should have remained confidential. The Office of Fair Trading fined Safeway just over £16 million pounds for their anti-competitive behaviour. In January 2009 the High Court ruled that Safeway had a real possibly of successfully recovering the monies from the negligent employees. The employees appealed against this and the Court of Appeal decided that a company who has been fined for breaching competition law cannot recover the fine from its employees and directors. This means that the principle that a company cannot recover damages from their own criminal acts still applies. Even though the decision went in the employee's favour this case highlights the importance of companies having adequate insurance protection to cover their directors when things go wrong. At present there is a growing trend for employers to take out D&O ("directors and officers") insurance. D&O policies protect directors and officers against significant personal liabilities which may arise as a result of their breach of duty or negligence. Having policies like this in place will help employers attract the best talent into their organisation since senior employees are increasingly aware of the risks associated with holding a senior position. Trethowans Employment Team is made up of specialist employment solicitors. Adopting a practical approach to the law, our team of employment solicitors work closely with employers to deal with issues as quickly and as painlessly as possible. We are always looking to help you get the problem resolved with the minimum of hassle.
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