By Ashley Young
The Competition Market Authority has banned the directors of two Estate agents, after they were found to have breached competition law.
Stephen Jones and Neil Mackenzie were directors at estate agents Richard Worth and Michael Hardy, respectively, from September 2008 to May 2015. During this time, their firms took part in a cartel with 2 other local estate agents in which they conspired together to set minimum rates for commission on the sale of residential properties in Wokingham, Winnersh, Crowthorne, Bracknell and Warfield – where they were the leading estate agents at that time.
Both dirctors have now been disqualified for 6 and a half years for their roles in the cartel, meaning they cannot act as directors of any companies or be involved in the management of any company based in England, Scotland or Wales during this time.
This is not the first time the Competition Market Authourity(CMA) has had to ban the directors of an Estate Agents for breaching competition rules. former In April 2018, director of estate agency Abbott and Frost Estate Agents Limited (Abbott and Frost), was given a disqualification undertaking not to act as a director of a company for 3 years and 6 months.
Under the Company Directors Disqualification Act 1986, the CMA has the power to apply to the court for an order disqualifying a director from holding company directorships or performing certain roles in relation to a company for a specified period. These powers are applicable where a company of which he or she is a director has breached competition law and their conduct makes them unfit to be a director or be involved in the management of a company.
The Act also allows the CMA to accept a disqualification undertaking from a director instead of bringing proceedings. A disqualification undertaking has the same legal effect as a disqualification order.
The move follows a Competition and Markets Authority (CMA) investigation into the cartel, which found that the 4 estate agents maintained the illegal activity for almost 7 years. They exchanged confidential information on pricing and held meetings to make sure all members of the cartel enforced and maintained the agreed minimum rates.
This meant that homeowners in the affected areas were denied the chance of securing the best possible deal when selling their property because they were unable to meaningfully shop around all their local estate agents for a better commission rate.
The CMA is also currently seeking director disqualifications in 2 further separate proceedings before the court. One in relation to its probe into Residential estate agency services in the Burnham-on-Sea area, and one in relation to its Supply of precast concrete drainage products: civil investigation.