Law Report: No liability for contempt: Re Supply of Ready Mixed Concrete Court of Appeal (Lord Justice Russell, Lord Justice Hirst and Lord Justice Rose), 25 June 1993

An employer, who clearly and unequivocally prohibits his employee from entering into an agreement which unlawfully restricts competition, does not become a party to an unlawful agreement entered into by the employee in disobedience of the employer's prohibition.

The Court of Appeal set aside orders by the Restrictive Practices Court that the appellants, Ready Mixed Concrete (Thames Valley) Ltd and Pioneer Concrete (UK) Ltd, were in contempt of court.

In 1978 the appellants, companies involved nationwide in the production, sale and distribution of ready mixed concrete, were restrained by injunctions from enforcing agreements which were restrictive of competition in contravention of section 35(1) of the Restrictive Trade Practices Act 1976. The appellants issued instructions to their employees not to make any arrangements contrary to the 1976 Act.

In 1983 some employees from the appellant companies chose to ignore the instructions and attended meetings with representatives from two other companies also subject to the injunctions. They made an agreement for the future allocation between themselves of opportunities to supply ready mixed concrete.

The Director General of Fair Trading sought sequestration orders against the appellants and the two other companies for breach of the injunctions. In 1990 the appellants, on the advice of leading counsel, did not resist the charges of contempt and were fined by the Restrictive Practices Court. However the other two companies successfully contested the charges of contempt in the Court of Appeal: Director General of Fair Trading v Smiths Concrete Ltd (1992) 1 QB 213; the Independent, 2 August 1991.

The appellants reconsidered their positions and were granted extensions to appeal out of time.

Stewart Boyd QC and Paul Smith (Linklaters & Paines) for Ready Made Concrete; Michael Crystal QC and Christopher Vajda (Clifford Chance) for Pioneer; Stephen Richards and Christopher Katkowski (Treasury Solicitor) for the Director General of Fair Trading.

LORD JUSTICE RUSSELL, giving the court's judgment, said that although there was a 'plea of guilty' in the court below, the appeal should be permitted to proceed for that course was not only in the interests of the appellants but in the interests of justice as well. Counsels' erroneous advice was not on any periphereal issue but at the very heart of the proceedings. The advice was 'reasonable at the time' and the mistake was shared not only by the Restrictive Practices Court but by the Director and his legal team.

Mr Richards argued that employers could become parties to an unlawful arrangement if they did not take reasonable steps to prevent their employees entering into arrangements and those reasonable steps went beyond prohibition and required employers to monitor the activities of their workforce, properly to educate their workforce and to maintain a system which secured the effective working of the statute and prevented abuses of it.

In the court's judgment, an employer did not become party to an agreement or arrangement if he prohibited his employee from entering into it, provided that the prohibition was in clear and unequivocal terms and was in no sense a sham. If the employee then chose to enter into an agreement or arrangement contrary to the instructions, then the employer did not become a party to the agreement or arrangement in the absence of the employee being cloaked in ostensible authority. With individual employees the degree of emphasis to bring home the prohibition might vary. But the test was not subject to the gloss that the employer was bound, despite the prohibition, if he had failed to take further steps to prevent the agreement or arrangement being concluded or implemented.

It was the prohibition, and the prohibition alone, which took the employer outside the agreement or arrangement. The adequacy of the steps to be taken might vary from employee to employee dependent on the likely response, but the adequacy of those steps was no more than evidence of the quality of the prohibition. They were not in themselves features which rendered the employer a party or not a party to the agreement or arrangement.

There was no hint that either appellant should have suspected that their employees were likely to disobey instructions.

The court did not accept that on a retrial the Director General of Fair Trading could realistically entertain any hope of demonstrating that the appellants were parties to the arrangements. The appeals would be allowed.

Start your day with The Independent, sign up for daily news emails
Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Life and Style
tech
Sport
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Helpdesk Analyst

£25000 per annum: Ashdown Group: An established media firm based in Surrey is ...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Head of Finance - Financial Director - London - £70,000

£70000 per annum: Ashdown Group: Head of Finance - Financial Controller - Fina...

Recruitment Genius: Business Development Executive - Nationwide - OTE £65,000

£30000 - £65000 per annum: Recruitment Genius: This small technology business ...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum