Safeway Stores Ltd and Others v Twigger and Others: CA 21 Dec 2010

The court was asked whether, when a company had been fined for anti-competitive practices, the company could then recover the penalties from the directors and senior employees involved.
Held: The undertaking was not entitled to recover the amount of such penalties from its directors or employees who are themselves responsible for the infringement.
Longmore LJ considered the application of the maxim ‘ex turpi causa non oritur actio’, saying: ‘The modern law has now culminated in Gray v Thames Trains Ltd [2009] UKHL 33 . . when Lord Hoffmann said that it expressed not so much a principle as a policy and that it was a rule which may be stated in a narrower form and a wider form. In its narrower form it is that a claimant cannot recover for damage which is the consequence of a sentence imposed upon him for a criminal act; in its wider version it is that a claimant may not recover for damage which is the consequence of his own criminal act. Both versions of the rule are often in play as they are in the present case because it is said that recovery of the penalty likely to be imposed by the OFT is recovery for the consequence of a sentence for the criminal (or quasi-criminal) act of entering into an illegal agreement, whereas recovery of the costs of the OFT investigation is recovery for the consequences of making the illegal agreement. The main difference between the application of the two forms of the rule appears to be that there is no question of any causation problem in the application of the narrower version whereas difficult problems of causation may (in theory) arise if it is only the broader version of the rule on which reliance can be placed (para 51). The rationale of the maxim is the need for the criminal courts and the civil courts to speak with a consistent voice. It would be inconsistent for a claimant to be criminally and personally liable (or liable to pay penalties to a regulator such as the OFT) but for the same claimant to say to a civil court that he is not personally answerable for that conduct.’
Lloyd LJ said: ‘It follows that the ex turpi causa principle does apply to preclude the claimants from seeking to recover from the defendants either the amount of the eventual penalty (under the narrow version of the principle) or the costs of coping with the OFT investigation (under the wider version).’
Longmore LJ, Lloyd LJ, Poill LJ
[2011] 1 CLC 80, [2010] EWCA Civ 1472, [2011] 2 All ER 841, [2011] 1 Lloyd’s Rep 462, [2011] UKCLR 339
Competition Act 1998
England and Wales
Appeal fromSafeway Stores Ltd and Others v Twigger and Others ComC 15-Jan-2010
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Cited by:
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These lists may be incomplete.
Updated: 03 March 2021; Ref: scu.427375