Alison McKee
Alison McKee

Articles From the Team

The personal price of non-compliance

Keith Packer is 6’1” and has blue eyes.  Whilst it’s likely I would’ve guessed this as he stood in front of me and a room full of lawyers at the 'In Conversation with Keith Packer' event at Shoosmiths’s new Manchester office last week, I came to know of these details from the Pensacola Federal Prison Camp inmate card shown on the screen behind him.

How did Keith Packer end up in prison?

Keith was the General Commercial Manager for British Airways Cargo. He loved his job and was responsible for an international team of 200 staff.  A father of two, he’d never been in trouble before.  That was until the dawn raid in 2006 – at British Airways Offices, Heathrow Airport – looking for evidence of price-fixing and anti-competitive behaviour.  Keith was working from home and was called into the office.  As he arrived that morning he realised that he, personally, was under investigation.  He describes the office as “a scene of confusion.” 

Paying a high personal price

Keith’s Global Pricing Manager had received information on an airline competitor’s plans (in terms of the fuel surcharge applied to all commercial flights). The information didn’t change the direction taken by British Airways, but Keith had accepted the information without checking the source and in doing so had fallen foul of competition law. Eventually, Lufthansa blew the whistle and 11 airlines were subsequently implicated.  Keith was one of four executives to pay a – very high – personal price. 

Competition law and compliance

He believes he was used as a ‘deterrent’ to other executives.  Corporate fines don’t do enough to dissuade companies from breaching these regulations so personal sanctions are used in order to ensure compliance.  Keith recounts a training session on the subject of competition law and compliance, in which he stood at the back of the room thinking about other aspects of his busy day.  After telling his family he was going to prison in a different country, he wished he’d paid closer attention.

An in-house lawyer’s role

It’s the job of an in-house lawyer to manage this risk and engage the rest of an organisation on the subject of compliance.  It’s becoming a bigger part of the role that shows no sign of changing.  One of the delegates at the Shoosmiths talk asked Keith how to best relay the message. With a rye smile, he commented it’s about impressing the very real personal risk; a risk that cost Keith 8 months of his freedom. 

I confess: I was unaware of the personal sanctions and wide-ranging powers wielded by the Competition and Markets Authority. Their CEO, Andrea Coscelli, recently expressed the intention to step closer to regional businesses with a new office in Manchester.  It’s evident that the need to be in front of regulatory responsibility is as high as ever.

So how can an in-house lawyer get this message through to their staff: the importance of competition law compliance? Telling Keith’s story is a good place to start.

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