Estate agency directors are disqualified over cartels...

Two estate agency directors have been disqualified over a cartel scandal which resulted in five agencies being fined over £370,000 for secretly agreeing fees to be charged to vendors.

David Baker and Julian Frost were, at the time, both directors of Abbott and Frost Estate Agents Ltd in Burnham-on-Sea.

This was one of a group of estate agents who agreed to fix their minimum commission rates at 1.5 per cent.

During the investigation, the Competition and Markets Authority identified that a number of directors were actively involved in the cartel or were aware of it and failed to take any steps to stop it.

The CMA secured legally binding undertakings from two of these directors – Baker and Frost – which have the effect of disqualifying them as directors and preventing them from being involved from being a director of any UK company.

Baker has been disqualified for three and a half years and Frost for three years.

The CMA says it is continuing to investigate whether to seek the disqualification of other directors of companies involved in the deal.

In May last year the CMA imposed fines totalling £370,084 on five of the six agents involved in the cartel scandal - the sixth was granted immunity as part of a leniency agreement as they were the first to report the cartel to the CMA.

Under the Company Directors Disqualification Act of 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 if a company of which he or she is a director has breached competition law.

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.

Last month the CMA revealed that it was investigating a suspect infringement of the Competition Act 1998 by estate agents.

The results are expected later in the year but the investigation was prompted by the same Burnham on Sea estate agency case.

"This case is at an early stage and no assumption should be made that the CA98 has been infringed. The CMA has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections to any of the parties under investigation. Not all cases result in the CMA issuing a statement of objections” the authority stated when making last month’s announcement.