Safeway’s legal action against ex-directors and employees stands real prospects of success, rules High Court – Safeway v Twigger, High Court

The High Court has given Safeway the go-ahead to continue its legal action against its ex-directors and employees for alleged breaches of competition law. The Office of Fair Trading believes that some supermarkets had been colluding with dairy businesses over prices. Safeway faces a multi-million pound fine for the actions of some of its staff, who have since left. Safeway has taken the novel step of suing those ex-directors and employees for its losses caused by the alleged competition law breach. Safeway says that those people were responsible for their infringing behaviour in breach of their legal duties to their employer.

The ex-directors and employees applied to have the case thrown out on the basis that it was not possible for an employer to bring a competition law case against their directors or employees, and also that it would offend a legal principle by which someone who does something unlawful (ie Safeway) could not sue another person (ie the staff) for the consequences of that unlawful action. The High Court has thrown out the ex-directors’ and employees’ application, and ruled that Safeway had a ‘real prospect of success’ at trial.  

Paul Gershlick, a Partner a Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘This case does not mean that Safeway has won. However, it means that Safeway has a real chance of succeeding at the main trial. Safeway’s claim is more than just frivolous.’