An internal review of the Office of Fair Trading’s price-fixing case against four British Airways executives has found that weak investigation processes and flawed management oversight were to blame for the failure of the case.
The case was brought by the OFT after Virgin Atlantic admitted that it had conspired with BA to fix passenger fuel surcharges between 2004 and 2006. The case collapsed when the defence successfully argued that one of the 70,000 Virgin e-mails submitted to the court contradicted part of the prosecution’s case. The review found that the OFT should have seized or copied those e-mails at the outset, instead of simply requiring them to be produced. The prosecution was therefore forced to negotiate with IT contractors instructed by lawyers acting for each airline, which put the OFT in a “difficult position and contributed to the failure to identify a large number of missing documents from the e-mail account of a key Virgin Atlantic witness”, it said.
The review also found that John Fingleton, the OFT chief executive, was right to recuse himself from the case because of his friendship with BA head Willie Walsh but the decision led to oversight problems with senior managers failing to challenge key aspects of the case.
The OFT was cleared of carelessness and ruled that the collapse of the case was caused by “a highly unusual combination of factors” and the errors that had been made essentially related to “process weaknesses” within the organisation.
“The OFT had made mistakes but no indication was found that anyone at the OFT had been negligent or that the OFT did not have the capability to pursue a complex criminal case,” the review said. “The issues identified essentially relate to the processes used in the case.”