CMA fines businesses and individuals over dawn raid conduct

Alex Stratakis and Giles Warrington, competition law experts at Pinsent Masons, were commenting after the CMA imposed £50,000 in penalties on construction company M&J Group and two of its employees for concealing evidence during an unannounced inspection – a ‘dawn raid’ – by CMA staff. The fines comprised £25,000 imposed on M&J; £20,000 on the company’s estimating director, Barry Pirrie; and £5,000 on its office manager, Tracey Woods.

Stratakis said: “This is an important reminder that dawn raid preparedness should not be treated simply as an issue for the legal team. Employees across a business, and particularly directors or senior management, HR, reception staff, IT personnel and senior salespeople, need to know exactly what to do and what not to do, understand the consequences of their actions or omissions and be in constant communication with the legal team and external advisors.”

“The present case concerns conduct that occurred before the Digital Markets, Competition and Consumers Act 2024 (DMCCA) came into force and the maximum civil fines for failing to comply with CMA investigatory powers – including hindering dawn raids – were capped at £30,000 fixed-amount and £15,000 daily fines, respectively, for both companies and individuals.”

“From 1 January 2025, however, the DMCCA increased the maximum fines for businesses, up to 1% of an undertaking’s annual turnover, or up to 5% of the undertaking’s daily turnover, or a combination of both, which can lead to companies facing substantially higher penalties in future cases,” he said.

According to the CMA, this is the first time the authority has imposed civil penalties on individuals for concealing evidence during an investigation, demonstrating the potential personal consequences of non-compliance with the CMA’s investigatory powers.

Warrington said: “What distinguishes this latest case is the CMA's decision to impose separate penalties on the individuals involved alongside the corporate penalty. The CMA made clear that imposing such penalties is intended to signal that it is prepared to hold individuals personally accountable where they fail to comply with investigatory requirements.”

“The CMA has long had the power to fine individuals as well as businesses for obstructing dawn raids – and the DMCCA did not change the maximum civil fines that individuals can face – but it previously only fined companies. The CMA’s apparent newfound willingness to fine individuals will understandably raise concerns for businesses and their staff.”

The conduct in this case arose during a CMA inspection of M&J’s premises in December 2024, carried out under a warrant issued by the Competition Appeal Tribunal. The investigation formed part of the CMA’s ongoing investigation into suspected bid-rigging in the supply of roofing and other construction services. No conclusion has yet been reached as to whether competition law has been infringed.

In imposing the fines, the CMA found that, despite instructions that employees must not conceal or destroy evidence, obstruct investigations or provide false or misleading information, Pirrie instructed Woods to remove a work mobile phone and hard copy documents from the premises so that they would not be found by the CMA. The CMA also found that Pirrie twice told its officers that he did not have a work mobile phone.

The materials were ultimately returned to the CMA later that day. However, the CMA rejected the suggestion that their relatively prompt return meant that the conduct did not merit a penalty. It considered that taking relevant evidence outside its control created a risk that evidence could be lost and diverted investigators’ time and resources from the inspection itself.

Although M&J had engaged external legal advisers promptly and sent an all-staff email expressly instructing employees not to conceal, delete or destroy documents, the CMA found that it had not taken adequate steps to ensure compliance. In particular, the CMA considered that management had not exercised sufficient oversight of the premises, secured relevant files or sufficiently supervised the senior employee involved.

The decision builds on the CMA’s previous enforcement against companies for interference with inspections. In 2019, the CMA fined Fender Musical Instruments Europe Limited £25,000 after documents were removed from Fender’s premises during a dawn raid. The CMA's M&J decision expressly considered the Fender precedent and reiterated its view that concealment of relevant documents during an inspection is a serious form of non-compliance.

Warrington said: “The penalty decision also illustrates how obstruction can change the dynamics of an investigation. Even where evidence is recovered and the underlying investigation is not materially delayed, the CMA takes the view that suspected concealment can divert investigators' attention and resources. It is also likely to place the company and individuals concerned on an adverse footing with the regulator.”

The CMA expressly regarded Pirrie’s seniority, as M&J’s estimating director, as an aggravating factor, noting its view that senior officers have a responsibility to establish a culture of compliance with competition law and with lawful investigatory requirements.

Stratakis said: “Failure to cooperate properly with a dawn raid can create significant financial and reputational consequences for businesses and individuals alike, independent of the outcome of the underlying competition investigation.”

“Where the CMA does subsequently establish an underlying competition law infringement, individuals may also face director disqualification proceedings over their involvement in such breaches. In addition, implicated individuals may face dismissal or other disciplinary action that may impact their future professional careers,” he said.