Dawn Raids at domestic premises for cartel activity

Recent events reported in the media including Operation Aloft, a police investigation into the award of building contracts by Liverpool City Council between 2010 and 2020, which has recently (March 2025) resulted in bribery and misconduct charges against 12 individuals, bring into focus once again the important topic of Dawn Raids and the powers bestowed upon regulators as regards domestic premises.  

In the summer of last year, the Competition and Markets Authority (CMA) won a judicial review challenge in the High Court (Administrative Court) after the Competition Appeal Tribunal (CAT) refused to grant it a domestic search warrant as part of a cartel investigation – R (Competition And Markets Authority) -v- The Competition Appeal Tribunal and others [2024] EWHC 904 (Admin). This is an opportune moment to reflect on that decision.

CMA’s powers to raid premises

To further an investigation under section 25 of the Competition Act 1998 (CA 1998), the CMA can enter any business premises with or without a warrant. They also have the power to enter domestic premises in connection with such an investigation, although only if a warrant has first been obtained.

The CMA’s powers to seek search warrants from the High Court or alternatively the CAT arise under section 27 CA 1998 (business premises entry without a warrant) or sections 28 (business premises with a warrant) and 28A (domestic premises with a warrant) CA 1998. 

The test under section 28 and 28A provides that the relevant court or the CAT (as applicable) may grant a search warrant if it is satisfied that there are reasonable grounds to suspect that there are documents on the premises which the CMA could require the production of by notice (under section 26 of the Competition Act 1998) but ‘if the documents were required to be produced, they would not be produced but would be concealed, removed, tampered with or destroyed’.

Background

In October 2023, the CMA applied for warrants to search business and domestic premises as part of its investigation into suspected anti-competitive conduct regarding the supply of chemical admixtures and additives for use in concrete, cement, mortars and related construction products in the UK. The application was made ex parte and without notice and was the first of its kind. The ongoing investigation concerns suspected infringements of Chapter I CA98 involving a number of suppliers of these chemicals and some industry bodies. The CMA conducted raids to gather evidence as part of its investigation.

While the CAT granted the CMA the warrants authorising it to search 3 business premises it refused the warrant regarding searches at domestic property. The CAT said it was necessary for the CMA to identify specific evidence demonstrating that an occupier of the property had a “propensity” to destroy physical or electronic documents held on their property – as their suspected involvement in a secret cartel was not enough.

Further, the CAT issued guidance in the case to the effect that its judgment was a guideline case to be followed in the future.

Judicial review

The CMA was concerned that the CAT’s decision would damage its ability to gather evidence to effectively investigate and enforce against secret cartels, particularly given the CAT’s indication that this was to be a guideline case, which could be cited before any Court. As such, the CMA applied to the High Court for judicial review in December 2023.

The Administrative Court reviewed the CAT’s decision and agreed with the CMA that the CAT had made an error in its application of the law as to one of the threshold conditions for granting a warrant to search domestic premises, namely that there must be reasonable grounds to suspect that there are documents which, if the CMA required to be produced by notice, would not be produced, but would instead be concealed, removed, tampered with or destroyed. The CAT had held that this condition could never be satisfied by inference from the suspected existence of a secret cartel, despite holding that the identically-worded condition in s.28(1)(b)(ii) for business premises could be satisfied by such an inference. The Administrative Court held that that was an error of law as the condition in s.28A(1)(b)(ii) could, in certain circumstances, be satisfied by inference from suspicion of a secret cartel. 

Interestingly, the Administrative Court also found that the CAT had exceeded its powers by attempting ‘to dictate the status of those judgments in any Court or Tribunal other than the CAT itself’.

Commentary

The decision is topical in the current climate and an interesting one for three reasons:

1. It clearly recognises and supports the CMA’s ability to carry out searches at domestic premises where cartel activity is suspected, recognising the reality of working life nowadays. A spokesperson for the CMA said “With the increase in remote-working – and electronic communication – it’s essential that we are able to search domestic premises to secure evidence of potential breaches of competition law where appropriate to do so.” 

2. The Divisional Court  was not prepared to permit the CAT to dictate the status of its judgment as a guideline judgment applicable in other cases and courts.

3. The CMA accepted that it was correct for domestic premises’ warrants to require a higher order of scrutiny, however it was wrong for this to mean a different interpretation to identically worded provisions. 

In summary, the scope of powers is far reaching and the incentive to exercise them remains.  Businesses and individuals involved with competitive industries and sectors should remain alert to their obligations and be familiar with the scope of the regulator’s powers to raid premises.

For further guidance and support with Dawn Raid risks, including drafting Dawn Raid response policies and staff training, please contact Paul Walsh, Iain Campbell and Moya Clifford.