Collusion: Harsher Sentences for Individuals

A recent decision of the Québec Superior Court in a case related to a price-fixing conspiracy shows that courts will not hesitate to severely punish individuals for violations of the Competition Act (Act), sending a clear message to deter those who might be tempted to distort the rules of free competition.

Background

Following an investigation by the Competition Bureau, criminal charges were laid in June 2008 and July 2010 against 38 individuals and 14 businesses for conspiring to fix the price of gas at the pump in certain municipalities in the province of Québec.

In November 2011, Mr. Donald Darby, owner of two service stations, pleaded guilty of conspiring to fix the price of gas at the pump in the city of Sherbrooke, Québec. Having recorded the guilty plea, the Court had to determine the appropriate sentence to be imposed on the offender. The prosecution had recommended a fine in the amount of $7,500 to $10,000, while the accused sought an unconditional discharge, which means he would be deemed not to have been convicted of the offence. He also offered to donate a minimum of $10,000 to a charity.

Sentencing

With respect to sentencing, the Court noted that two conditions must be met in order to grant an absolute discharge. The Court must be of the view, on the one hand, that a discharge is in the best interests of the accused and, on the other hand, that it is not contrary to the public interest.

In its analysis, the Court reiterated that the punishment must be commensurate with the crime and that public interest considerations include factors such as the objective gravity of the offence, its impact on the community, the need for general deterrence, as well as the importance of maintaining public confidence in the administration of justice. In other words, the likelihood of obtaining a discharge decreases as the seriousness of the crime increases, given that for serious crimes, the objectives of denunciation and deterrence will militate in favour of greater punishment.

Turning next to circumstances specific to the accused, the Court noted that he was not a ring-leader of the conspiracy and did not have a criminal record. The Court also recognized that the accused did not present a risk of re-offending, and therefore a conviction was not necessary to deter him from committing other offences or to ensure his rehabilitation. Finally, the Court noted that the guilty plea saved the judicial system additional costs.

However, emphasizing the need to punish severely those who contravene the Act, the Court refused to grant an absolute discharge and ordered Mr. Darby to pay personally a fine in the amount of $10,000, the maximum penalty recommended by the prosecution. The Court added that the judiciary must ensure that the fine does not amount to "a mere slap on the wrist or a licence" and that the fine imposed must "hurt financially."

The Court made it clear that the accused’s minor involvement in the conspiracy was offset by aggravating factors, such as the objective gravity of the offence, the personal financial gains derived from the operation of his two service stations, as well as the degree of sophistication and scope of the conspiracy. The Court rejected the accused’s argument that the imposition of a sentence would have an adverse effect on his professional activities.

McCarthy Tétrault Notes

This decision of the Québec Superior Court demonstrates that courts will not hesitate to punish severely individuals who engage in economic crimes. The seriousness of this type of offence was also reflected in the 2009 amendments to the Act, which increased the maximum imprisonment term for conspiracy and bid-rigging offences from five to 14 years, making it impossible for an individual who has been found guilty to obtain a discharge. The federal government’s Bill C-10, which proposes to abolish conditional sentences for individuals found guilty of a serious crime, including conspiracy and bid-rigging offences under the Act, is along the same line. Thus, if Bill C-10 is adopted, any individual sentenced to imprisonment under the Act will necessarily serve time in jail.

Authors