William Morrisons Supermarkets are to sue the ex-chairman and ten other ex-employees of it's Safeway Stores Ltd subsidiary in a ground breaking court case.Morrisons, the UK's fourth biggest supermarket chain, took over Safeway in March 2004.Â Since then Safeway has been investigated, along with other supermarkets and dairy companies, by the Office of Fair Trading (OFT).Â They have been accused of running a 'price fixing' cartel on various dairy products, keeping prices artificially high.Â Safeway faces a fine of over Â£16 million, which is to be reduced to Â£11 million after the company co-operated with the investigation.Â Morrisons were not part of the price fixing activity.
Morrisons instigated legal proceedings against the former chairman of Safeway, David Webster, and ten other employees of the defunct supermarket chain claiming damages and compensation.Â The Bradford based chain allege the ex-employees were responsible for the illegal anti-competitive activityÂ The lawsuit is a first in the UK by a company against former employees and the result will no doubt set a precedent for any other in the future.
David Webster, currently the chairman of InterContinental Hotels, and the others attempted to have the case against them thrown out by the High Court.Â The defendants argued that the case breached a basic legal principle, 'ex turpi causa', (someone who does something unlawful cannot sue someone else for the consequences of that action). Â The attempt failed as the court said that as Safeway (Morrisons) has a prospect of rebutting the defendants key arguments the case should go ahead.
Mr Webster has vowed to 'vigorously defend' the action against him and has expressed 'astonishment' at receiving the claim.
Although in it's preliminary stage, the case is being watched closely by competion law and employment law experts.