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23/11/2009
OFT Fines To Be Appealed
UK construction companies previously fined by the Office of Fair Trading (OFT) for illegally rigging tenders for building contracts are set to challenge the regulator's decision in court.
The OFT handed out fines totalling almost £130m in September after one of the biggest competition inquiries in Britain uncovered widespread bid-rigging on projects including schools and hospitals.
Lawyers involved in the case said that as many as 30 of the 103 companies that received fines would contest them.
It would be an unprecedented number of appeals in a competition case, the lawyers said.
One listed construction company, which received the biggest fine of £17.9 million, lodged an appeal at the Competition Appeal Tribunal on November 10 and others are expected to follow this week.
Their challenges will focus on the methods used by the OFT to calculate fines against individual companies.
Overall, the regulator imposed fines amounting to slightly more than 1% of the construction groups' collective turnover, but some received proportionately higher fines than others.
Just days ago, the OFT published its full decision, including details of the evidence against each company.
It said that 86 of the 106 companies that had been fined had received a reduction in penalty because they had co-operated with the investigation. Nine companies that were named initially were let off for lack of evidence.
The OFT began its investigation in 2004 after a complaint by a council in the East Midlands and quickly found that the practice was common across the industry.
A sweeping five-year investigation uncovered evidence that thousands of tenders had been distorted by collusion, affecting the construction of projects such as a diabetes clinic in Birmingham and a leisure complex in Lincolnshire.
(BMcC/KMcA)
The OFT handed out fines totalling almost £130m in September after one of the biggest competition inquiries in Britain uncovered widespread bid-rigging on projects including schools and hospitals.
Lawyers involved in the case said that as many as 30 of the 103 companies that received fines would contest them.
It would be an unprecedented number of appeals in a competition case, the lawyers said.
One listed construction company, which received the biggest fine of £17.9 million, lodged an appeal at the Competition Appeal Tribunal on November 10 and others are expected to follow this week.
Their challenges will focus on the methods used by the OFT to calculate fines against individual companies.
Overall, the regulator imposed fines amounting to slightly more than 1% of the construction groups' collective turnover, but some received proportionately higher fines than others.
Just days ago, the OFT published its full decision, including details of the evidence against each company.
It said that 86 of the 106 companies that had been fined had received a reduction in penalty because they had co-operated with the investigation. Nine companies that were named initially were let off for lack of evidence.
The OFT began its investigation in 2004 after a complaint by a council in the East Midlands and quickly found that the practice was common across the industry.
A sweeping five-year investigation uncovered evidence that thousands of tenders had been distorted by collusion, affecting the construction of projects such as a diabetes clinic in Birmingham and a leisure complex in Lincolnshire.
(BMcC/KMcA)
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