CAT demolishes OFT’s fines against construction companies

The Competition Appeal Tribunal (CAT) has ordered the OFT to reduce fines imposed against six construction companies found to have breached price-fixing rules.

Paul Harris
Paul Harris

In September 2009 103 construction companies were found to have participated in the price-fixing scam, with the OFT issuing penalties totalling £129.5m against them.

The OFT found that between 2000 and 2006 the appellants had breached competition law by practising cover pricing, a process that involves deliberately submitting higher tenders with the aim of remaining on the client’s tender list for future contracts instead of winning the contract being tendered.

The appellants had ­conceded taking part in the price-fixing, but argued that the fines were too high because the practice had been considered legitimate at the time.
The CAT agreed that the fine was “excessive”. It ruled that imposing a fine of 5 per cent of overall turnover was too high given the nature of the offence and that companies that commit the most heinous crimes are fined 10 per cent of turnover.

Twenty five of the ­companies appealed to the CAT to have the fines reduced and earlier this month the tribunal ruled that in six of the appeals the fines should be reduced. Ruling is still pending in the remaining 19 matters.

Kier Group and Kier Regional were originally fined £17.9m by the OFT. Brick Court Chambers’ Mark Brealey QC led the appeal for the group, which saw the figure reduced to £1.7m.
Ballast Nedam, represented by Monckton Chambers’ Christopher Vajda QC, had its fine reduced to £534,000 from £8.3m.

One Essex Court’s Thomas Sharpe QC ­represented Bowmer & Kirkland and B&K Property Services, which had their fine reduced from £7.5m to £1.5m.

Sharpe also represented Sicon and John Sisk & Son, which had their fine reduced from £6.1m to £356,250.

Monckton’s Paul Harris, who was awarded silk earlier this month, represented ­Ballast Nedam, which had its fine slashed from £8.3m to £534,375.

Wragge & Co partner Bernardine Adkins ­represented Thomas Vale Holdings and Thomas Vale Construction, which had their penalty cut from £1m to £171,000.

The OFT was represented