D-Day beckons for OFT appeal

Dozens of construction companies that have succeeded in having fines imposed by the OFT reduced by up to 94% could find out on 1 May whether the OFT is likely to mount an appeal of its own.

The OFT must decide by 1 May whether it wants to appeal a Competition Appeal Tribunal (CAT) decision to reduce the fines it levied on six construction recruitment agencies accused of price fixing. This could see it declare its hand on how it will proceed with the construction companies.

However, the OFT has until the last of the three remaining judgments are handed down to AH Willis and Sons, GMI Construction and North Midland Construction to consider its course of action. No date has been set for the outcome of these three appeals, meaning that construction companies eager to put the cover pricing issue behind them are faced with ongoing uncertainty.

“The OFT is being very tight-lipped on how it is likely to proceed on the construction companies,” said Pinsent Masons partner Alan Davis, who managed to secure an 83% fine reduction for his client Galliford Try in its appeal of the OFT fine. “But on the recruitment agencies it has until 1 May. This will be an indication of the line it is likely to take on other appeals - they will have to show their hand.”

A total of 25 appeals were made to the CAT after the OFT imposed fines of £129m on 103 companies for bid-rigging. In the 22 judgments handed down so far, the total amount of penalties levied has been cut from £76m to £13m. The largest percentage reductions were awarded to Ballast Nedam and John Sisk, whose penalties were cut by 94%.

In these and other judgments, the CAT judges found that the OFT acted in a “disproportionate” and “excessive” manner when calculating fines and that it erred when working out the baseline for the fines.

Six appeals contested liability as well as the penalties but only one of these - Durkan - was partially successful on this point.

But Davis did not think that any conclusions could be drawn from this on how the CAT is likely to rule in the remaining three appeals - all of which involve the companies contesting liability.

“It’s very fact specific,” he said. “You can see that the tribunal has looked at the specifics of each case, which is what the appellants wanted them to do.”

A spokesperson for the OFT gave little away about its future tactics, but pointed out that on 15 April the CAT upheld the OFT’s decision that Crest Nicholson/ISG Pearce and Quarmby Construction/St James Securities Holdings were still liable.

“We will consider these judgments in detail, alongside those in all other construction appeals, and will then decide whether to appeal.

 “Two of [15 April’s] judgments involved appeals over the companies’ liability for the infringements as well as the level of their penalty, and in each case the OFT’s decisions on liability were upheld,” the spokesperson said.