CAT reduces penalties on agencies by 64%

The Competition Appeal Tribunal has reduced the fines imposed on six construction sector recruitment agencies by the OFT for price fixing by 64 per cent.

In a judgment handed down today a £39m fine levied across a total of six agencies was reduced to less than £14m, with the tribunal arguing that the OFT had taken a “mechanistic and artificially narrow formula” in calculating the penalties concerned.

The reductions were as follows:

  • Eden Brown: the original total penalty of £1,072,069 was varied to £477,750. (-55%)
  • CDI AndersElite and CDI Corp: the original total penalty of £7,602,789 was varied to £1,543,500. (-80%)
  • Hays, Hays Specialist Recruitment and Hays Specialist Recruitment (Holdings): the original total penalty of £30,359,129 was varied to £5,880,000. (-81%)

The tribunal ruled that whereas the OFT had determined the penalties on the basis of gross turnover, it should in fact have been a proportion of net fees.

However, it dismissed the challenge to the figure used by the OFT as its starting point that this should be based on 9 per cent of relevant turnover.

This follows recent news that the CAT has reduced fines imposed by the OFT on a number of construction companies for cover pricing by up to 94 per cent.

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