OFT to pay £1.2m of contractors' appeal costs

The Office of Fair Trading has been ordered to pay £1.2m in court costs to contractors it accused and fined for bid-rigging in 2009.

The Competition Appeals Tribunal, which earlier this year cut the fines imposed by the OFT on appeal after finding it had wrongly calculated fines and exaggerated the serious of offences, has ordered the regulator to pay appeal costs for nine contractors.

This includes contractor Kier, which will have £200,000 of its £427,113 appeal costs paid, and Sisk, which will have £170,000 of its £559,014 paid.

The Appeals Tribunal found that the contractors awarded costs could be identified as “winners” in their fine appeals, and therefore should have a proportion of their costs paid.

However the Tribunal put a £200,000 “cap” on the costs that could be recovered, and turned down the appeal for costs for two contractors, Quarmby Construction and St James Securities, on the grounds they could not necessarily be identified as winners in their appeals.

The appeals are part of the continuing fall-out from the OFT’s investigation into bid-rigging in the construction industry, which originally imposed fines of £130m on 103 companies after finding them guilty of a variety of offences. Most were accused of “cover-pricing” where fake tenders were submitted for jobs in order to keep a relationship with a client, despite there being no intention of winning the work.

The fines for 25 companies that appealed were cut from £76m to £13m by the Competition Appeals Tribunal.

The nine firms the Tribunal has ordered the OFT to pay costs to are:

• Kier £200,000
• Ballast £200,000
• Bowmer £150,000
• Corringway £170,000
• Thomas Vale £142,129.24
• Sisk £170,000
• Seddon £45,642.35
• Interclass £31,374.96
• Tomlinson £79,872.80

However, the Tribunal said it was “taken aback” by the £1.14m figure Quarmby Construction and St James Securities, the two contractors who failed to win a costs award, had been claiming, labelling it “clearly disproportionate.”