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OFT FINES: Nine more firms’ fines slashed

The bulk of the remaining contractors appealing their OFT fines for cover pricing today had their penalties slashed, meaning that 22 out of the 25 firms that appealed have now escaped with more lenient punishments.

Nine contractors on Friday morning had judgements on their appeals handed down by the Competition Appeal Tribunal. The firms and their fine reductions are as follows:

  • Crest Nicholson – reduced from £5,188,846 to £950,000
  • ISG Pearce – as above*
  • Quarmby Construction - reduced from £881,749 to £213,750
  • Barrett Estate Services – reduced from £530,238 to £169,575
  • GAJ Construction – reduced from £109,683 to £42,750
  • Allenbuild – reduced from £3,547,931 to £926,250
  • Robert Woodhead Limited – reduced from £411,595 to £151,725
  • J H Hallam – reduced from £359,588 to £99,000
  • Hobson and Porter –reduced from £547,507 to £123,750

*Crest Nicholson and ISG Pearce were jointly appealing the fine given to Pearce Construction (Midlands), formerly owned by Crest Nicholson, and now owned by ISG.

Only three firms have now yet to have a judgment made on their fine appeals: North Midland Construction, AH Willis and Sons and GMI Construction.

As with today’s nine firms, the expectation is that these remaining firms will also see their fines slashed.

The tribunal again criticised the OFT’s calculation of fines in its cover pricing investigation. The Office of Fair Trading fined 103 construction companies a total of £129.5m in September 2009, but the tribunal has consistently found that the level of fines were excessive and disproportionate.

As with previous appeals, the tribunal today said that the figure of 5 per cent of turnover in the relevant market, adopted by the OFT when deciding the appropriate amount of the penalties, was too high where the maximum for the most heinous infringements was 10 per cent.

It said the OFT’s decision to measure “relevant turnover” from the last business year prior to the decision was incorrect and it should have measured it from the year preceding the date when the infringement came to an end.

And it found that the minimum deterrent threshold used by the OFT gave rise to penalties which were “excessive and disproportionate”.

Readers' comments (1)

  • While the contractors subby bash!!!!
    Just more encouragment to say that bad behaviour pays

    Unsuitable or offensive? Report this comment

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