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OFT won't appeal cover pricing fine cuts

The cover pricing saga looks finally to have come to an end after the Office of Fair Trading confirmed it would not seek to appeal the fine reductions ordered by the Competition Appeals Tribunal.

The OFT’s decision not to pursue the case against 25 construction firms - whose fines were reduced by as much as 90 per cent – comes after an earlier announcement against appealing the judgment in the construction recruitment case.

It should spell the end of a tumultuous period for those involved, which began with an investigation in 2004.

In September 2009, 103 firms including Kier, Galliford Try and Apollo were fined a total of £129.5m.

Those fines were eventually ruled excessive by the CAT in March this year, as a succession of appeals saw the level of many firms’ penalties tumble.

Kier Group and Kier Regional were among the first to hear and enjoyed the largest reduction, as their £17.89m fine was cut to just £1.7m. They were among 25 companies that appealed, all of whom were successful in getting their fines reduced.

Four parties also won on the grounds of liability and saw their cases completely overturned.

In a statement, the OFT said its decision not to appeal the reductions was influenced by the fact that “substantial deterrence and change has already been achieved”.

It said: “While the OFT has concerns with aspects of the judgments, including the substantial fine reductions made by the CAT, it does not believe its ability to impose substantial fines in the future and at levels sufficient to achieve effective deterrence is undermined. 

“For this and other reasons, it does not believe that appeals to the Court of Appeal would represent the best use of public funds. 

“Instead, it will press ahead with continued vigorous enforcement of the Competition Act.”

The body also confirmed it would review its penalty setting policy in light of the judgments.


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