CAT Cuts Construction Recruitment Penalties
The Competition Appeal Tribunal has allowed in large part the appeals of 3 undertakings against the penalties imposed by the OFT in relation to the construction recruitment cartel.
The OFT fined 7 construction recruitment agencies for engaging in a collective boycott of an intermediary for the supply of candidates to construction companies in the UK and price-fixing. The OFT imposed fines totaling over £40 million.
3 recruitment agencies appealed the amounts of their fines: Eden Brown, CDI and Hays.
The Tribunal gave detailed consideration to several aspects of the Penalties Guidance used by the OFT when calculating fines and to the OFT’s approach to the MDT. The Tribunal held that the OFT was wrong (i) to calculate the penalties by reference to the agencies’ gross turnover rather than net turnover representing the commission earned on placements and (ii) to calculate the MDT by reference to worldwide turnover only, which resulted in disproportionate penalties. The Tribunal carried out its own assessment to re-calculate the Appellants’ fines, including their respective leniency reductions.
The total amount of the fines imposed on Appellants was reduced by over £30 million.
David Unterhalter SC and Alan Bates represented the Office of Fair Trading.
Paul Harris QC represented Eden Brown Limited and Hays plc, Hays Specialist Recruitment Limited and Hays Specialist Recruitment (Holdings) Limited.
Ronit Kreisberger and Owain Draper represented CDI AndersElite Limited and CDI Corp.