Following a five year investigation into the construction industry, the OFT imposed financial penalties totalling £129.2 million on 103 construction companies for having engaged in cover pricing. The Decision is the longest ever taken by the OFT running to nearly 2000 pages. Twenty five companies appealed to the Competition Appeal Tribunal. Six appealed both liability and penalty and the remainder appealed in relation to penalty only.
The Tribunal has delivered its first judgment in the appeals covering six appeals on 11 March 2011. The Tribunal found that the starting point of a penalty of 5% of relevant turnover imposed by the OFT was too high and substituted one of 3.5%. It further found that the OFT was wrong to take as the relevant year the year before the Decision but rather should have taken the year preceding the date when the infringement came to an end. It also found that the OFT’s calculation of a Minimum Deterrence Threshold (MDT) based on the worldwide turnover of the undertaking was unfair and unlawful; the MDT was applied mechanistically and without proper and case by case consideration of all relevant factors. As a result the Tribunal imposed very significant reductions in penalties.
Ballast Nedam N.V. & Others v Office of Fair Trading  CAT 3
Christopher Vajda QC and Ronit Kreisberger (instructed by CMS Cameron McKenna) appeared on behalf of the Appellant, Ballast Nedam N.V. Its fine was reduced from £8,333,116 to £534,375.
Paul Harris (instructed by Nabarro LLP) appeared on behalf of the Appellant, Corringway Conclusions plc. Its fine was reduced from £769,592 to £119,344.
David Unterhalter SC and Alan Bates (instructed by the General Counsel, Office of Fair Trading) appeared on behalf of the Respondent.
Galliford Try Plc & Others v Office of Fair Trading  CAT 7
John Swift QC and Kassie Smith (instructed by Pinsent Masons LLP) appeared on behalf of the Galliford Try Plc. It’s fine was reduced from £11,111,105 to £1,395,000.
David Unterhalter SC and Philip Woolfe (instructed by the General Counsel, Office of Fair Trading) appeared on behalf of the Respondent.