The 112 firms accused of bid-rigging and cover pricing in the latest Office of Fair Trading (OFT) investigation may not be the only ones facing legal action, it emerged last month.

A leading lawyer revealed that he had been asked by councils and housing associations to investigate other possible abuses of competition law by contractors not named in the inquiry in light of the OFT investigation.

‘The question is whether the OFT findings represent the tip of the iceberg,’ said David Greene, head of litigation at Edwin Coe, the lawyer behind the Northern Rock and Railtrack action cases.

‘We are examining other tenders at the moment, a wider field than the OFT’s work... We are talking about potentially huge figures that are subject to anti-competitive practice,’ he said.

The news came after US law firm Cohen, Milstein, Hausfeld & Toll (CMHT) announced it was offering services to clients and councils that suffered as a result of bid rigging an indication that on top of large fines from the OFT, guilty contractors can expect to be hit by hefty compensation claims.

Scott Campbell, an associate at the CMHT’s London office advised clients to form class action suits against any firms found guilty, a move discouraged by Peter Cunningham, chief executive of Constructing Excellence’s Construction Clients Group who instead urged clients to change procurement systems to drive out illegal activity.

The client backlash is in full flow. Several local authorities have demanded assurances that their supply chains are not involved in bid rigging. Councils in Manchester, the Midlands and Surrey are thought to have sent letters to contractors asking them to confirm in writing that they are not guilty. Private client Sainsbury’s also contacted firms in its supply chain asking for assurances that bid rigging has been stamped out, no doubt wary after recently being accused by the OFT of fixing tobacco prices.

It also emerged that the nine companies being investigated for the most serious offence of making or receiving compensation payments for losing bids include three large firms: Mansell, Bowmer & Kirkland and Durkan Pudelek. Failed contractor Thomas Fish is also understood to be among the nine.

All 112 firms named in the investigation have until 30 June to respond to allegations and the OFT will deliver its final verdicts next year.

Source

Construction Manager