Appeal judge says that ’difficult’ questions were raised in relation to OFT evidence

AH Willis and GMI are not liable for penalties imposed on them by the OFT for alleged cover pricing.

In a judgment handed down this morning by the Competition Appeal Tribunal almost £2m in OFT penalties were wiped out entirely.

In a strongly-worded document relating to GMI, the Honourable Mr Justice Barling said that “difficult and important questions arise in relation to the ’evidence’ adduced by the OFT” concerning the alleged incidents of cover pricing committed by the firm.

GMI was fined £1.8m by the OFT in 2009 as part of a wider decision to slam 103 construction companies with £129m of fines.

AH Willis was also successful in its appeal against liability and had it £120,000 fine eliminated.

It was more of a mixed outcome for the other company, North Midland, which also found out the outcome of its appeal this morning. The company was found to be liable in some areas it had contested and had its fine reduced from approximately £1.5m to £300,000.

Today’s three judgments were the last of 25 handed down by the CAT in relation to cover pricing fines.

Of those six contested liability as well as the fines themselves and one other – Durkan – was partially successful in its challenge on this point.

Every single firm that appealed has seen its penalty reduced or eliminated entirely, some by 94%, after the CAT labelled the OFT’s approach to calculating the penalties as “disproportionate”.

The OFT has until 27 May - one month today - to decide whether it will appeal these 25 judgments or not.

This comes as the OFT has had the period in which it can appeal the CAT decision to reduce fines imposed on construction recruitment agencies, Eden Brown, Hays and CDI, extended from 1 May to 24 May.

It is expected that the OFT’s course of action with regard to the recruiters will be broadly similar to that which it adopts with the construction companies.