Lawyers to examine contracts the OFT did not
The fallout from the Office of Fair Trading probe into bid rigging is escalating after a leading lawyer revealed he has been asked by clients to examine possible abuses of competition law by contractors who were not named in the inquiry.
David Greene, head of litigation at Edwin Coe, and the lawyer behind the Northern Rock and Railtrack shareholder action cases, has been contacted by a number of councils and housing associations that want to claim compensation from contractors for inflated pricing in the light of the OFT investigation.
It was initially assumed lawyers would only look at the 112 firms and 240 infringements named in the OFT probe. But Greene said: “The question is whether the OFT findings represent the tip of the iceberg. We are examining other tenders at the moment, a wider field than the OFT’s work.
“There is also the issue of parties not identified by the OFT. We’re talking about potentially huge figures that are subject to anti-competitive practice.”
Greene said he would look at follow-up actions to the OFT decisions, which will be announced next year. He said: “This introduces liability and that in turn opens up the question of whether the OFT’s findings are replicated in any other contracts. The OFT itself said ‘it is not safe to assume that the addressees of the statement of objection are the only companies that may have engaged in cover pricing’.”
The question is whether the OFT findings are the tip of the iceberg
Greene added that because of the continuing relationships between contractors and clients he hoped claims would be settled without litigation.
After the OFT makes its decision, the focus will turn to the Competition Appeals Tribunal, but a follow-up to contracts not covered by the OFT would go to the High Court.
Scott Campbell, an associate with US law firm Cohen, Milstein, Hausfeld & Toll, which is offering to act for clients that may want to sue, said he was set to speak to a number of private sector clients.
Meanwhile, the Construction Confederation has written to non-executive directors of the OFT to ask them to give evidence for the claim that public sector contracts have been inflated by up to 10% by cover pricing.