US legal giant offers to act for bid-rigging victims

The US law firm that forced British Airways and Virgin Atlantic to pay $200m to passengers after a cartel investigation is offering to act for clients that want to sue contractors in the wake of the Office of Fair Trading inquiry.

Cohen, Milstein, Hausfeld & Toll (CMHT), which works on a no-win, no-fee basis, is to contact councils and other clients that believe they have suffered as a result of bid rigging.

The move is the first clear indication that contractors fined by the OFT can also expect legal action from clients, compensation for which could run into billions.

The OFT is investigating 112 firms and 240 alleged infringements on contracts worth about £3bn. Nine firms involved with 5% of the cases are being investigated for the most serious offence of making or receiving compensation payments for losing bids.

It is understood that the nine firms accused of this include three large firms – Mansell, as revealed by Building last week, Bowmer & Kirkland and Durkan Pudelek. B&K’s turnover is £819m and Durkan Pudelek’s is £34m. Failed contractor Thomas Fish is understood to be among the nine.

CMHT’s move comes as councils try to distance themselves from firms mentioned in the inquiry.

The OFT estimates that prices were pushed up by about 10%.

Scott Campbell, a CMHT associate, said: “It’s at an early stage but we will be looking to sign people up and get them compensation.”

He added: “We’re analysing public procurement documents at the moment to help us identify the big building projects the public sector was involved in and who won the tenders.”

Sir Simon Milton, chair of the Local Government Association, said any fines levied by the OFT should be given to councils if they were overcharged.

CMHT won a settlement in the US after BA and Virgin Atlantic were found guilty of colluding to hike fuel surcharges.

Earlier this month it won a large settlement for the families of three Nepalese

men who were murdered in Iraq while working with Daoud & Partners, a subcontractor of US firm KBR.