Briggsy’s Property Blog: Region’s image improved by appeals success
NO doubt GMI Construction breathed a huge sigh of relief last week when the Competition Appeal Tribunal wiped off a £1.8m fine the Leeds-based firm had been slapped with by the Office of Fair Trading.
The fine was meted out in 2009 as part of a wider decision to hit more than 100 construction companies with a total of £129m of penalties.
The OFT had said the firms, following a Competition Act investigation, had colluded among themselves while bidding for contracts, leading to customers, such as local authorities, having to pay too much.
GMI Construction’s appeal success follows engineering and construction services firm Renew’s success at cutting the fines it faces as a result of the cover pricing controversy by more than £2.5m.
The Competition Act Tribunal has reduced the penalty imposed against Leeds-based Renew, its subsidiary Allenbuild and former subsidiary Bullock Construction, from £3.5m to £926,250.
It is understood that every firm that has so far appealed against the fines has seen its penalty reduced or eliminated entirely, with the tribunal having labelled the OFT’s approach to calculating the penalties as “disproportionate”.
However, whether other Yorkshire firms included in the investigation – including Allenbuild, Jack Lunn, Lemmeleg, Holroyd Construction, Lotus Construction, Stainforth Contruction, Propencity Group, York House Construction and Hull-based Wright – have appealed is undercertain.
There’s no doubt that the OFT was right to carry out the investigation and that many of its fines are valid. But what the appeals demonstrate are two things.
Firstly, as a number of southern firms have also had their fines reduced or wiped clean, the argument by some commentators that all the miscreants punished by the investigation were based in Yorkshire is false and hopefully goes to some way to cleaning the region’s image.
Secondly, at a time when many firms involved in property are still clawing their way out of the recession, any monetary leeway is welcome.
Hopefully those exonerated can now move on, wipe their slate clean and plan for growth.
