CAT holds that the OFT’s fining powers are not subject to any limitation period

15/04/11

The Competition Appeal Tribunal ("CAT") has today handed down judgment in another appeal against the OFT's decision on bid rigging in the construction industry dated 21 September 2009 (the "Decision").

In the Decision, the OFT found that Quarmby Construction Company Limited and St James Securities Holdings Limited ("Quarmby") had committed three infringements of the Competition Act 1998 by engaging in cover pricing.

On appeal to the CAT, Quarmby raised a large number of grounds of appeal as regards both liability and the level of the penalty imposed upon it.

The CAT unanimously dismissed Quarmby's appeal against liability. In so doing, the CAT held - having considered the issue for the very first time - that the OFT's fining powers are not subject to any limitation period. In particular, the CAT rejected Quarmby's argument that the 5 year limitation period which applies to the European Commission (by virtue of Article 25 of Regulation 1/2003) should be "read into" the Competition Act.

The CAT noted that if Parliament had intended to constrain the OFT's powers in this way, it "would have expected this to be clear on the face of the 1998 Act". The CAT also rejected an argument by Quarmby that the Limitation Act 1980 applies to the OFT's fining powers.

The CAT did, however, grant Quarmby a reduction in penalty. Following its own judgments in some of the other construction appeals, the CAT held that the OFT had erred at Step 1 of the calculation process by applying an excessive starting point percentage and by using the last business year prior to the Decision for determining relevant turnover rather than the last business year prior to the end of the infringement.

The judgment is here.