The OFT (Office of Fair Trading) has dawn raided 22 construction companies in Nottinghamshire, Leicestershire, Derbyshire and South Yorkshire concerning allegations of collusive tendering. This latest investigation is one of many and confirms that the construction industry is under intense regulatory scrutiny. Act now to ensure compliance with the competition rules, or face the potentially serious consequences.
For the firms involved, fines of up to 10% of worldwide turnover. For the individuals, the spectre of criminal prosecution, with imprisonment for up to 5 years and theoretically unlimited personal fines. There have been no criminal prosecutions under the competition legislation as yet. But the signs are there that such prosecution is imminent: the OFT refused in the current investigation to rule out "the possibility that the investigation may uncover some behaviours in breach of the criminal cartel offence under … the Enterprise Act 2002"; it also confirmed that the Serious Fraud Office (responsible for criminal prosecution) accompanied its raids of construction firms last year; and as we reported in our Law-Now Whistleblower sends panic through the construction industry, the OFT has already singled out the construction industry for special attention under the criminal legislation.
This latest signal from the OFT highlights the urgent need to ensure compliance with the competition rules. Consider introducing a competition compliance programme as a starting point. If you or your firm have been or are engaged in any cartel activity, think carefully about blowing the whistle before your competitors do. First in line, you should secure full immunity for the firm from financial penalty and for individuals from criminal prosecution.
