The Competition Appeal Tribunal (CAT) ruled on Friday that the fines were "excessive given the nature of the infringement".
The six contractors were among 103 companies fined a total of 拢129.5m by the OFT in September 2009 for colluding on bids. They were found to have been submitting so-called 鈥渃over prices鈥�, putting in inflated bids for contracts that they did not want to win, but did not want to risk falling off tender lists by not submitting any bid at all. Contractors colluded to ensure that their bid was too high to win.
Friday's ruling was the first appeal to be judged by the CAT, with 19 more cases left. The case was heard by the Honourable Mr Justice Barling (presiding), Prof Andrew Bain and Peter Clayton.
Kier, facing the biggest fine of 拢17,894,438, had its penalty reduced by the CAT to 拢1,700,000.
Ballast Nedam had its 拢8,333,116 fine reduced to 拢534,375.
Bowmer & Kirkland鈥檚 original 拢7,574,736 fine was reduced to 拢1,524,000.
Corringway Conclusions鈥� original 拢769,592 fine was reduced to 拢119,344.
Thomas Vale鈥檚 fine was reduced from 拢1,020,473 to 拢171,000.
John Sisk鈥檚 fine was cut from 拢6,191,627 to 拢356,250.
The fines are subject to interest at 1% above Bank of England base rate from 24 November 2009 to the date of payment.
The tribunal concluded that the penalties imposed by the OFT were 鈥渆xcessive given the nature of the infringement, together with the harm it was likely to cause, together with certain general mitigation, including the fact that the practice was long-standing in the industry and widely regarded as legitimate鈥�.
It also said that for such infringements the figure of 5% of turnover in the relevant market as a minimum fine was too high, given that the maximum for the most heinous infringements was 10%.
The OFT issued its response to the appeal tribunal judgment: 鈥淭oday's judgment was limited to the level of penalty for these six companies, who did not challenge our finding that they engaged in illegal cover pricing, in breach of competition law. The right to appeal against the OFT's decisions in Competition Act cases is an integral part of the competition regime and an important safeguard for parties.
鈥漈he OFT will consider this judgment in detail, alongside those in the 19 other construction cases yet to be determined, and will consider whether it should appeal to the Court of Appeal.
鈥淔inancial penalties play a key role in deterring the companies involved, and other businesses, from breaching competition law. The OFT will consider whether the judgment has any implications for its practices and policies for ensuring a high level of compliance with competition law in the future.鈥�
The full CAT judgment can be read
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