Law firm Pinsent Masons was delighted to assist in the drafting of the new Competition Law Code of Conduct for the construction sector in conjunction with industry bodies the UK Contractors Group (UKCG) and the National Federation of Builders (NFB).
The law firm, which has its Midlands headquarters in Birmingham’s Colmore Square, has been supporting UKCG and NFB in industry-level discussions with the Office of Fair Trading (OFT) regarding the on-going investigation into alleged bid-rigging in the construction sector, under the Competition Act 1998. The OFT expects to issue a final decision in the investigation within the third quarter of 2009.
Competition law partner Alan Davis said: “Given the five-year investigation into alleged bid-rigging in the sector, this code of conduct is a good thing for the industry and this is a good time for construction companies to put a competition law compliance programme in place. Many construction contractors have argued throughout the OFT’s investigation that they didn’t understand ‘cover pricing’ was illegal, nor did they intend to breach competition law. Ignorance of the law has never been an excuse but taking active steps to educate staff and provide guidance on how the law applies to their activities has obvious benefits.
“Paying lip-service to the Code is not enough and may even be an aggravating factor resulting in a higher fine. Therefore, for the Code to be successful, it must now be properly implemented throughout the sector. A successful compliance programme must have the visible support of senior management and written policies and guidelines should be tailored to particular markets or industry activities. Training of relevant staff and regular evaluation and active monitoring of the effectiveness of the programme should also be implemented.
“The OFT has made it clear that, in any future investigation involving new breaches in the construction sector, the criminal prosecution of individuals is very likely. It has also made recent statements that it expects directors to play a more active role in detecting and stopping cartel activity by staff or risk director disqualification. Compliance with competition law must be a key objective for all contractors. These steps are not costly to introduce and will provide real value in reducing exposure to the high risks of breaching competition law, such as a fine of up to ten per cent of company turnover.”
