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Legal action against OFT contractors investigated

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Councils are investigating whether they will be able to sue construction firms that have been found guilty of bid rigging and cover pricing contracts, a solicitor has confirmed.

David Greene of law firm Edwin Coe told LGCPlus that five councils in the south-east and some housing associations had contacted him for legal advice on whether they would be entitled to claim for damages.

They are waiting for a final report from the Office of Fair Trading (OFT), due in early 2009, which is the result of a five-month probe that accused 112 building companies of secretly discussing their bids to inflate the cost of contracts.

So far 37 construction companies have admitted some participation in cover pricing. The rest have six weeks to respond to the allegations.

'Potential losses£4bn'

Mr Greene said councils would be able to seek damages if construction firms they had worked with are found guilty.He speculated that the potential losses councils had incurred could be around£4bn.

In the past, Mr Greene said, it was “very difficult to prove bid rigging because it all goes on in secret". But he added: "The advantage that local authorities have now is that there has been this inquiry and if the companies are found guilty councils won’t have to prove the company’s liability.”

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