The Competition Tribunal has issued around 100 certificates of decision confirming that 15 construction companies have indeed breached the Competition Act, potentially opening the way for civil claims for damages.

The certificates have been issued to the City of Cape Town, the South African National Roads Agency Limited (Sanral), Bayer, the Economic Development Department, and lawyers representing the National Black Contractors and Allied Trades. They deal with a host of Sanral roads projects, some property developments, several World Cup soccer stadiums, mining contracts and a number of other civil engineering developments.

Competition Tribunal spokesperson Nandi Mokoena confirmed with Engineering News Online that a certificate’s sole purpose was for claiming damages in a civil court, in line with Section 65(6)(b) of the Competition Act. 

However, she stressed that the tribunal did not ask why applicants wanted the certificates, but simply issued them when requested to do so. “So we can't be sure that the applicants will use the certificates for claiming damages.”

But Competition Commission acting deputy commissioner Oliver Josie, who oversaw the fast-track settlement process through which 15 companies were collectively fined R1.46-billion for having breached the Act on 140 projects valued at R47-billion, was of the view that the issuance of the certificates could well open the way for civil actions.

Speaking at a recent seminar hosted by the University of the Witwatersrand’s Mandela Institute, Josie said he anticipated that claimants might approach the courts in the coming months.

He also noted that none of the implicated companies had sought to settle civil claims ahead of the tribunal’s penalty determination. Had they done so, the commission would have considered it as a “mitigating factor and would have probably lowered the penalty”.

But while the certificates of decision were a critical first step, they were no guarantee of success in a civil proceeding.

Abrahams Kiewitz Attorneys’ Charles Abrahams, who is involved in the precedent-making attempt to claim damages on behalf of victims of collusion in the bread sector, raised a number of challenges associated with pursuing “follow-on damages”, notwithstanding confirmation of collusion by the competition authorities.

Abrahams said while Section 65 of the Competition Act included the right to pursue damages, the process of pursuing such damages was not straightforward, with the Supreme Court of Appeal having also described as complex the issue of assessing damages suffered by victims of anticompetitive conduct.

The quantum of overcharging by a cartel, the identity of the victim, as well as the period of transgression had to be determined. In the bread cartel case two classes of claimants have been identified, but limited to Western Cape, while the period was limited December 18, 2006, to February 14, 2007.

Economists had to be employed to calculate the potential level of overcharging for both classes, which has been estimated at between R1.6-million and R2.1-million.

Despite the complexities and challenges associated with pursuing civil damages following a tribunal determination, it were anticipated that actions against construction companies was still likely.