Lindum Construction Co Ltd & Ors v The Office of Fair Trading (OFT)

A statutory appeal may be the exclusive means of challenging a regulatory penalty where the statutory scheme provides a full merits appeal within a defined period and contains safeguards governing enforcement and finality. A party that does not appeal remains bound by the penalty and cannot later recover sums paid by bringing a common-law restitution claim based on alleged unlawfulness. Nor may it defend recovery proceedings by raising grounds that could have been advanced on appeal. Successful appeals by other parties do not generally invalidate or alter unappealed penalties imposed under the same decision.

The OFT imposed penalties on the claimants under the Competition Act 1998 following findings that they had infringed the Chapter I prohibition. The claimants did not appeal within the statutory time limit. Other undertakings appealed, and the Competition Appeal Tribunal reduced penalties imposed on them, but the claimants did not seek extensions of time.

Interserve and Willmott Dixon sought restitution of penalties already paid. Lindum sought to resist recovery of the unpaid balance. The central issue was whether the statutory appeal to the Competition Appeal Tribunal was the exclusive method of challenging the imposition or amount of the penalties.

1. Exclusive statutory remedy. The statutory scheme provided a specialist tribunal, a full appeal on the merits, defined grounds of appeal, procedural safeguards and a strict time limit. Parliament must therefore be taken to have intended that the statutory appeal was the exclusive method of challenging the imposition or amount of a penalty.
2. Effect of failure to appeal. In the absence of a successful appeal, the penalties remained binding and enforceable. The claimants could not establish that the penalties had been unlawfully exacted for the purposes of a restitution claim based on the Woolwich principle. The OFT could lawfully receive payment and recover unpaid sums under section 37 of the Competition Act 1998.
3. Other parties’ appeals. Decisions of the Competition Appeal Tribunal on appeals brought by other undertakings were confined to those appellants. They did not revoke, vary or render unlawful the penalties imposed on the claimants, who had not appealed.
4. Formal validity and public-law challenges. The penalty notices complied with the statutory formal requirements. The claimants’ complaints concerned the exercise of the OFT’s powers and the amount of the penalties, rather than terms unauthorised by statute. Such complaints fell within the statutory appeal mechanism.
5. Further penalty decision. The OFT was functus officio in relation to the penalties already imposed. The statutory scheme did not permit it to make a second decision imposing different penalties without a revocation or variation through the prescribed appeal process.
6. The claims for restitution were dismissed. Lindum remained liable for the outstanding penalty, which could be recovered under section 37.

First-instance decision. The judgment describes earlier Competition Appeal Tribunal and Court of Appeal decisions concerning appeals by other undertakings against the OFT’s decision, but the present proceedings were determined in the High Court.