Bid-rigging: Councils may sue, says APSE

A not-for-profit local government body has warned that councils may sue contractors for losses if they are found guilty of bid-rigging.

The Association for Public Service Excellence (APSE) said that if councils find that they have suffered losses as a result of the alleged scandal, it could spark mass litigation from the public sector.

The warning could spell even more bad news for the 112 firms alleged by the OFT to be involved in questionable practices - they already face the prospect of fines of up to 10% of their annual turnover if they are found to be guilty.

APSE chief executive Paul O'Brien said: "The OFT investigation is not about a few hundred quid in a brown paper envelope or a discount for cash for non payment of VAT. This is potentially about colossal loss for the public purse.

"It could relate to contracts for high value public sector assets such as new hospitals, schools and homes and could signal unprecedented claims by the public sector against any construction firms if they are found guilty."