18 November 2010
British Airways (BA) has won a High Court battle to prevent legal action from two UK flower importers that filed a lawsuit against BA, on the grounds that they suffered loss as a result of the airline’s involvement with a global cartel that fixed the price of air cargo.
The two companies had wanted to act in a US-style class action lawsuit on behalf of around 200 companies, which claim they have suffered loss as a result of the cartel. However, on 17 November 2010 the Court of Appeal ruled on that the case could not go ahead on a so-called representative basis. Claims are likely to be brought individually against BA, which has already sought to bring 33 other airlines into these proceedings.
The lawsuit stems from action taken by the US Department of Justice finding that some of the world’s biggest airlines conspired between 2000 and 2006 to fix cargo prices. US investigations have led to prosecution of 15 airlines and resulted in fines of more than £1 billion ($1.6billion).
BA pleaded guilty in the US three years ago to being involved in the cartel and was fined £188 million ($300 million) for its role in the separate conspiracies to fix both cargo rates and passenger fares. In November 2010, eleven airlines, including BA, Air France-KLM, Australia’s Qantas and Japan’s JAL, were hit with fines from the European Commission (EC) totalling almost £690 million (€800 million) for running an air cargo cartel in Europe for six years. A number of airlines, although not BA, are appealing.
On 18 November 2010 five airlines including BA, Air France and KLM, wrote to the Commission questioning the “disproportionate fines” that they claim will “severely distort the level playing field both within Europe and with third-country carriers”. The airlines complain that the large fines have been imposed in the same year that the industry has been “severely hit” by the volcanic ash crisis causing airlines to lose hundreds of millions of pounds.
Hausfeld, the law firm bringing the action by flower importers Emerald Supplies and Southern Glass House Produce, said it intended to press ahead with the lawsuit and noted that only the representative element of the suit had been struck out.
http://www.ft.com/cms/s/0/0e5038b6-f329-11df-9514-00144feab49a.html#axzz160kGjQ1F