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The announcement follows a three year investigation by the EC into price-fixing and cartel activity in which investigators discovered a conspiracy by most of the world’s major airlines to fix the price of air freight services, including by means of a range of surcharges. To read the full Commission press release, please visit: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1487&format=HTML&aged=0&language=EN&guiLanguage=en.

Hausfeld & Co LLP commenced proceedings against British Airways in the English High Court on behalf of two lead claimants on September 18, 2008. The lead claimants are seeking a declaration of the court as to BA’s joint and several liability to pay damages to all direct and indirect purchasers of air freight services from the cartelists. Hausfeld is also instructed by hundreds of companies from across the globe, including some of Europe’s biggest brand names, who may be added to the High Court claim in due course.   

On July 14, 2010, BA made an application to the court to add 34 additional co-cartelists to the High Court claim as contributors for the purposes of contributing towards the liability to claimants arising from the cartel.

Anthony Maton, partner at Hausfeld & Co LLP said:

"Clearly we are delighted with the Commission’s decision which reflects cartel behaviour on an unprecedented global scale affecting a vast range of industries and businesses. Today's decision means that these airlines cannot now sensibly seek to avoid their liabilities. Our client’s action in the UK High Court now includes all of BA’s co-conspirators, and we are absolutely determined to seek financial redress on their behalf.  Since the launch of our High Court representative action against BA, we have been retained by hundreds of clients who are prepared to join this action and are in the process of getting retained by many more. We would now urge the airlines involved to seek sensible commercial resolutions of their liabilities or otherwise face determined litigation, costs exposure and reputational damage."

Separately, Hausfeld LLP, Co-Lead Counsel for the US direct purchaser class, has been instrumental in reaching settlements with Lufthansa, American Airlines, JAL, SAS, ANA and Air France-KLM, totaling more than $200 million, with respect to their liabilities arising from the cartel for traffic to, from or within the US. These settlements, other than the Lufthansa settlement, cover direct purchasers of air cargo but do not cover purchases of air cargo made by shippers through freight forwarders, leaving the many European shippers with indirect purchases to, from, or within the US uncompensated for their loss arising out of the cartel. 

However, now that the EC has reached its decision, the damages actions can proceed as ‘follow on’ actions based on the Commission decision. Article 16 of EU Regulation 1/2003 provides, “When National Courts rule on (decisions involving cartels) which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission.” This means that the victims will not have to prove to Courts in England or the Netherlands that the airlines are guilty of anti competitive conduct and the cases can precede effectively as ‘liability admitted’. It will still be necessary to prove the amount of loss caused by the cartel.

The Commission has found that instead of letting market forces dictate prices for freight, the airlines conspired to fix prices. In addition, outside of Europe, multiple airlines have pleaded guilty to conspiring to fix prices between 2000 and 2007.  

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