In November 2010, the European Commission fined a group of 11 air cargo carriers €799 million for operating a worldwide cartel which affected cargo services from, to and within the European Economic Area between 1999 and 2006. The air cargo carriers that were fined included most of the world’s leading airlines, including British Airways, Lufthansa and Air France-KLM.
This was one of several decisions by competition authorities around the world, including the United States, Canada, Brazil, Australia, South Korea and South Africa, reflecting the truly global nature of the airlines’ effort to manipulate air cargo prices. Businesses everywhere were being overcharged and had no alternative options; most of the world’s major airlines were colluding.
In 2008 Hausfeld brought proceedings in the English High Court against British Airways initially on behalf of a group of UK flower importers, including Emerald Supplies Limited, the lead claimant. Our client group of claimants expanded to over 100 claimants comprising businesses from around the world, including several blue-chip multinationals, retailers, fashion companies and industrial component manufacturers.
Hausfeld’s ability to share risk and work on innovative fee arrangements meant that all members of the claimant group were effectively shielded from legal costs throughout the proceedings.
This pioneering case was the first major cartel group action in the UK courts, and it remains one of the largest and most diverse group of claimants to jointly pursue a cartel damages claim. It involved several complex and novel points of law and multiple interlocutory challenges by the defendant airlines, who instructed 15 defence firms including many of the most well-known global law firms.
In 2018, the claims were stayed to give the parties an opportunity to enter into a mediation process. The claims were subsequently withdrawn on confidential terms. Being one of the first competition damages actions of its kind, the Air Cargo proceedings laid much of the groundwork on which present-day private competition claims proceed.
The Commission’s press releases are available here and here.