Blow to UK collective actions as BA, Slaughters beat Hausfeld in Court of Appeal
An attempt to bring a US-style class action through the Court of Appeal has been thrown out after Lord Justice Mummery said the case was “fatally flawed”.
An attempt to bring a US-style class action through the Court of Appeal has been thrown out after Lord Justice Mummery said the case was “fatally flawed”.
Hausfeld partner Anthony Maton instructed 20 Essex Street’s Iain Milligan QC to represent flower shippers, Emerald Supplies and Southern Glass House Produce, in their claim against British Airways.
The airline brought in heavyweights Slaughter and May, with senior associate Justin McClelland instructing One Essex Court’s Kenneth Maclean QC.
The claimants had attempted to bring a representative action against BA, seeking damages in respect of losses they claimed to have suffered as a result of an alleged cartel in the provision of airfreight services.
The claimants sought to act as representatives of all “direct and indirect purchasers of airfreight services, the prices for which were inflated by the agreements or concerted practices”, in essence seeking to extend the number of potential claimants to an almost limitless number.
Mummery LJ upheld the first instance ruling and rejected the claim stating: “Emerald’s case for a representative action, whether as originally pleaded or as proposed to be amended, is fatally flawed.
“The fundamental requirement for a representative action is that those represented in the action have “the same interest” in it.
“At all stages of the proceedings, and not just at the date of judgment at the end, it must be possible to say of any particular person whether or not they qualify for membership of the represented class of persons by virtue of having “the same interest” as Emerald.”
Ashurst litigation partner Arundel McDougall said the decision “has shut the lid firmly closed on the adoption of US style class actions in competition litigation in this jurisdiction.
“The message is that our collective procedures are fit for the purpose. Changes may emerge via European competition policy, but this is unclear.”
Edwin Coe partner David Greene said the ruling was “disappointing but not surprising.”
He added: “The judgment reflects the great difficulty for consumers or other large groups to bring a collective action in this jurisdiction which restricts their access to the court to secure redress.”
Mummery LJ chaired a panel of three which included Lord Justices Toulson and RImer who concurred with the decision.katy
Readers' comments (5)
Manangles | 19-Nov-2010 11:27 am
What's wrong with just using the new fraud act against what was a conspiracy to defraud market participants. Recovering under a constructive trust theory and equitable tracing ??
And is this fraud then not a predicate offence for the purposes of money laundering investigations ??
Are we not discussing Serious Organised Crime ??
Where is SOCA or are they not interested in fighting this type of Fraud??
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Anonymous | 19-Nov-2010 11:48 am
Surely it would be the SFO that should handle this? They're notoriously inept.
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Manangles | 19-Nov-2010 1:03 pm
SOCA is made up of SFO personnel as and when required !! no excuses, I don't think they like these type of defendants.
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Bobbles | 19-Nov-2010 1:57 pm
Hearing was about whether representative action could be brough in the UK Courts. A question perhaps of "can the two claimants act on behalf of all those others (unidentified as yet) who may have a suffered relatively similar loss"?.
This is a very different subject from: "Can any one of the persons who alleges that he has suffered loss as a result of alleged cartel activities claim that loss back from BA"?
And a very different again from "should the SFO investigate BA for complex fraud, and subequently bring criminal proceedings against it".
Read article, engage brain, type.
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Manangles | 19-Nov-2010 2:54 pm
Im pretty sure this case was about recovering losses as a result of co-ordinated over charging and market manipulation.
The New Fraud Act merely requires a basic act of dishonesty resulting in a loss anywhere !!
So instead of enjoining potential claimants in UK, any claimant could allege fraud and recover via contructive trust theory.
An allegation of fraud would engage the various agencies and given the amount of over charging or losses then this brings the matter to the SFO and the conspiracy brings in SOCA.
Sometimes you have to think outside the box, but thanks anyway for pointing out the obvious, yes you read the article and I considered the case and possibilities. 'Go You' as my daughter would say!!
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