A High Court judge has criticised Hausfeld over a “false statement of truth” and said its representation of 65,000 Chinese claimants in the British Airways air cargo cartel case represented an “abuse of court process”.
The criticism was laid out in a judgment handed down by Mrs Justice Rose earlier this month.
Rose J ruled in favour of British Airways on its application to strike out the Bao Xiang claim for damages in relation to the airline’s alleged price fixing cartel in the mammoth Emerald Supplies Ltd & Others v British Airways plc case.
Hausfeld London managing partner Anthony Maton, the lead lawyer for this group of claimants, said he would seek permission to appeal Rose J’s decision.
A statement by the firm said it “respectfully disagreed” with the judgment.
BA and five other airlines applied to strike out the claim on the grounds that Hausfeld was not authorised to bring proceedings on behalf of the claimants. The boutique firm was instructed to bring the claim by the China Chamber of International Commerce (CCOIC) on behalf of its members.
Prior to the strike out hearing Hausfeld said the number of claimants would be dramatically reduced because just 5,277 of the 64,697 claimants could show they had shipped cargo by air during the period in question.
In her decision, Rose J ruled: “It was wholly irresponsible of Hausfeld to launch proceedings in the name of tens of thousands of additional claimants when there was no basis for signing a statement of truth in the claim for…asserting that those claimants had shipped goods by air.”
Hausfeld previously said its clients had spent almost £8bn on air freight during the period, though did not claim this was the amount lost by the claimants.
The judgment continued: “The figure is intended to send a clear message that the value of the claim is several billions of pounds, even if only a modest overcharge is eventually proven.
“It is difficult to imagine on what basis Hausfeld could have signed the statement of truth as regards this figure if in fact only 5,277 of the claimants shipped freight by air.”
Regarding the issue of whether Hausfeld had informed the defendants’ lawyers Slaughter and May about the proposed reduced number of claimants, Rose J said: “Far from alerting Slaughter and May when issuing or serving the claim form that there were serious difficulties with identifying claimants, Hausfeld served the claim form with no explanations and the false statement of truth was compounded when the particulars of claim…was served a few months later.”
She concluded: “To allow this claim to proceed would, in my judgment, be manifestly unfair to the airlines and would bring the administration of justice into disrepute among right-thinking people.
“It is an abuse of the process and should be struck out for that reason.”
In a statement to The Lawyer, Hausfeld said: “Regrettably, the High Court has determined that the claims should be struck out. We respectfully disagree with this judgment and are disappointed that access to justice is being denied in this jurisdiction for so many Chinese claimants impacted by the worldwide air cargo price-fixing cartel.
“We consider the claim was properly brought and will be appealing. We will continue to pursue these claims, as well as the ongoing claim on behalf of Emerald Supplies and 564 co-claimants.”
Maton had instructed 39 Essex Chambers’ Adrian Hughes QC and Ben Olbourne on the application hearing.
The decision to strike out the claim was the second such decision since Rose J came on to the case in July.
Earlier this month the Court of Appeal ruled in favour of BA on its application to remove economic tort claims from the case, which the claimants’ lawyers Hausfeld previously said represented “more than half of the claim value (over £500m)”.
The ruling is expected to significantly reduce the scope of the claim, which was previously estimated at £1bn.
The Lawyer revealed in July Mr Justice Peter Smith is facing an investigation by the Judicial Conduct Investigations Office in connection with his recusal from the case.
News of the investigation emerged after a judgment by Smith J in which he revealed he had escalated his complaint about lost luggage from BA’s customer services team to its chief executive Keith Williams and the lawyers acting for BA on the cartel case.
The legal lineup:
In the Bao Xiang strike out application hearing:
For the claimants, Bao Xiang International Garment Centre and ors
39 Essex Chambers Adrian Hughes QC and Ben Olbourne, instructed by Hausfeld partner Anthony Maton
For the defendants, British Airways
One Essex Court’s Kenneth MacLean QC and Gideon Cohen, instructed by Slaughters partners Richard Swallow and Jonathan Clark.
For the other applicants, Qantas Airways, Singapore Airlines Cargo, Singapore Airlines, Cathay Pacific Airways, Cargolux Airlines International
Monckton Chambers’ Daniel Beard QC and Thomas Sebastian, instructed by King & Wood Mallesons