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22 février, 2008 13:59

Claire Ruckin

Legal Week

02-15-2008

Class action giant Cohen Milstein Hausfeld & Toll has won a landmark victory in the U.S. courts after securing a $200 million settlement from British Airways and Virgin Atlantic Airways in relation to price-fixing, it was announced Friday.

The settlement will see £73.5 million ($144.15 million) put aside for just over 5 million U.K. residents who will have until 2012 to claim up to £20 ($39) for a return flight after both airlines admitted to price-fixing fuel surcharges on flights between August 2004 to March 2006.

Under the arrangement -- the first-ever transatlantic recovery -- the airlines will also pay out $59 million to U.S. passengers over the price-fixing charges. The amount consumers can claim represents around a third of the fuel surcharge levied per long-haul ticket.

Cohen Milstein senior partner Michael Hausfeld commented: "This is the first time non-U.S. citizens have been rewarded on an equal footing to U.S. citizens in a case before the U.S. courts, making this a legal precedent and a significant milestone in both U.S. and U.K. legal history."

He added: "We are delighted to have achieved such a terrific settlement for U.K. consumers. BA and Virgin overcharged their customers over a period of almost two years. Customers in the U.K. should claim back what was unlawfully taken from them in order to demonstrate that such behaviour is unacceptable."

The settlement comes after BA was last year fined £270 million ($529.6 million) by U.K. and U.S. competition authorities. Virgin, which blew the whistle on the agreement, admitted it was involved in the price fixing but escaped a fine and became a party in the civil proceedings.

BA chief executive Willie Walsh in a statement: "As we have previously said, we absolutely condemn any anti-competitive activity by anybody. This settlement, which BA and Virgin have jointly agreed with the lawyers for the plaintiffs, is fair and reasonable. BA can now move on and do what we do best -- delivering excellent customer service."

News of the settlement drew mixed reactions. Freshfields Bruckhaus Deringer litigation partner Paul Lomas told Legal Week: "Because there are views as to whether the U.S.-style class-action system is the best way of getting redress, given its well-known perceived excesses, policy-makers may feel it more appropriate to improve the quality of redress in Europe so that people do not have to cross the Atlantic in order to get this kind of compensation.

"That is certainly the theme in the various policy recommendations that have been issued over the past few months and of the current legislative activity in Europe."

However, Manches litigation chief Clive Zietman said the settlement was "another reason not to bring a class action in this country," commenting: "It is an excellent breakthrough for the British consumer but I don't think this will lead to a wholesale export of similar class actions in England. On the contrary, it looks more than ever as if the U.S. is the place to go for class actions -- even as a foreign consumer."

As first reported in Legal Week last year, Herbert Smith competition head Jonathan Scott and competition partner James Quinney advised longstanding client Virgin, with Simpson Thacher & Bartlett litigation partner David Vann acting as U.S. counsel. Slaughter and May advised regular client BA on the allegations.

Cohen Milstein's role acting against Virgin and BA comes less than a year after the U.S. firm launched in the U.K.