Legal woes to intensify at British Airways

Ikea and Volvo among top companies seeking compensation from airline over cargo price-fixing
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The Independent Online

Some of the largest companies in Europe have added their names to a class action lawsuit levelled against British Airways for price fixing.

The airline has already paid out £270m in fines in the US and the UK after being found guilty of anti-competitive behaviour by running a fuel surcharge cartel. It now faces class action lawsuits on both sides of the Atlantic.

Although BA has set aside £350m for fines, The Independent on Sunday has learnt it could be forced to pay out hundreds of millions more after several blue chip companies, including Ikea, Volvo and TNT, signed up to the suit relating to cargo fuel surcharges.

If BA decides that damages resulting from the suit being brought by US law firm Cohen, Milstein, Hausfeld & Toll, will exceed the remaining £80m it has set aside, it will be obliged to make a further announcement to the stock market.

Michael Hausfeld, a lawyer at the US firm, said that the suit relating to cargo is potentially more significant than the passenger-related case. "Cargo is the much larger case, because the price fixing was global," he said. "It literally covers all routes around the globe."

According to documents filed to the US district court, the suit concerns shipments valued at $29bn (£14.5bn).

Mr Hausfeld is seeking to settle the case before it comes to court and is in talks with Virgin Atlantic – the airline which blew the whistle on the price-fixing, and BA. Several other flagcarriers are also named. If the class actions come to court, BA could face punitive damages on top of the sum it will need to hand over in compensation.

BA has already paid $300m in fines levied by the US Department of Justice. Of that, $100m was for price-fixing relating to passengers, and $200m for cargo. The amount could have been higher had BA not assisted in the investigation.

BA is also subject of a European Commission investigation relating to the same matter.

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