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Media Releases
2007

06 August
2007

British Airways fined £121.5 million by the OFT

Competition law expert John Schmidt, at leading UK law firm Shepherd and Wedderburn, believes the Office of Fair Trading (OFT) fine imposed on British Airways today opens the door for damages litigation on both side of the Atlantic.

British Airways has been fined a record £121.5 million by the OFT after it admitted collusion over the price of long-haul passenger fuel surcharges. The airline expects to be fined an additional £225 million by the US Department of Justice (DoJ) later today.

John Schmidt, a partner at the firm, said: "Not only is this the highest fine imposed by the OFT, together with the DoJ's decision expected later today, this should also mark the opening shot for damages litigations on both sides of the Atlantic.

"Given the amount of private and corporate customers and the availability of triple damages in the US, the amount for any settlement is likely to be substantial and potentially even reach the level of the fine.

"Even though some US class action firms are also preparing for litigation in Europe, I would expect most of the action in this case to take place stateside, given the procedural advantages in the US and the potential for higher damages awards.

"Another interesting point is that this is also the first time where the OFT has used its criminal powers under the Enterprise Act. This investigation is still ongoing and the OFT is keen to point out that the civil corporate fine is without prejudice to that investigation.

"For the individuals concerned, a lot is at stake here. If the OFT can establish criminal liability, there is the potential not only for gaol in this country, but it would also open the door for a US extradition request. This is a real possibility as the long arm of the US justice system has in the past reached across the Atlantic, in the case of the NatWest four and for Morgan Cruicible's ex-chief executive Ian Norris."


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