Sir Andrew Morritt, the Chancellor of the High Court, held on 8 April that the competition damages claim led by Emerald Supplies Ltd and Southern Glass House Produce Ltd (the Claimants) against British Airways (BA) could not proceed as a representative action.
The Claimants import cut flowers from Columbia and Kenya, for which they use the air freight services of BA and other international airlines. They claim that BA is liable for infringing British and European competition law as it has been party to agreements and concerted practices with other airlines with the overall effect of inflating air freight prices. In September 2008, the Claimants instituted proceedings against BA seeking damages for those infringements as direct or indirect purchasers or both of air freight services for which prices were inflated and representing "all other direct or indirect purchasers of air freight services, the prices for which were so inflated".
A representative action may be brought by, or against, parties that have the "same interest" in every part of a claim, the legal basis of which is part 19.6 of the Civil Procedure Rules. The first pre-condition is that there should be more than one person who satisfies the remaining preconditions. The judge held that the mere fact that the relevant class is both numerous and geographically widely spread is not of itself an objection to a representative action. He did however note that, the more extensive the class, the more clearly should the other pre-conditions be satisfied.
The second pre-condition is that those persons have the relevant interest at the time the claim is begun. The essential question was whether the class that the Claimants sought to represent had the same interest in the claim as the Claimants on 18 September 2008 (when the claim was issued). In addition, according to established case law, the Claimants and the class they seek to represent must all have a "common interest and a common grievance" and the "relief sought must in its nature be beneficial to all" of them. The judge found that it was impossible to identify the members of the class unless and until the action was successful and therefore ruled that the representative element of the damages claim should be struck out. The judge also accepted BA's submission that, even if the criteria for inclusion in the class were sufficiently described, the relief sought in the action was not equally beneficial for all members of the class. Given the nature of the cause of action and the market in which the relevant transactions took place, there is an inevitable conflict between the claims of different members of the class. The judge concluded that it is not convenient or conducive to justice that actions should be pursued on behalf of persons who cannot be identified before judgment in the action and perhaps not even then.
However, it was also noted that the avoidance of multiple actions based on the same or similar facts can equally well be achieved by a Group Litigation Order made under CPR Rule 19.11. The European Commission is currently investigating an alleged cartel in this sector, but it is yet to reach a decision. The judge noted that the existing 178 additional claimants and any others who seek to join in after the publication of the European Commission's investigation are more conveniently accommodated under that procedure.
The Claimants have requested leave to appeal against the ruling from Justice Morritt; if he refuses this, the Claimants will have another 21 days to go to the Court of Appeal in pursuit of permission.This case demonstrates the difficulty of establishing a class for a representative standalone action under the current rules.