Legal vultures prepare for EU cargo cartel claims windfall

AIR Cargo News has learned that the EU is likely to reveal the results of its enquiry into cargo cartel activities by airlines by the end of September, and possibly even as early as late July. And as the airlines that have already agreed to pay massive fines in the US and elsewhere sit in trepidation of the ruling, litigation-funding companies are lining up hundreds of shippers for civil actions that will follow.

Peter Koutsoukis, managing director of Claims Funding International, revealed that over 200 shippers have expressed an interest in recovering losses both in Europe and Australia on a no win, no fee basis. He explained that in the UK, for example, there is no mechanism for class actions as in the US, however, they say that things are moving fast. “We would take out two or three test cases representing a good cross-section to the competition tribunal. If they ruled in our favour this would set a precedent and we feel the airlines would have no option but to settle all cases.”

It appears that the hard hit airlines will again face massive settlement payments to shippers and legal fees, and a good percentage of the overall awards will end up in the pockets of law companies.

Shippers now have a dilemma. The airlines have already been punished well in excess of their crimes. The ongoing actions are creating huge damage to the financial viability of many operations. If they truly feel that they have been badly damaged by ‘cartel’ activity maybe they should claim. But in reality, diverting investment away and damaging airlines further is likely to lead to less competition and higher long-term airfreight prices. We hope good sense and a sense of what is morally right prevails and these claims are kept to a minimum.

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