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Hausfeld Launches Marine Hose Action Against Dunlop in London High Court

HAUSFELD COMMENCES HIGH COURT ACTION AGAINST DUNLOP FOR INVOLVEMENT IN MARINE HOSE CARTEL

Litigation could herald group action

Parker settlement and unique after-the-event insurance policy offers claimants valuable cooperation and ‘no-risk’ recourse to the courts

Leading global claimants law firm Hausfeld & Co LLP (Hausfeld) has commenced a High Court action against Dunlop Oil & Marine Limited (Dunlop) for its involvement in the marine hose cartel. The cartel took place during the period from at least 1986 to 2007 and involved five other leading manufacturers of marine hose, all of whom conspired to fix, raise, maintain or stabilise the prices of the rubber hose which is used to transfer oil between storage facilities and/or buoys.

Hausfeld has issued the claim on behalf of Waha Oil Company (Waha), the second biggest oil producer in Libya. The company made significant purchases of marine hose from Dunlop and the other cartelists during the cartel period. In criminal proceedings brought by the UK Office of Fair Trading (OFT), Dunlop executives have already admitted that the overcharge arising from the cartel amounted to at least 15%. Hausfeld also confirmed it has been and is in the process of being instructed by additional claimants seeking to take action against Dunlop.

Hausfeld’s global settlement in March 2009 with Parker ITR, one of the other marine hose cartelists, provides substantial cooperation benefits to claimants (see www.hausfeldllp.com/marinehose or www.marinehoseclaims.com). That settlement, the European Commission’s infringement decision regarding the cartel, and the criminal charges brought by the OFT against individuals involved in the cartel form the basis for this action against Dunlop. Furthermore, in order to allow Waha to bring this action, Hausfeld negotiated an agreement with after-the-event insurer FirstAssist to provide Waha with protection against disbursements and adverse cost risks arising from the case.


Anthony Maton, partner in Hausfeld, comments:

“This action follows our groundbreaking settlement agreement with Dunlop’s fellow cartelist Parker ITR, whereby any of Parker ITR’s customers are able to claim compensation in respect of their losses arising from the cartel, irrespective of where they reside or where the marine hose was bought, and provides for Parker ITR’s co-operation in bringing claims against the other cartelists.

“We are now commencing this action against Dunlop in order to offer Waha and other aggrieved purchasers a further means of recouping their losses arising from the cartel with the benefit of an innovative insurance and funding package that minimises the threat of incurring prohibitive legal costs and maximises claimants’ recovery.”

For further information or to arrange interviews please contact:

Beth Farrer/Rohit Grover /Claire Wordley
Spada
Tel: 020 7269 1430
bethfarrer@spada.co.uk / rohit.grover@spada.co.uk / clairewordley@spada.co.uk

Background – the marine hose cartel

• Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities and/or buoys.
• During the period 1986 to 2007 a worldwide cartel existed amongst the leading manufacturers of marine hose to fix, raise, maintain or stabilise the prices of marine hose.
• The cartelists include: Dunlop Oil & Marine Ltd, Bridgestone Corporation, Trelleborg Industry SA, Manuli Rubber Industries S.p.A. and Yokohama Rubber Co Ltd.
• The cartel is being investigated by the United States Department of Justice and criminal proceedings have been brought in the US against certain of the individuals involved in the cartel, which have led to guilty pleas and prison sentences for those individuals and guilty pleas by three cartelists (Dunlop, Manuli, and Trelleborg). Dunlop, Trelleborg, Bridgestone, Yokohama, and Parker ITR have each settled their US class action liability for a total of more than $21 million.
• In addition, the OFT brought criminal charges against two Dunlop executives and Peter Whittle, a former Dunlop executive who co-ordinated the cartel, in London under the Enterprise Act 2002, which led to prison sentences for the three individuals. There is a parallel European Commission investigation into the cartel which led to a decision fining the cartelists a total of €131 million in January 2009.


Background – the Parker ITR settlement

The settlement incorporates the following elements:

• Parker ITR has already paid an amount representing 16% of its sale of marine hose during the period 2002 to 2007, other than marine hose that was directly sold in US commerce, into an interest bearing escrow fund in London held with Citibank (Parker ITR was owned by other companies prior to 2002 – the pre-existing liability for the cartel remains with those companies);

• In return for giving up rights to sue Parker ITR and its parents or affiliates, purchasers of marine hose from Parker ITR, other than direct purchasers of marine hose in US commerce, can claim against the fund created by Parker ITR;

• An independent expert will determine how much of that fund goes to each Parker ITR purchaser;

• The presumption is that direct purchasers from Parker ITR during the period 2002 to 2007, other than direct purchasers in US commerce, will be entitled to 16% of purchases in the period unless they have passed on their loss;

• Purchasers from other cartelists will not be entitled to compensation from Parker ITR but, if settling, will obtain the benefit of extensive co-operation from Parker ITR in pursuing claims against other cartelists; and

• Claims are being administered by an independent claims administrator, FRA, which has already sent a first wave of direct mail notice to claimants and published notice in international and trade publications.

Accordingly, all who settle are entitled to the following from Parker ITR:

• Parker ITR has agreed to guarantee against the payment of adverse costs judgments associated with litigation subsequently initiated outside the United States against any of the co-conspirators; and

• Under wide ranging co-operation obligations, Parker ITR will make available interviews, declarations and affidavits, depositions, testimony at trial and production and authentication of documents that prove the cartel.

For further information on the settlement, go to www.marinehoseclaims.com or www.hausfeldllp.com/marinehose.

 

NOTES TO EDITORS

Hausfeld & Co LLP, led by industry doyen Michael Hausfeld, is widely recognised as one of the leading and best-known claimant law firms in the world. It is at the forefront of numerous innovative legal actions that are expanding the quality and availability of legal recourse for aggrieved individuals and businesses around the world.

The partners of Hausfeld LLP have obtained numerous landmark judgments and settlements for individuals and businesses, and have been champions for the private enforcement of competition and antitrust laws globally for almost four decades.

 

 

Related Case

» Marine Hose

 

Practice Areas: Antitrust / Competition