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Air France/KLM Settles its US Air Cargo Cartel Claims for $87M but Offers its European Indirect Purchaser Victims Nothing

AIR FRANCE –KLM SETTLES ITS US AIR CARGO CARTEL CLAIMS FOR $87M BUT OFFERS ITS EUROPEAN INDIRECT PURCHASER VICTIMS NOTHING
 
Hausfeld & Co LLP and Claims Funding International plc (“CFI”) both express dismay at Air France-KLM compensating freight forwarders for the effects of the air cargo cartel whilst offering their European indirect shipper victims nothing.
 
Class Counsel in the United States, including international claimant law firm Hausfeld LLP (“Hausfeld”), has today announced an air cargo price-fixing settlement agreement with Société Air France – Air France, Koninklijke Luchtvaart Maatschappij N.V. – KLM -, and Martinair Holland N.V.
 
The airlines have agreed to pay an $87 million settlement to a class of direct purchasers of airfreight services in respect of liability under United States law for their acknowledged part in an air cargo cartel that breached competition laws around the world but have refused to offer their European indirect purchaser victims any compensation.  Airlines have already admitted to conspiring with competitors in order to fix fuel surcharges for air freight shipping services.  
 
The claims arise out of a global cartel in international air freight services which is believed to have occurred between January 2000 and late 2006. Both Air France-KLM and Martinair have pleaded guilty to price fixing to regulatory authorities in the US, Australia and Canada and were recently fined by the regulatory authority in South Korea. Substantial fines have been paid by both airlines and a Martinair executive, Frank de Jong, has been sentenced to serve 8 months in prison.
 
Under today’s US settlement, Air France-KLM has agreed to pay money exclusively to direct purchasers (such as freight forwarders) but has refused to compensate the many indirect purchasers of air freight services, including those in Europe, who have also suffered losses as a result of the cartel. Indirect purchasers are specifically excluded from the definition of those who will be giving up their claims. This allows shippers to whom Air France-KLM have denied compensation to pursue their claims and recover the full amount of their damages in other jurisdictions around the world.
 
Commenting on the settlement, Michael Hausfeld of Hausfeld LLP, one of the co-lead counsel in the US case and who has been appointed the co-lead counsel principally responsible for foreign law claims, said:
 
“This is an important settlement and a major step forward for Air France and KLM toward paying damages for their admitted price-fixing conduct. We now look forward to seeking appropriate redress for the indirect shippers who also suffered substantial unlawful overcharges as a result of the cartel.”
 
CFI has signed a large group of European claimants who spent more than €3.35b on international air freight during the cartel period. 
 
Volvo Car Corporation (VCC), represented globally by Hausfeld with respect to the airfreight matter, commented through its senior litigation counsel, Lars Bertler:
 
“As a major shipper of cargo on the airlines comprising this price-fixing cartel, VCC is pleased to be compensated by Air France for the economic damages we suffered for our US-related direct purchases. Yet we are disappointed that this global cartel member fails to compensate us for any of the shipments we made through an intermediary or for any of our non-US-related damages. So along with hundreds of other uncompensated victims in Europe and around the world, we intend to pursue our claims for all damages caused by the airfreight cartel.”
 
Today’s settlement follows on from an $85m price-fixing settlement secured in 2006 by US Class Counsel with German flag carrier Lufthansa on behalf of purchasers of air freight shipping services to, from and within the US. In this settlement Lufthansa did offer compensation to indirect purchasers of air freight.
 
Between them Hausfeld and CFI separately represent some US$5 to 6 billion of combined air cargo traffic purchased by shippers in the cartel period located on multiple continents, including several among the Fortune Global 500 and Forbes Global 2000, as well as both the Business Week and Interbrand 100 Best Global Brand. These companies have claims for compensation in Europe resulting from the loss they suffered as a result of the actions of the cartel. 
 
Hausfeld & CFI have signed a formal co-operation agreement to co-ordinate the pursuit of claims for shippers within the EU. 
 
Accordingly, Hausfeld and CFI have today written a demand letter to Air France-KLM demanding compensation for European victims of the cartel and CFI are set to institute proceedings in the Netherlands against Air France-KLM imminently.
 
British Airways plc already faces an action brought by flower importers and a growing group of other shippers in the English High Court by Hausfeld & Co LLP. Other shipper actions are pending in Australia, Canada, New Zealand and South Korea.
 
The European Commission has still not delivered a decision on the cartel despite having investigated it since December 2007.
  
Further information can be viewed at www.aircargoclaims.eu. or at http://www.claimsfunding.eu
 
 
About Hausfeld & Co LLP and Hausfeld LLP
 
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.
 
About Claims Funding International
 
Claims Funding International plc is a litigation funder specialising in multi party claims for the victims of corporate wrongdoing. It pays all the costs and assumes all the risk of the litigation in return for a commission, only if successful. Please visit www.claimsfunding.eu
 
Contact Peter Koutsoukis, Claims Funding International plc on +353872769443 mob or +35312374634 dir or email pkoutsoukis@claimsfunding.eu 
 
 
Related Articles
 
Potential settlement agreement putting an end to class action in the cargo section in the United States, KLM Press Release (July 12, 2010)
 
Air France-KLM Agrees to $87 Million Cargo Price Settlement, Bloomberg Businessweek (July 12, 2010)

 


 
 
 

 

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Practice Areas: Antitrust / Competition