Air freight damages claim struck out as “irresponsible” and lacking in authority

The High Court has struck out claims against British Airways for damages allegedly arising from the air freight cartel on the basis of lack of authority.  The claim was issued on behalf of 64,697 claimants, all members of the Chinese Chamber of International Commerce (CCOIC), an organisation that issues certificates of origin when goods are exported from China.

The claim form, particulars and statement of truth were signed by a then partner of the law firm Hausfeld & Co.  The High Court found that none of the claimants had authorised Hausfeld to bring the proceedings at the time the claim form was issued.  The claim was not salvaged by the argument to the Court that 362 members had subsequently expressly ratified the launch of proceedings on their behalf.

The High Court considered alternative submissions from British Airways and accepted that it would also have been appropriate to have struck out the claim as an abuse of process.  This was on the basis that the evidence showed that there were “no grounds for believing at the time [Hausfeld] issued proceedings that any particular claimant had shipped air freight over the relevant period”.  This included some claimants with activities in advertising, investment and banking.  The Court added that those parties may have only signed up for membership because they wanted to apply for a certificate of origin, rather than to authorise a foreign law firm to bring a claim on their behalf in another jurisdiction.

The Court was not sparing of its criticism and described the express ratification letters as “highly misleading”.  The case underscores the lawyer’s duty to satisfy themselves of the accuracy of pleadings and the potential perils when bringing claims on behalf of a large and geographically dispersed class.

Bao Xiang International Garment Centre and Others and Others v British Airways Plc [2015] EWHC 3071 (Ch)