Exclusive - Shippers Take Cargo Airlines & Forwarders to Court, Claiming €6.5 bn

Right on the heels of the legal action launched last January by DB/Schenker for alleged collusion and price fixing of air cargo surcharges by several international carriers, the airline industry should brace itself for yet another series of legal claims for the same offense.

Shippers of air freight are seeking huge compensations from carriers and forwarding agents  /  source: hs
Shippers of air freight are seeking huge compensations from carriers and forwarding agents / source: hs

This time, the European shippers are taking action with the filing of multi-party claims through specialised litigation law firms in Europe and the US. The total amount of the claims is expected to exceed €6.5b.

Many shippers are seeking compensation
In an exclusive interview with CargoForwarder Global, Joost van Doesburg, air freight policy manager of the European Shippers' Council (ECS) and secretary of the Dutch Council of Air Shippers (EVO), disclosed that "a large number" of his members in Europe have joined the Dublin-based litigation funding company, Claims Funding International (CFI) to seek compensation for alleged price-fixing activities by an, as yet unspecified, number of airlines.

CFI is the largest legal practice in Europe involved in multi party (class action) legal claims related to the transport industry. Van Doesburg said CFI commenced preparations for the recent case five years ago and has started meanwhile legal proceedings in Amsterdam with claims amounting to €5b.

According to the ECS/EVO official, another law group, Washington, DC-based Hausfeld LLC, has started proceedings in the UK, while a third law firm in Amsterdam, Omni Bridgeway, is currently following the process of the two other legal entities, but hasn't filed any claims in court. He estimated that the combined claims by these two law firms could reach €1.5b, bringing the combined amount of claims to €6.5b.

"It looks a bit fragmented, but there is a close contact between the three legal entities, including efforts to settle the claims with the airlines," said van Doesburg, who stressed that neither ECS nor EVO was directly involved in the litigation. "All participating shippers are acting entirely on their own behalf and do so anonymously and on a "no cure-no pay" basis," he said.

No cure-no pay arrangement
He explained that the individual shippers who have joined forces in their multi-party claims, are basically "selling" their claims to the law firms for 72.5% of the proceeds. The difference represents the potential fee for the law firms, if the claim is awarded. In case the claim is dismissed by the courts, the costs of litigation are borne by the law firms on the basis of the "no cure - no pay" arrangement.

Joost van Doesburg
Joost van Doesburg

The companies involved in the multi-party claims, are mostly based in Europe plus a few additional firms in the U.S. and represent a broad range of industries, including high-tec and pharma, explained van Doesburg.

He said that although the claimants wanted to remain anonymous to avoid repercussions, specific details, such as the type of industry and even the name of the company could become public if evidence, such as airway bills, would be presented in court.

Forwarding agents are targeted next
Asked which sectors in the transportation chain could still face further claims for price fixing, once the current legal action by the shippers is completed, van Doesburg hinted that freight forwarders could be the next target for the shippers.

"The fines of €97 million, which the European Commission imposed on a number of forwarders for collusive price fixing in 2012, including a €35 million fine for DB/Schenker, was a penalty by the government, so shippers didn't receive a cent from these fines," said van Doesburg.

As the government-imposed fines are separate from the compensation for damage, it is up to the shippers to directly file claims for compensation from the forwarders." said van Doesburg, adding that: "we were quite surprised by the legal action of DB/Schenker, because in our opinion DB/Schenker didn't experience any damage as they invoiced the total surcharges of the airlines to their customers, the shippers."

And in a reaction to an unofficial comment from Nippon Cargo Airlines that the airline had not financially settled their case with DB Schenker, van Doesburg noted that settling legal claims could also include providing specific information to the claimants. "You could say that smaller claims are being settled by providing certain information which in this case is of value to DB Schenker."

Nol van Fenema

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Comments: 2
  • #1

    Joost van Doesburg (Tuesday, 17 March 2015 17:57)

    The 6.5 Bn is not correct. Its much lower. And shipper have the opportunity to launch a claim against the freight forwarders but its very unlikely.

    The CFI claim was allready 5 years ago so its all a little bit old news. Esc an EVo ard both not involved in any claim.

  • #2

    Nol van Fenema (Wednesday, 18 March 2015 07:40)

    "The entire interview was taped and I used the figures which Mr van Doesburg mentioned - and repeated - in relation to the claims filed by CFI and the two other law firms. If, as he now claims, the figures are much lower, he should have mentioned this during the interview.
    He states that: "the shippers have the opportunity to launch claims against the forwarders, but it's very unlikely". Whilst he didn't mention during the interview that this action would be "very unlikely", I believe my comment that "van Doesburg hinted that freight forwarders could be the next target for the shippers." is a fair interpretation of what he actually said.
    Regarding Mr van Doesburg's comment that CFI's claim is already five years old, "so it's all a little bit old news", I specifically mentioned the "five years" in the article. However, more importantly, if it is such old news why was the industry generally unaware of these actions by the shippers?
    For the fact that ESC and EVO are not involved in the legal cases, I refer to the sixth paragraph in the article where I specifically mention that: "van Doesburg, (who) stressed that neither ECS nor EVO was directly involved in the litigation. "All participating shippers are acting entirely on their own behalf and do so anonymously and on a "no cure-no pay" basis," he said.

    Nol van Fenema
    Senior Correspondent Asia, CargoForwarder Global