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REFILE-British Airways price-fixing trial collapses

LONDON, May 10 (Reuters) - The trial of four senior British Airways executives accused of price-fixing with Virgin Atlantic collapsed on Monday when prosecuting lawyers said they would not be offering any evidence. Competition watchdog the Office of Fair Trading (OFT), bringing the first such prosecution of allegations of dishonest collusion between the two airlines, had failed to disclose key documents to the defence over several years, London's Southwark Crown court was told. On Friday it emerged a year's worth of emails had been discovered, including one, from March 2005, which showed Virgin had increased its fuel surcharge before speaking to anyone from British Airways, Britain's Press Association reported. This suggested the increase had not been the result of price-fixing or dishonest collusion, the court was told. Richard Latham, prosecuting on behalf of the OFT, said that after reconsidering their position over the weekend they would now be offering no evidence against the BA executives. He said the documents would have had an "appreciable impact" on the evidence of key prosecution witness Paul Moore, Virgin's director of corporate affairs, who was granted immunity by the OFT in return for giving evidence against BA. Of the 70,000 emails found last week which had not been disclosed, some 12,000 were sent or received by Moore, "the central plank of the prosecution case", he said. CORRUPTED FILES BA said it was pleased the defendants had been acquitted, adding while the contact between its employees and their Virgin counterparts had been inappropriate, consumers had not suffered as a consequence. "We have never believed the information provided to the OFT at the outset of this case would be strong enough to bear scrutiny in a criminal court," a spokesman said. BA's former commercial director Martin George, sales and marketing director Andrew Crawley, former head of communications Iain Burns, and Alan Burnett, who led BA's sales in Britain and Ireland, had all denied the charges. The missing emails were in corrupted files which had been dismissed as irrelevant during the initial investigation, the court was told, but last week it had emerged they could be repaired and contained a "large quantity" of emails. Prosecuting lawyer Latham said it would be not be "logistically possible" to disclose the documents in time for the trial to begin. "We have been driven to accept that it would be wholly unsatisfactory to call Mr Moore today or in the immediate future," he said. Last month the OFT said it was also investigating allegations that Cathay Pacific and Virgin, part of billionaire Richard Branson's Virgin Group, may have illegally co-ordinated prices for passenger flights between London and Hong Kong. (Reporting by Kylie MacLellan and Rhys Jones; Editing by Mike Nesbit) ((kylie.maclellan@thomsonreuters.com; +44 207 542 0401)) Keywords: BA VIRGIN/TRIAL * OFT says Virgin could lose immunity from penalties * Virgin says no grounds for immunity to be withdrawn (Adds Virgin Atlantic reaction) LONDON, May 10 (Reuters) - The trial of four senior British Airways executives accused of price-fixing with Virgin Atlantic collapsed on Monday when prosecuting lawyers said they would not be offering any evidence. Competition watchdog the Office of Fair Trading (OFT), bringing the first such prosecution of allegations of dishonest collusion between the two airlines, had failed to disclose key documents to the defence over several years, London's Southwark Crown court was told. On Friday it emerged a year's worth of e-mails had been discovered, including one from March 2005 which showed Virgin had increased its fuel surcharge before speaking to anyone from British Airways, Britain's Press Association reported. This suggested the increase had not been the result of price-fixing or dishonest collusion, the court was told. Richard Latham, prosecuting on behalf of the OFT, said that after reconsidering their position over the weekend they would now be offering no evidence against the BA executives. He said the documents would have had an "appreciable impact" on the evidence of key prosecution witness Paul Moore, Virgin's director of corporate affairs, who was granted immunity by the OFT in return for giving evidence against BA. Of the 70,000 e-mails found last week which had not been disclosed, some 12,000 were sent or received by Moore, "the central plank of the prosecution case", he said. However, the OFT said it would be reviewing the role played by Virgin Atlantic and its advisers in light of the airline's obligations to provide the OFT with continuous and complete co-operation and said this could have potential consequences for Virgin's immunity from penalties. Virgin Atlantic responded by saying it had fully assisted the OFT throughout the process and denied any suggestion it had not complied with its obligations as an immunity applicant. "At no point did Virgin Atlantic withhold evidence. We believe therefore there (are) no grounds for immunity to be withdrawn," the airline said in a statement. CORRUPTED FILES BA said it was pleased the defendants had been acquitted, adding while the contact between its employees and their Virgin counterparts had been inappropriate, consumers had not suffered as a consequence. "We have never believed the information provided to the OFT at the outset of this case would be strong enough to bear scrutiny in a criminal court," a spokesman said. BA's former commercial director Martin George, sales and marketing director Andrew Crawley, former head of communications Iain Burns, and Alan Burnett, who led BA's sales in Britain and Ireland, had all denied the charges. The missing e-mails were in corrupted files which had been dismissed as irrelevant during the initial investigation, the court was told, but last week it had emerged they could be repaired and contained a "large quantity" of e-mails. Prosecuting lawyer Latham said it would be not be "logistically possible" to disclose the documents in time for the trial to begin. "We have been driven to accept that it would be wholly unsatisfactory to call Mr Moore today or in the immediate future," he said. Last month the OFT said it was also investigating allegations that Cathay Pacific and Virgin, part of billionaire Richard Branson's Virgin Group, may have illegally co-ordinated prices for passenger flights between London and Hong Kong. (Reporting by Kylie MacLellan, Rhys Jones and Matt Scuffham; Editing by Mike Nesbit and David Holmes) Keywords: BA VIRGIN/ (kylie.maclellan@thomsonreuters.com; +44 207 542 0401) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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