Neutral Citation Number: [2015] EWHC 2201 (Ch)

Case No: HC2008000002

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 22/07/2015
Before:
THE HONOURABLE MR JUSTICE PETER SMITH
--------------------Between:
Emerald Supplies Ltd
- and British Airways

Claimants
Defendant

----------------------------------------Mr Harris QC and Mr Rayment and Ms Blackwood (instructed by Hausfeld) for the
Claimants
Mr Turner QC and Mr Patton (instructed by Slaughter & May) for the Defendant
Mr Daniel Jowell QC (instructed by (Hogan Lovells International LLP, Linklaters LLP,
Latham & Watkins LLP, Wilmer Hale LLP, Squire Patton Boggs (UK) LLP and Wood
Mallesons LLP) for the Part 20 Airlines
Mr Greene (instructed by (Edwin Coe) for La Gataina
Hearing date: 22nd July 2015
---------------------

THE HONOURABLE MR JUSTICE PETER SMITH

Approved Judgment

Emerald v BA & Ors

JudgmentPeter Smith J:
INTRODUCTION
1.

This is a very complicated action. The lead action has over 300 claimants, one
defendant, British Airways, and I think 20 Part 20 defendants brought in by
British Airways.

2.

There is a separate action which is linked with this, which has more.

3.

There is a third action where Mr Turner QC, who appears for BA today, together
with Mr Patton, tells me that the 65,000 figure of claimants in that case might
have reduced to the modest figure of 5,000 claimants; without any class action
orders. That was tried but rejected and on appeal to the Court of Appeal was
unsuccessful.

MY POSITION
4.

I have been the nominated judge in this case since November last year. I have
been involved in the case since March of last year. When this case first came in
front of me in March of last year, I suggested to the parties very early on that it
was appropriate to have a nominated judge to deal with the hugely complicated
interlocutory applications which arise. When I said so, I said I was not bidding
for the case, because no judge really would look upon this case with enthusiasm
because he or she would be in a no-win situation, as this case has demonstrated.

5.

Since then I have heard numerous application, made numerous rulings. There are
currently two outstanding, I think, appeals against some of my decisions. There is
a CMC listed for three days next week. There is a separate hearing listed
in October for a strikeout of the Bau Xiang, of other litigation and various other
matters. There have been huge interlocutory orders, circulating mostly around the
attempts to come up with some form of redacted decision that the European
Commission made as long ago as five years now, but which is still not published,
and my last recollection is that it was not promised before 2020. A point which I
probably met with indifference, and probably half the Bar before me as well.

THE PROBLEM
6.

On 30 April, I booked a return ticket to Florence with the first defendant. On

6 July, I flew to Florence, together with my wife, due to return on 10 July. On
10 July, as I have set out in my emails, the flight was delayed for two hours
without any explanation. Six people were then summoned to the departure desk
and were told that they were bumped off the flight. It turns out that they were the
lucky ones, because they got their luggage back then, unlike anybody else in the
flight.

7.

The rest of us were then rushed to the aeroplane. Somewhat intriguingly, as

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Emerald v BA & Ors

I have said in my email, we were sitting right next to the plane while it was
refuelling for 20 minutes. It might be a standard practice in Florence, I don't
know. It might be a standard practice for the accompanying fire tender to arrive
after the refuelling is completed. Anyway, we were then put on the plane and the
pilot said that they had been moved to another runway and the load had had to be
adjusted because of the crosswinds, and that was it.
8.

We arrived at Gatwick, hung around in the baggage claim, as people do at

Gatwick, for 45 minutes and then we were told to go to Global Recoveries, where
we were told for the first time that the entire flight's luggage had been left behind.
No explanation, no representative, nothing. Nothing from BA. Nothing from
Vueling who provided the flight.

9.

I saw the distress that lots of people suffered as a result of that; and I contacted
BA customer relations, who simply said: it was a Vueling flight, you will have to
take it up with Vueling. That is all they said.

10.

Vueling were no better. In fact, they were worse, for the reasons I have said in
argument. Vueling refused to acknowledge my communicating with them until
a computerised individual number went onto their system. As I said earlier, it
never did. The luggage arrived spontaneously and without warning on
Wednesday last week.

11.

I signed my emails as my judicial capacity to alert the Chairman to the fact that this
was not merely an issue of a disgruntled consumer. For reasons which I set out
below was essential that his office knew about the proceedings and those conducting
the proceedings knew about the complaint. I also advised him to contact the lawyers
conducting this litigation on BAs behalf.

TRUE ISSUE
12.

This is not an issue over luggage, however. It never has been. I was concerned
about as Mr Turner QC rightly says, BA's conduct in dealing with that flight -- or
Vueling's conduct, which as far as I can see BA take responsibility. They are in
the same group of companies, my contract was with BA, BA charged me and I got
a BA flight number -- if it was not explained, it might be something that is
strikingly similar to some of the allegations in this case.

13.

The reason I was concerned really ought to have been blindingly obvious,
although some of the submissions by Mr Turner QC today would suggest
otherwise. The situation is that I do not know how a plane departs with all of the
passengers' luggage left behind, unless that is a deliberate decision. It is an easy
enough question to pose and it ought to be an easy enough question to answer.
We are now 12 days from the flight and I have no explanation, and Mr Turner QC
and the team who instruct him have deliberately refused to enquire, to provide me
with an answer, praying in aid a desire to separate what they call a private dispute

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Emerald v BA & Ors

from this judicial dispute. This is not possible but could have been easily resolved
had BA and its advisors wished it. This if correct was similar to some of the
allegations in this case. If correct I would have had to recuse myself as I made
clear in argument.
BAS FAILURE TO ANSWER
14.

BA must know what the position is. I am promised some form of answer, by
Mr Turner QC, in the normal course of events with expedition. Well, I am 12
days down the line and if those simple questions cannot be answered in 12 days
with expedition, I really feel for other people who have the misfortune to fly with
BA. It is unexplained.

15.

Equally, I do not see how the pilot can take off and not know the luggage isn't
there. Equally, I do not see that the ground staff can conduct themselves in the
way they did with us and not know that the luggage was not going.

16.

In my email to the chief executive, which was the only way forward, having been
rebuffed by customer relations, I said that I didn't see how there was any logical
explanation for those.

17.

I remain of that view. Of course, I do not operate airlines. There might be

a logical explanation. I am surprised, if there is a logical explanation, that it hasn't
been forthcoming in the last 12 days. I do not believe there is a logical
explanation. I believe that the passengers' luggage was deliberately bumped off
for a more profitable cargo.

18.

I hope BA can write back, if they were to write back and tell me that that is not so,
because if that is so, my investigation will carry on in a private capacity -- where
that ends up, I don't know yet, but it will -- which I will pursue with the vigour for
which I am known, because I am no longer involved in this case.

CONSEQUENCES
19.

When this problem arose, I immediately realised there would be a conflict,

potentially, depending on why the luggage did not go the way it should have done.
So I sent an email to the chairman, having been rebuffed by customer relations.
I did so in the knowledge that the chairman, Mr Williams, has repeatedly said in
public that he wants to introduce a new openness policy in BA and put behind him
all the disputes that have taken place in the past. Therefore, for example, in
an article, in that well known journal "Accounting and Business UK",
dated July 2013, he said this:
"In rising to all these challenges [that is the competition's],
then what are the buttons and controls that Williams can
push and pull in the BA cockpit? His first answer seems

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Emerald v BA & Ors

almost startlingly laid back. 'I spend a lot of my time

reading what the customers are telling me and I spend a lot
of my time out in the business finding out what the business
is telling me.' Clearly, then, he is not one for imposing his
own ideas. 'The internal culture and the external culture of
the company need to meet around good customer service',
he adds, noting that his customers might write to him about
almost anything, 'the lounges, the food, the luggage,
anything. We learn from that'. At least, unlike the storms
that pilots always try to avoid, Williams and the rest of the
BA management can try to actually do something about any
turbulence that customers highlight. 'I resurrected BA's
motto: to fly, to serve. To me, that summed up what we are
about. Everything should be aimed towards the customer'."
20.

Well, there we are. That is what he says when he is giving interviews to

journalists. I have not had any communication from him in the ensuing 12 days.
I have had a number of holding emails, that is all.

21.

What could I do? I do not accept Mr Turner's fundamental proposition that as

soon as I had complained with the chairman and drawn to his attention the
litigation, that meant there would be immediately a perception of bias.
I fundamentally disagree with that, for the following reasons.

22.

It would be quite wrong, in my view, to conduct the complaints procedure without

telling those dealing with it who I was and the particular association I had with
BA. That would not be to secure an advantage. I have made it clear all along that
I am not interested in the loss of luggage. I might have been, if it had not arrived,
but Vueling told me how I could claim, which would have meant no claim really
at all when you have filled in all the forms. I was concerned that they did not do
things which might cause me difficulties in this case.

23.

Conversely, I do not, with respect to Mr Turner QC's valiant submissions, accept

for one minute that I should not have told his team that I had a dispute. I posed
the question to his solicitors, which of course they didn't answer in the
correspondence, how they would have reacted if I had carried on and said nothing,
and heard the CMC next week, while I was still in dispute with BA over the
questions to be answered. I think you only have to say it. The first things they
would have done is would have applied, (a) for me to recuse myself and, (b)
undoubtedly, to set aside all the orders that I had made, because it was at a time
when I was apparently biased against BA.

24.

It is impossible to keep the two separate. That is not to say that I should ever use
the litigation to try and get better treatment or better return of my luggage. I have
made it clear all along to the lawyers that I was not concerned about that. I was
concerned about why because of the potential similarity between claims in this
litigation and the claims in respect of the luggage and the fact that the entirety of

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Emerald v BA & Ors

the passengers luggage was left behind.

25.

So, at the earliest opportunity (on the following Monday), I called in the lawyers
into my room and explained the position to them.

A REASONABLE OBSERVER
26.

I do not believe for one minute that the reasonably minded observer, which is the
test, as Mr Turner has reminded me of, would think that merely because I have
raised issues over the non-delivery of my luggage of itself should lead to the
possibility of bias.

27.

I believe a reasonably minded observer would see a Judge with a problem trying
to resolve that issue and finding the parting question being obstructive and
unwilling to address the issue and find a solution. A simple dispute as to the
luggage cannot possible be grounds for recusal. However BA and its solicitors
have simply escalated the problem almost immediately.

28.

As I have said in argument, it has been open to BA in this case simply to damp the
fires of this dispute immediately, by coming up with an explanation of
an operational nature as to why the luggage was not sent. They have not done it
despite me giving them the earliest opportunity to do so.

REACTION BY BA AND ITS SOLICITORS

29.

The solicitors and the person apparently instructing them have adopted a three
wise monkeys approach which I found, frankly, astonishing. The reason
I conclude they do that is because they don't want to know the answers, because it
might affect them. And the reason why BA have not replied, I conclude,
is because there has been some kind of operation designed to maximise profits at
the expense of their regular customers. Further I am satisfied they want to
exploit this situation to pressure me into coming off the case.

30.

Judges spend all the time drawing conclusions from people's actions; and the like;
the taking off with no luggage and the knowledge of the pilot, I find it impossible
to believe that if those instructing Mr Turner QC wanted to, they could not have
found out what the answer was to this in good time. And having seen me on
Monday, it would have been perfectly easy for them to write and say, "Thank you
for drawing it to our attention. We have spoken to the operations and the luggage
had to be left behind, we regret, for this, this and this", and that would have been
the end of the matter. I had of course brought it to their attention as soon as
practicable on the Monday.

31.

But they didn't do that. Almost within a matter of hours of the meeting, they
decided that I should recuse myself.

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Emerald v BA & Ors

32.

Now, I do not accept that the correspondence justifies that application. And I am
afraid to say that it is, in my view, an opportunistic application, made by a party
that has wanted to get me off this case before.

33.

I would remind the parties that even before the case was allocated to me,
Mr Turner expressed a view in open court spontaneously that his clients did not
think I was capable of dealing with the CMC in this case because it represented
difficult issues of competition law, of which It was alleged I had no experience.
His client's major difficulty was that I had been an allocated judge for four years
in the Competition Appeals Tribunal, although I had not actually sat on any cases.
But presumably if the Lord Chancellor thinks I am competent to sit there, that
really ought to be enough, even for Slaughter and May, but apparently it isn't.

34.

And when the parties finally followed up the suggestion that they apply to
nominate a judge, they actually wrote [the Chancellor] should not appoint Mr
Justice Peter Smith. That was an unfortunate letter for them to have written
because it held a gun to the Chancellor's head, but as the Chancellor rightly
observed, there are no competition issues of significance left in this case now.
There is either a common law claim for conspiracy, and in that regard I am
probably the most experienced judge in the division dealing with those cases, and
there are issues as to damages that might flow from an already admitted breach of
competition law.

35.

The interesting competition issues, I think, have already been dealt with. They are
in the Court of Appeal. Their consideration of Pergan with the law of reality is
something that might well be interesting.

RECUSAL
36.

So the Chancellor took the correct view. In my view, this was a renewed attempt
by BA to get me off the case and they have succeeded. Why have they succeeded,
when I do not believe there are any legitimate grounds for making the
application?

37.

The simple fact of the matter is the way in which BA have approached it. I had
a meeting with the lawyers as soon as I possibly could. The matter, in my view,
could have been resolved quite quickly by proper investigation. Instead BA
decided, through their lawyers, that I should immediately recuse myself and went
down that road immediately. That, to my mind, is unfortunate. On many
occasions during this case, when I have been case managing it, I made it clear that
cases as complex as this require every lawyer, irrespective of their duty to their
clients, to attempt to work together so that the case can be driven to court. This
case is now seven years old and we have not even closed the pleadings. That is
scandalous. The parties might say with fairness that not a lot of that is necessarily
due to them, a sentiment with which I would agree. We all know where it lies.
But there has certainly been exploitative attempts in relation to some of the

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difficulties.
38.

But I have always tried to emphasise that the lawyers really ought to smooth the
way. In my view, this could have been very easily smoothed out; unless, of
course, BA have been caught out; in which case, of course, if they had just told
me, then I would have come out of the case immediately. But they have not done
that.

39.

So the question then is: what should I do? Well, Slaughter and May wrote to me
on Monday, requiring me to confirm immediately that I would recuse myself,
failing which they would make an urgent application to the Court of Appeal. This
litigation is complex enough, without those distractions. It is of no interest to the
other parties, who have all had to come here today, to have a proper application
made and a decision made. And that has a cost consequence which will probably
be irrecoverable, and it is a matter of great regret to my mind that the parties have
been inconvenienced for no apparently good or acceptable reason. It would not
be appropriate for a recusal application to be acceded to as a result of an exchange
of private correspondence.

40.

This would lead to a waste of a lot of judicial resource time in addition to the
parties it will also slow progress of the case which I have been attempting to
progress. I am afraid BA are not in my view really interested in progressing the
matter expeditiously for obvious reasons.

41.

I however cannot allow my presence in the case and its difficulties to distract the
parties from this case. And therefore, regretfully, I feel that I have no choice,
whatever my feelings about it, but to recuse myself from the case, and that is what
my decision is; not for the reasons put forward by BA, but for the reasons that
I have said.

42.

So I will recuse myself. I will vacate the hearing next week; and I shall not direct
it to be fixed before the most convenient date as suggested. I shall direct that the
parties shall attend on 2 October for directions from the newly appointed judge as
to the further conduct of this case. I shall also require the parties to make
an immediate application to the Chancellor to appoint a substitute judge; and to
tell the Chancellor that I have directed that the first hearing of the case by that
newly appointed judge should take place on 2 October.

43.

I will, if necessary, adjourn the application that BA issued, I think, yesterday for
a strikeout in the Bau Xiang litigation as well, to be considered as part of the other
matters which the judge will be required to do. And I will make no order as to
costs.

44.

This is a regrettable but necessary decision caused in my view entirely by BAs

attitude and determination to achieve a result which is nothing to do with the
problem. It is a regrettable feature that some litigants now regard a recusal

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Emerald v BA & Ors

application as one of the tools they can deploy in aid of their case. BA has finally
achieved its aim. Neither of their attacks was in my view justified but ultimately
they were successful for the reasons given.