The full focus of the Virgin Atlantic-British Airways battle switches to the US following an out-of-court settlement of the UK legal case.
Virgin accepted British Airways' offer to settle the case in early March with both sides picking up each other's legal costs. Unusual enough, but even stranger when Virgin appears to come out the loser. British Airways' total settlement to Virgin amounted to £365,000 ($590,000), but BA put its own legal costs at £750,000.
However Virgin's executive director legal affairs Frances Farrow says: 'We never said we would pay all of BA's legal costs. I do not expect to pay more than half of BA's estimate.' Farrow says BA offered to pay its own costs if Virgin would 'just drop the case and go away', but Virgin felt that the settlement was 'a point of principle' with BA 'admitting culpability'. BA denies its admission was related to the settlement, claiming it had 'accepted that months ago'.
British Airways had offered to settle the case with Virgin in January 1994 but Virgin refused. Farrow says the carrier was waiting for the US court to take a decision on British Airways' counterclaim to the US anti-trust case.
Early this year the US court ruled to allow Virgin to proceed with its case. At the same time, the judge scheduled to hear the UK case contacted Virgin to say the wording as it stood did not encompass switch selling, as Virgin's legal team had previously believed.
Limited to taking British Airways to court on the switch selling issue in only one jurisdiction, Virgin then opted to settle the UK case and concentrate its efforts on the US court case, explains Farrow.
Source: Airline Business
