Although involving a claim for $1,050 million, the litigation between Laker Airways Ltd. and transatlantic airlines has, so far, resulted in a decision which is probably only of small importance so far as English law is concerned.

The various Laker airline companies operated scheduled air services on the transatlantic route between 1977 and 1982. In 1982 their finances became overstretched and, after unavailing attempts at a rescue operation, the companies ceased trading and went into liquidation. The other scheduled transatlantic carriers were members of the International Air Transport Association (IATA). Between them there existed elaborate arrangements for co-operation involving through-bookings for carriage by different airlines, interchangeability of tickets, co-ordination of timetables, uniform fares, and so on. Laker did not become a member of IATA. It challenged the whole IATA system by instituting a low-cost, no frills “skytrain” service in each direction at one-way fares which covered carriage only and, at the beginning, were little more than one third of the price of the one-way fare then being offered for travel by the IATA airlines. The IATA airlines considered that their pay-loads were being endangered by Laker’s skytrain policy. They introduced fares substantially lower than their uniform standard fares for the lowest class of travel and approximately matching those charged by Laker. The passengers on the IATA airlines had the advantage of the collaborative arrangements of IATA and the fares charged were inclusive of “in-flight” amenities, for which extra charges were made by Laker.

After its liquidation, Laker brought proceedings in the Federal District Court of the District of Columbia against a number of IATA airlines, including British Airways and British Caledonian. Laker’s claim alleged two causes of action. First, under the Clayton Act, Laker claimed threefold damages for injuries caused to it by unlawful combination and conspiracy between the defendants in restraint of and to monopolize trade or commerce contrary to ss. 1 and 2 of the Sherman Act. The claim was quantified at $1,050 million, being three times the compensatory damages, alleged to amount to $350 million. Secondly, Laker claimed damaged for what was described as an “intentional tort”, alleging the same facts as in the anti-trust claim. The damages claimed were $350 million, together with punitive damages amounting to $700 million.

The British Airways Board and British Caledonian brought proceedings in the High Court in London in which they sought an injunction to restrain Laker from proceeding with its action in the United States. At first instance, Parker, J., refused to grant the injunction sought. His decision was reversed by the Court of Appeal, which considered that certain directions given by the Secretary of State for Trade and Industry under the Protection of Trading Interests Act 1980 after the decision of Parker, J., had produced “a wholly different situation”. In the House of Lords, counsel for the plaintiff airlines expressly disclaimed reliance on this decision of the Court of Appeal. The House of Lords regarded both of the arguments based on the Secretary of