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Last Updated: Friday, 16 November 2007, 12:40 GMT
Compensation battle looms for BA
BA plane at Heathrow
BA was forced to ground flights in preparation of a strike in January
British Airways (BA) may be facing a bill for millions of euros after paying compensation to travellers affected by planned industrial action.

Dutch firm EUClaim has said it plans to take BA to court in the Netherlands in order to win compensation for "all passengers" affected by the problems.

BA said it was surprised by the move, as there was a confidentiality clause and it had not admitted liability.

The case stems from a planned walkout by BA cabin crew in January.

BA declined to comment on a report in the Times newspaper that it had paid the travellers 430 each for cancelling their flights.

The airlines' shares fell 14 pence, or 3.9%, to 345.25p in London during morning trading.

Damages paid

January's industrial action was eventually called off and flights reinstated, but too late for many passengers to change the alternative travel plans that they had made.

After months of negotiations, BA initially agreed to pay damages to three passengers who were stranded in Cape Town after their BA flight to Amsterdam was cancelled on 2 February as a result of the proposed strike.

We don't believe that under the EU DBC - denied boarding compensation - regulations we are liable
British Airways

However the threat of court action from EUClaim comes after BA agreed to compensate more passengers, but only if they agreed to a confidentiality clause, the Dutch company said.

The firm alleges that the terms of the confidentiality agreement were so strict that the passengers would not even have been able to discuss the details of their settlement with their respective partners.

EUClaim's chief executive Hendrik Noordehaven told the BBC that the company had rejected the compensation offer as a result of the strict terms and planned to file a lawsuit against BA as soon as next week.

The aim of the court case was to prove that all passengers affected by the industrial trouble at the start of the year were eligible for compensation.

Should they win the case, then it would also create a legal precedent that would have a significant effect on how airlines based within the European Union deal with industrial disputes, Mr Noordehaven said.

EU regulatons

EUClaim said that they have a case against BA under European Union regulations.

It said that an airline can only cancel a flight up to two weeks before departure, without having to compensate its passengers to a value of as much as 600 euros (429), if there are "extraordinary circumstances".

In the case of BA, the cabin crew strike action had been publicly announced after an expiration of a labour contract, Mr Noordehaven said.

"The problem for British Airways is that a strike caused by failing collective labour agreement negotiations cannot be seen as an extraordinary circumstance," he added.

BA argues that the threatened strike was an "extraordinary circumstance".

The airline said: "We don't believe that under the EU DBC - denied boarding compensation - regulations we are liable."

It added that: "We have settled this claim for a handful of people with the Dutch company EUClaim without admitting liability.

"As normal in these circumstances there is a confidentiality clause attached."

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