'Failings' led to collapse of BA price-fixing trial

The OfT, which was bringing the first such prosecution over allegations of dishonest collusion between the two airlines, failed to disclose key documents to the defence over several years, Southwark Crown Court in London was told.

Prosecutors offered no evidence yesterday after reconsidering their position over the weekend.

The embarrassment came after the OfT dropped allegations against supermarket giant Tesco last month when new evidence emerged which meant there were "insufficient" grounds to continue.

Last Friday, trial judge Mr Justice Owen said he had given "anxious consideration to the question of whether the manifest failures on the part of the prosecution are such as to render a fair trial impossible" over the allegations of price-fixing between BA and Virgin.

He ruled that he was not entirely satisfied that was the case and, allowing the trial to continue, said the "question of whether the prosecution has been fatally compromised is likely to be illuminated by evidence from one or more of the Virgin witnesses".

But Richard Latham QC, prosecuting on behalf of the OfT, said their position was reconsidered over the weekend and they would now offer no evidence against the BA executives.

During legal arguments on Friday, the court was told that a year's worth of emails were discovered last week which went to the heart of the prosecution's case.

In particular, an email dated March 21 2005 emerged which suggested that Virgin decided to increase its fuel surcharge to 6 instead of 5 before speaking to anyone from BA.

In effect it suggested no price-fixing or dishonest collusion took place between the two airlines with regard to that increase, the court was told.

Clare Montgomery QC, defending BA's one-time commercial director Martin George, said it was "an extraordinary state of affairs".

She added: "It demonstrates that the trial has been irredeemably flawed by the OfT, (Virgin's solicitors) Herbert Smith and Virgin to the point that there's no reliable evidence."