Hannah Clipston, Partner for the hotels & leisure team at leading law firm Thomas Eggar LLP, comments: “Qantas maintains that its commercial settlement discussions with Rolls Royce are continuing. However, it is inevitable that this development will increase the pressure on Rolls Royce. As will recent confirmation from the Australian Transport Safety Bureau that it has found a problem with the manufacturing process for some of the engines fitted to the A380.
“It will be interesting to see how Rolls Royce reacts. The Rolls Royce share price has inevitably been damaged by the latest news and its international reputation continues to disintegrate. In legal terms, the contract between Qantas and Rolls Royce will continue to be heavily scrutinised by the lawyers, particularly the clauses that deal with the types of loss that can be claimed and what cannot. Rolls Royce will also be considering the possibility of other potential claims from Airbus, Lufthansa or Singapore Airlines. Ultimately, Rolls Royce may well consider that a global settlement deal is the best option at this stage to limit any further damage to its brand.”