Monday 11 July 2011, 11:15 | By

Judge knocks back Ticketmaster delivery fees settlement

Legal Music Business Top Stories

Ticketmaster

A Californian judge last week rejected an out of court settlement regarding a class action lawsuit against Live Nation’s Ticketmaster, meaning the whole case could now go to trial this autumn.

As previously reported, way back in 2003 two Americans called Curt Schlesinger and Peter Lo Re sued Ticketmaster, claiming the ticketing giant had misled customers by implying in its marketing materials that “delivery fees” added to ticket purchases were simply a cost of sale, ie what it cost Ticketmaster to deliver tickets. In fact, a profit margin was included so the fee was a revenue. Given the size of the delivery fees (up to $25) that was probably a given, but the plaintiffs reckoned the ticketing firm was at fault for not explicitly stating so.

The case, which became a class action last year, was due to go to court in January, but an out of court settlement was reached, in which anyone who believed (and could prove) they had been misled could claim a small refund or discount on future purchases. Live Nation set aside $22.3 million to cover any claims.

But LA Superior Court Judge Kenneth R Freeman last week turned down the settlement, saying it wasn’t big enough and that the proposed deal “offered virtually no benefit to the class member” (ie anyone who made a claim). The whole thing is now likely to go to court in October, which is something Live Nation could do without. Aside from the fact that, if they lose the court case, the prescribed pay out could be significantly higher, it will also shine a new spotlight on the add-on fees ticketing agencies and the live sector at large add on to ticket prices, which have been increasingly controversial of late. The live music conglom is yet to respond to last week’s ruling.

In related news, the live firm is still suing its insurers Illinois Union Insurance Co in relation to this case after the insurers refused to pay the $4 million in legal fees the live music and ticketing giant has run up in relation to it.

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