Legal Business – U.K.
In anticipation of a boom in competition-based disputes as the Consumer Rights Act comes into force, US firm Scott+Scott is planning to kick-start its City offering by pursuing banks found guilty of manipulating the foreign exchange market in a multi-million pound lawsuit.
The Connecticut-based litigation boutique hired Freshfields Bruckhaus Deringer competition litigation lawyer Belinda Hollway to head up its first City office and European base, which will officially open on Chancery Lane once authorisation is granted by the Solicitors Regulation Authority.
Hollway, who officially joined the US firm earlier this week [7 September], is already preparing the practice’s first City-based forex-case. ‘We can’t commence litigation until authorisation, but we are doing the preliminary work and setting up the office. The first case will be the forex manipulation. We are speaking to lots of businesses that were trading and suffered losses, and the number of businesses that have had exposure will be in the hundreds and thousands. This litigation is very wide-reaching,’ Hollway told Legal Business.
The class action is aimed at banks including The Royal Bank of Scotland, Barclays and JP Morgan, as part of follow up litigation from a recent $2bn forex antitrust settlement in the US, where Scott+Scott led a proposed class action that accused 16 banks of widespread manipulation in the $5.3trn-per-day foreign exchange rate market.
‘Most of the UK’s domestic firms [with an antitrust component] traditionally work on the defence side so there is conflict that leaves a hole in the market,’ said Hollway. ‘Scott+Scott also has the advantage of its experience in the US where we already have systems like class actions in place.’
With the Consumer Rights Act set to come into force on 1 October this year, which will make it easier for private parties, in particular SMEs and consumers, to bring actions for breach of competition law, the London market is becoming an increasingly attractive platform for antitrust-litigation focused firms.
In addition, the European Commission last year adopted the directive on antitrust damages actions aimed at helping citizens and companies claim damages if they are victims of infringements of EU antitrust rules, such as cartel behaviour or abuse of dominant market positions.
Scott+Scott managing partner David Scott (pictured) said: ‘The Consumer Rights Act is going to provide class remedy. It will go a long way towards allowing consumers that have been harmed as a result of violation in competition laws to seek redress. It will provide opportunity for those with smaller losses to get their money back and that is a good thing.’
But Scott+Scott is not the only firm eyeing up this opportunity. Specialist claimant competition shop Hausfeld & Co, which led alongside Scott+Scott in the recent US Forex class action, hired antitrust lawyer Anna Morfey, also from Freshfields, to strengthen its European practice and opened its second European office in Brussels last year with the hire of former Michelin-Europe general counsel Laurent Geelhand.
However, Hausfeld did lose competition litigation partner Boris Bronfentrinker – who also worked at Freshfields for seven years – who quit to join Quinn Emanuel Urquhart & Sullivan as it launched its City-based antitrust practice last year.
Hollway added: ‘This is a very exciting time to practise competition litigation in Europe as the European Commission adopts the competition damages directive and with the consumers act coming into force in October. There is a real interest from lawyers on the defence side to move onto the claimants side.’