Five banks will face a £1 billion class action lawsuit in Britain for allegedly rigging the foreign exchange market between 2007 and 2013, lawyers said.  Barclays, Citibank, the Royal Bank of Scotland, JP Morgan and UBS will go before the competition appeal tribunal after earlier this year being found to have breached European Union law.

In May, the European Commission was added to a group of international regulators that has so far fined the banks more than $8.5 billion.  The commission held that the banks had exchanged commercially sensitive information and trading plans and co-ordinated trading strategies through two cartels.  The British tribunal claim is a collective action under the Consumer Rights Act 2015 and will operate on an opt-out basis, meaning that all eligible affected entities will benefit from any damages.

The company Michael O’Higgins FX Class Representative Limited has been set up to bring claim, with its director being the former chairman of the pensions regulator.  Mr O’Higgins has instructed Scott & Scott, a US law firm, to bring the action. The firm led a class action in the US against 15 banks over rigging the FX market, obtaining $2.3 billion in settlements nearly a year ago. Scott & Scott predicted that the class action would be joined by “tens of thousands” of entities, such as pension funds.  The lawsuit is backed by Therium Capital Management, a specialist third-party litigation funder.

Mr O’Higgins said: “The fines imposed on the banks by the European Commission were an important first step. But they will not compensate those who were damaged or suffered losses.  “Just as compensation has been won in the US, our legal action in the UK will seek to return hundreds of millions of pounds to pension funds and other corporates who were targeted by the cartel.”