Source: The Economist | Author: Patrick Lane

Banks are in the frame for Britain’s latest collective-action claim

THE LAUGHING stopped long ago.  Between 2007 and 2013, in online chatrooms called “Three Way Banana Split”, “Essex Express ’n the Jimmy” and other rib-ticklers, currency traders yapped about all sorts of things—including market tactics.  The banter has cost their employers dear.  Banks have been fined over $10bn for market-rigging by American and European regulators, including €1.1bn ($1.2bn) by the European Commission in May.  An American class action cost 15 banks $2.3bn.  But a lawyer’s work is never done. On July 29th Scott+Scott, an American law firm, filed a collective-action case at the Competition Appeal Tribunal (CAT), an antitrust forum in London.

Cases like this are still a novelty in Britain, despite a theoretically helpful change in competition law in 2015.  Collective claims may now be brought to the CAT on an “opt-out” basis, in which members of a specified class are included in the claim unless they choose not to be.  If a monopolist rips off its customers, it may do a lot of harm in total, but the damage to each may be small.  Given the cost of going to court, many may not bother suing.  But the easier a collective-action case is to bring, the likelier they are to gain redress.

Original Article: https://www.economist.com/finance-and-economics/2019/08/01/the-currency-trading-scandal-continues-to-dog-the-banks