Law360, London (November 5, 2019, 3:28 PM GMT) — A consumer antitrust suit brought by investors seeking at least £1 billion ($1.3 billion) from five banking giants, including JPMorgan and Barclays, over allegations of foreign exchange rigging is set to be heard at a London tribunal on Wednesday in a test case for US-style class actions brought in England.
The first case management hearing for the claim, which also targets Citibank, Royal Bank of Scotland Group PLC and UBS AG, will take place before Judge Marcus Smith at the Competition Appeal Tribunal.
The collective action, which was filed in July by Michael O’Higgins, former chairman of Britain’s pensions regulator, is seeking damages on behalf of tens of thousands of pension funds, asset managers and corporations. The suit, which alleges they were victims of currency manipulation between the banks, is being led by Scott+Scott UK LLP.
The suit alleges that the banks unlawfully manipulated the foreign exchange market between 2007 and 2013, in violation of competition laws.
The five lenders, along with Mitsubishi UFJ Financial, were found guilty by the European Commission in May of anti-competitive behavior for their roles in foreign exchange trading cartels. The banks were hit with more than €1 billion ($1.1 billion) in fines, although UBS was spared a penalty for revealing the existence of the group to authorities. Mitsubishi UFJ Financial is not being targeted in the latest action.
The commission said the banks shared sensitive information and coordinated strategies in chat groups with names such as “Three Way Banana Split” and “Essex Express n’ the Jimmy.”
Wednesday’s hearing will allow the court to give directions about how the case is managed. The representative for the class action will ask the tribunal to move the case forward and hear an application for a collective proceedings order.
“What we’re hoping is that we’re able to create a sensible timetable that will take the case forward,” O’Higgins told Law360 on Tuesday. “We are trying to agree with the banks what dates between February 2020 and January 2021 would be sensible to get into people’s calendars now, rather than later.”
The collective action is being backed by Therium Capital Management, a global litigation funder. It aims to recoup losses suffered by pension funds outside the U.S., asset managers, insurance companies and multinational corporations because of alleged wrongdoing by the banks.
“These well-known international banks manipulated the FX market over several years at the cost of pension funds, asset managers and other companies that traded FX with them through London,” O’Higgins said. “This hearing at the CAT is an important first step toward ensuring that all affected entities — large and small, based in the U.K. and abroad — are able to obtain all of the compensation that is owed to them.”
The fines handed out by the European Commission follow billions of dollars in penalties that government regulators have levied on major banks since allegations of benchmark currency rate manipulation surfaced in 2013. The scandal has cost the industry more than $11 billion in penalties.
Scott + Scott led a U.S. class action against 15 banks including Barclays, RBS, Deutsche Bank and HSBC, over their foreign exchange spot-trading activities. The lawsuit resulted in a $2.3 billion settlement last year
The class representatives are represented by Daniel Jowell QC of Brick Court Chambers, instructed by Scott + Scott UK LLP.
Counsel information for the banks was not immediately available.
The case is Michael O’Higgins FX Class Representative Ltd v Barclays Bank PLC and Others case number 1329/7/7/19 before the Competition Appeal Tribunal.