Britain’s new Consumer Rights Act sets race for FX rigging class action lawsuits in the UK


Investors in the UK seeking to sue big banks over FX rigging have just been presented with a new option to do so.

A report by Reuters points out that Britain’s new Consumer Rights Act paves the way for the first “opt-out” class actions for breaching UK or EU competition law from October 1, 2015. This means that UK-based members of a defined group will automatically be bound into legal action unless they opt out.

The new regime, overseen by the Competition Appeal Tribunal (CAT), aims to offer a more effective route to compensation for victims of anti-competitive conduct.

As a result of the new rules, Britain could see a series of U.S.-style class action claims against banks over FX rigging. Given that around 40% of the $5.3 trillion-per-day Forex market is traded in London, the interest in such cases may be quite high, with legal firms having already started the race. Critics even argue that opt-out regimes can fuel claims without merit.

But Reuters also mentions that the existing “opt-in” regime in Britain has led to only one minor case.

The first FX claims in Britain may take time. Reuters quotes Belinda Hollway, a London-based partner at U.S.-based law firm Scott and Scott, who says that “the simplest and quickest route to obtaining compensation at this stage is a conventional (opt-in, group) action in the High Court”.

She adds that a forex claim might not be launched in Britain until early 2016.

Regardless of the legal path claimants select, banks seem to be prepared – at least this is suggested by the hefty sums they have set aside for further fines, litigation and civil action lawsuits.

US, UK and Swiss authorities last year imposed multi-billion dollar fines on several major banks following large-scale probes into market manipulation.

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Britain's new Consumer Rights Act sets race for FX rigging class action lawsuits in the UK

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