The £1bn UK class action against banks for Forex rigging (FX Claim) cannot proceed on an opt-out basis, the Competition Appeal Tribunal (CAT) has ruled by a 2-1 majority
Instead, the CAT invited the claimants to apply for opt-in proceedings against the banks Barclays, Citigroup, JP Morgan, RBS and UBS, in O’Higgins v Barclays & Ors [2022] CAT 16.
Dissenting, CAT member Paul Lomas said (at para 439 of the 255-page judgment): ‘I do not see how the broader objectives of access to justice are met by choosing a method (opt-in) which will either (i) not occur at all or which (ii) if it did occur, would mean that the overwhelming number of what is likely to be in excess of 40,000 proposed class members (PCMs) did not opt in.’
The CAT considered whether the collective proceedings by O’Higgins should be certified and whether on an opt-in or opt-out basis, and whether a similar claim by consumer rights campaigner Phillip Evans should act as the class representative (known as a ‘carriage dispute’).
The CAT decided to certify the proceedings on an opt-in basis. As carriage disputes arise only in opt-out proceedings, it did not need to decide this issue but it unanimously agreed carriage would be decided in favour of Evans if opt-out were to go ahead.
Hausfeld partner, Anthony Maton, representing Evans, said: ‘The CAT has refused to allow these claims to proceed other than on an opt-in basis which, as I testified to the CAT, is impracticable.
‘It also means that thousands of UK businesses will be denied the chance to recover compensation in relation to illegal conduct which the banks have admitted and in relation to which they have paid billions of dollars in compensation to affected customers in the US and Canada.’
Former chair of the Channel Islands Competition and Regulatory Authorities, Michael O’Higgins, who is the class representative for the case, said: ‘This decision is extremely disappointing, because this claim is exactly the sort of the claim that opt-out proceedings were introduced to facilitate in order to provide access to justice to all entities affected by the illegal behaviour of cartelists.
‘The application I brought was based on strong foundations, solid legal and economic principles and evidence from distinguished experts. In particular, it followed the binding European Commission decisions in which the banks conceded liability and similar proceedings in the US, where the banks agreed to a settlement of over $2bn. We are reviewing our options to decide how to move forward in a way that best serves the class that we seek to represent.’
Evans said: ‘If these claims are blocked from continuing on an opt-out basis, the result will be that tens of thousands of individuals and businesses will be excluded from the opportunity to recover compensation in relation to admitted anti-competitive behaviour by the banks.
‘That would be contrary to the principle of access to justice that underpins the collective action regime. The European Commission fined these banks more than €1 billion for their FX wrongdoing. We want to hold the banks accountable for their actions and secure compensation for affected customers.’
Since his initial statement, Mr O'Higgins has confirmed that the decision will be appealed.
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