British pension funds with thousands of members could be challenged in their attempt to go after banks for compensation ranging into the billions, a London court heard on Wednesday.
The pension funds, asset managers and hedge funds took a step closer towards the £1 billion lawsuit against global banks, including British giants RBS and Barclays.
Lawyers for all parties were told to agree two weeks for the claimants’ application to be heard at the beginning of 2021.
They are being represented by former chairman of the pensions regulator, Michael O’Higgins, who has hired lawyers from Scott+Scott.
However, the court on Wednesday heard that a second law firm, Hausfeld, is exploring plans to launch its own class action suit to rival Mr O’Higgins’.
The two firms had previously worked together on a successful 2.3 billion dollar (£1.78 billion) settlement in a class action suit against the same banks in the US.
The two could now be rivals to take the case forward.
The application is “waiting in the wings” and could end in a dispute over which class action suit will go forward against the banks, said Mr Justice Marcus Smith at the Competition Appeal Tribunal.
“Only one can prevail,” he added.
However, Mr Justice Smith said Mr O’Higgins’s case should continue until Hausfeld decided to file, at which point it could be re-assessed.
Scott+Scott is ahead, he said, as it had already filed a claim in July. The law firm has funding and insurance, which are vital for the claim to proceed.
“We are encouraged that the judge has set out a timetable to move things along so that affected entities, including pension funds, other asset managers and corporates, can finally seek the damages owed to them as a result of the cartel activity of these banks, which went on for several years and was discovered over five years ago,” Mr O’Higgins said.
Currency traders are chasing compensation from the banks, which also include Citibank, JPMorgan and UBS.
They claim to have lost about £1 billion from a cartel that manipulated the currency markets.
The banks have already admitted they were part of a cartel and been fined more than 8.5 billion dollars (£6.6 billion) by 11 global regulators.
Spearheading the suit could mean a big win for either law firm. It is one of the biggest cases ever brought under the 2015 Consumer Rights Act.
Both British and foreign investors who traded through the UK could be eligible for compensation.