Barclays, Royal Bank of Scotland and three other lenders are being sued by investors for at least £1bn over rigging of the foreign exchange market.
In what The Guardian describes as a “test case for US-style class actions in the UK,” a US law firm that specialises in stock market litigation has filed a claim at the Competition Appeal Tribunal.
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The action follows a ruling in May by the European Commission that the banks had violated EU competition law.
The Commission ruled that the banks had coordinated their trading strategies via two cartels, swapping commercially sensitive information and trading plans.
They have been collectively fined more than $8.5bn (£6.9bn) by eleven global regulators.
Reuters says that litigators have “long hoped” to replicate in the UK the success of high-profile US class action claims against banks, including Goldman Sachs, HSBC and Barclays, that resulted in $2.3bn settlements for major investors.
The former pensions regulator chair Michael O’Higgins is acting as the class representative.
He told City AM: “The fines imposed on the banks by the European Commission were an important first step, but they will not compensate those who were damaged or suffered losses.
“Just as compensation has been won in the US, our legal action in the UK will seek to return hundreds of millions of pounds to pension funds and other corporates who were targeted by the cartel.”
JP Morgan, RBS, UBS, Barclays and Citi have declined to comment.