UK Supreme Court Blocks $3.6 Billion Mass Lawsuit Against Global Banks

Post by : Saif Nasser

Some of the world’s biggest banks have won a major legal victory in the United Kingdom after the Supreme Court blocked a large group lawsuit linked to foreign exchange trading. The case, valued at about $3.6 billion, accused major banks of secretly working together to manipulate currency markets more than a decade ago.

The banks involved include JPMorgan, UBS, Citigroup, Barclays, MUFG, and NatWest. They were facing a mass legal claim brought on behalf of thousands of asset managers, pension funds, and financial institutions. These groups argued they suffered losses because currency prices were unfairly influenced by bank traders.

The lawsuit was led by Phillip Evans, a former senior official at Britain’s Competition Markets Authority. His claim relied on findings by the European Commission, which in 2019 fined several global banks more than 1 billion euros for breaking competition rules.

According to the Commission, traders at major banks shared sensitive information and coordinated their actions in online chat rooms. These activities took place between 2007 and 2013 and affected the foreign exchange market, which is one of the largest and most important financial markets in the world.

Over the years, banks have already paid more than $11 billion in fines to U.S., British, and European regulators to settle similar allegations. However, the new UK lawsuit aimed to go further by seeking compensation through a collective legal action.

The case had a complicated legal journey. In 2022, the Competition Appeal Tribunal refused to allow it to proceed as an “opt-out” class action, which would have automatically included all affected parties unless they chose to leave. The Court of Appeal later revived the case, giving the claim new life.

The banks then appealed to the UK Supreme Court. On Thursday, the top court ruled in their favour, restoring the earlier decision that blocked the lawsuit from moving forward on a mass basis. This means claimants will not be able to pursue damages together in one large case.

Legal experts say the ruling sets a high bar for future group lawsuits in the UK, especially those linked to past regulatory findings. While the banks have avoided another costly legal battle, the decision has disappointed many investors who hoped for compensation.

The outcome highlights the challenges of turning regulatory penalties into successful mass compensation claims. It also shows how complex and lengthy financial litigation can be, even years after alleged wrongdoing took place.