Barclays, Royal Bank of Scotland and three other banks are being sued by investors for at least £1bn over rigging of the foreign exchange market in a test case for US-style class actions in the UK.

A US law firm that specialises in stock market litigation has filed the claim at the Competition Appeal Tribunal. The claim also targets US investment banks JP Morgan and Citigroup, and Switzerland’s UBS.

The legal action follows the European commission’s decision in May to fine five banks more than €1bn (£910m) for colluding to reduce competition in markets for 11 currencies, including the US dollar, the euro and the pound.

Cartels of traders with names such as the “Three-Way Banana Split” operated on chatrooms to rig the multitrillion-dollar foreign exchange market. UBS, which informed the commission about the collusion, was not fined but Japan’s MUFG received a penalty.

Scott + Scott, the law firm representing investors, said Barclays, RBS, JP Morgan, Citi and UBS had been fined more than $8.5bn by regulators globally over foreign exchange manipulation. The firm secured more than $2.3bn compensation in a US class action suit from banks including Barclays, RBS, UBS and Deutsche Bank.

The claim, led by Michael O’Higgins, the former chair of the Pensions Regulator, seeks compensation for investors and companies allegedly damaged by the banks’ actions. O’Higgins has instructed Scott + Scott to carry out work on the case.

O’Higgins said: “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.”

Changes to the law in 2015 established opt-in collective legal actions that are akin to the long-established practice of class actions that have secured billions of dollars in compensation from tobacco companies, drug companies and others on behalf of consumers and investors.

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Under a class action a judge rules that all similar claimants will be included in the same claim, reducing litigation costs and sharing damages between claimants who might not have been able to afford to bring their own case.

Until the 2015 law change, English law allowed opt-in collective actions, which made assembling a claim far more difficult and costly. The new regime has so far failed to get off the ground because of disagreements about the eligibility of claims.

The value of the claim against the banks will depend on the number of foreign exchange trades carried out in London for UK-based operations and is likely to exceed £1bn, O’Higgins told Reuters.