Barclays and RBS are among five banks being sued in the UK over allegations of rigging the foreign exchange market.

The banks are facing a class action claim by investors understood to be in excess of £1bn, alongside US giants JP Morgan and Citigroup and the Swiss Bank UBS.

The suit was filed on Monday with the UK's Competition Appeal Tribunal (CAT), alleging that the five banks broke competition laws by unlawfully manipulating the foreign exchange market between 2007 and 2013.

It is being led by Michael O'Higgins, former chairman of the Pensions Regulator, and is being funded by litigation finance group Therium.

Mr O'Higgins told Reuters the total value of the claim would depend on the number of foreign exchange trades executed in London and the proportional impact of the rate rigging.


Given the size of London's "forex" market, Mr O'Higgins said the total value was likely to exceed £1bn.

He said: "Even on a relatively conservative assumption it's certainly billion pounds and possibly several.

"Markets should be fair as well as free and in this case the markets weren't fair."

David Scott of the law firm Scott+Scott which is bringing the action said it was a "perfect" case to be brought as a so-called "opt-out" collective class action for breaches of UK or European Union competition law.

He added: "It is a very difficult case to put together individual damages which are significant enough."

Opt-out class actions for breaches of British or EU competition law were introduced under the UK Consumer Rights Act (CRA) in 2015.

In a ruling designed to offer a more effective route to compensation for consumers and businesses who fall victim to anti-competitive behaviour, UK-based members of a defined group are automatically bound into a legal action - unless they opt out.

Overseas-based claimants must still actively sign up.

The class action suit comes after all of the banks except one were fined a total of €1.07bn (£936m) in May, for taking part in foreign exchange trading cartels dubbed "Three Way Banana Split" and "Essex Express".

The European Commission handed out the penalties relating to collusion over trading in 11 currencies dating back more than a decade.

UBS was named in the investigation but avoided punishment after it blew the whistle on the cartels.

The commission said the traders involved exchanged sensitive information and trading plans and occasionally coordinated trading activities through chatrooms.