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Class action into illegal cartel conduct requests ‘unusual’ registration process
Respondents to a class action into alleged illegal cartel conduct in the foreign exchange market have taken the “unusual” step of asking potential group members to be registered before mediation.
Naomi Neilson
Counsel for UBS, JPMorgan, Citibank, Barclays Bank and NatWest have asked the Federal Court of Australia to begin the registrations process and allow potential group members to “opt out” of the class action prior to a mediation to “maximise the prospects of success”.
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The class action, launched by Maurice Blackburn, alleges the world’s largest investment banks engaged in illegal cartel conduct between January 2008 and October 2013 by rigging currency exchange rates.
This had the result of allegedly “artificially increasing the cost of buying certain currencies and artificially decreasing the price received when selling certain currencies”, according to the law firm.
The banks have already been subjected to class actions in the US and Canada, which both, respectively, settled for US$2.3 billion and CA$107 million in recent years.
Speaking to the court on Monday (26 February), counsel for the first respondent, UBS, said they do not yet know who the Australian group members would be and how much the Maurice Blackburn class action may overlap with the overseas proceedings.
He said that without this information, the mediation is unlikely to succeed.
“Neither the applicant nor the respondent can identify how many applicants there are (and) this information gap means there is a much stronger case for registration,” the counsel submitted.
He added the proceedings are at a “critical juncture” with lay and expert evidence due next, which he estimates will cost $10 million.
“Before we spend that amount of money, we want to know what the scope is for these proceedings,” the respondent submitted.
The respondents shut down the applicant’s claims that this would mean fewer group members would come forward.
“This is an unusual case because applicants don’t usually oppose registering applicants,” counsel for the second respondent said.
“It is in the interest of the group as a whole for the respondents to have some level of certainty because the absence of that information … is a significant impediment to a meaningful and successful mediation.”
