UK Tribunal Nixes FX Investor Recoveries

In a setback for global FOREX (FX) investors seeking compensation for losses not covered by the $2B US class action settlement, on March 31, 2022, the UK Competition Appeal Tribunal (CAT) ruled that collective proceedings (i.e. their equivalent to US class actions) could only proceed on an opt-in rather than an opt-out basis. Absent reversal on appeal, this effectively ends the recovery efforts.

Here are six takeaways from the 255-page decision:

  1. The plaintiffs say they intend to appeal. But this will take years and if they lose, neither plans to proceed with opt-in  Earlier efforts by organizers to book-build a group suit in which claimants opted into the action were not successful.  So absent reversal, these efforts end leaving an estimated 40,000 FX investors without recourse in the UK.
  2. Those still wanting compensation have few options. [1] The only meaningful remaining path to pursuing claims appears to be a group action in the Netherlands.  Currently, in the early stages, the case organizers are still accepting registrations.  Your FRT representative can provide more details upon request.
  3. Besides effectively ending the two UK class actions, the CAT decision discourages future collective suits for bank abuses in markets for non-securities instruments. The panel denied opt-out certification in part because it felt many impacted investors were sophisticated entities, with potentially large claims and sufficient resources to protect their interests.  This same reasoning will apply in other rate manipulation cases, like LIBOR, that have achieved significant recoveries in the US.  In short, as a result of this ruling, further UK class actions following US settlements seems unlikely, leaving any claims not covered by them uncompensated.
  4. Without an opt-out process, claimants will have to default to direct group actions in the UK which, as we saw with FX, means only the very largest investors will sue. Tens of thousands of smaller investors will have no effective recourse in the UK, or anywhere else outside the US.
  5. The CAT also denied opt-out proceedings because it believed the claims as alleged in the pleadings were weak on the merits. On its own initiative – without prompting by the defendant banks – the CAT considered striking the applications in their entirety.  This was so despite a binding European Commission decision in which these banks were fined $1B collectively and conceded liability, and despite the banks paying $2B to settle the similar claims in the US.
  6. The decision may impact investor rights beyond FX. The CAT was particularly skeptical of a causal link between the banks manipulative acts and harm to investors.  The panel faulted the claims for their dependence on economic theory.  This could bode poorly for UK securities suits, where investors make arguments for “presumed reliance” to link the defendants’ wrongdoing to their losses.  Presumed reliance relies on economic theory, namely that markets are efficient and investors can be harmed even if they do not directly rely on misrepresentations.

Investors have historically shied away from the UK as a venue to pursue compensation for investment losses.  This decision further discourages them, at least for suits involving losses in non-securities instruments.

Our Legal & Research team will continue to monitor this through the appeals court and provide updates accordingly. To learn more about pursuing claims in the Netherlands, contact your FRT representative or email us at

[1]  Several of the largest FX claimants sued the banks directly, but their group is closed to new claimants.  There is a class action in Australia, but it’s limited in scope.

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