Expect piggyback litigation in the wake of regulatory intervention warn John Bramhall & Eleanor Mumford-Smith
In a speech in 2005 in those halcyon days before the global financial crisis, Tony Blair (remember him?) described the Financial Services Authority (FSA) as being “hugely inhibiting of efficient business”. It was on the back of that sentiment that a light-touch regulatory regime took centre stage. However, the onset of the recession changed all that, as serious weaknesses in this approach to regulation were exposed. Regulators resolved to ensure transparency in the markets with a more interventionist approach, and a number of high-profile investigations have followed. Off the back of each new investigation, whether into PPI or CDS mis-selling, there has been a wave of litigation brought by disgruntled clients against financial institutions and related professionals.
LIBOR litigation
One of the most recent examples is the £290m fine imposed on Barclays for misconduct in relation to LIBOR, which has the potential to trigger a raft of litigation in the UK, as well as the US. The first LIBOR-related action hit the UK
