NAVIGATING CORPORATE DISPUTES STEMMING FROM REGULATORY VIOLATIONS AND ENFORCEMENT ACTIONS
Regulatory investigations and enforcement action frequently and increasingly give rise to a broad range of civil claims for damages.
With the availability of litigation funding, the growth in claimant-focused law firms, the developing competition class action regime, and the wide scope of documentary disclosure which may be ordered, the UK is an attractive jurisdiction for consumers and businesses pursuing claims in connection with public findings of corporate misconduct.
The types of claims that may be triggered by regulatory investigations, and some of the complex issues such claims raise, are considered below.
Private damages actions arising from regulatory enforcement action can take a number of different forms depending on the nature of the relevant conduct and the relationship between the claimant and the infringing company. This can be illustrated by the variety of civil actions brought against certain panel banks following findings by global regulators in 2012/13 that submitters and traders had sought to manipulate one or more interest rate benchmarks (IRBs).
These actions included, for example, claims based on allegations of fraudulent misrepresentation (e.g., Graiseley Properties Limited & Ors v Barclays Bank plc and Deutsche Bank AG & Ors v Unitech Global Limited & Ors), the mis-selling of financial instruments referenced to an IRB (e.g., Property Alliance Group Limited v The Royal Bank of Scotland plc (PAG v RBS)), negligent misstatement and various breaches of contract (PAG v RBS), and infringements of competition law, deceit and conspiracy (FDIC-R v Barclays Bank plc & Ors).
Such claims can give rise to complex and overlapping factual, legal and procedural issues, particularly where – as has been the case for litigation arising from IRB-related regulatory action – claims have been brought by a wide spectrum of claimants in multiple jurisdictions and on multiple bases.
Apr-Jun 2024 issue
Milbank LLP