Banks risk legal claims after launch of price fixing probe

Firms could be queuing up to file damage claims if the
Office of Fair Trading
finds banks guilty of price fixing over loans to professional service firms.

The Office of Fair Trading confirmed that investigators had visited
Barclays and
Royal Bank of Scotland
offices following a tipoff by Barclays over alleged ‘inappropriate’ approaches
from a third party.

If an infringement of section 47 (a) of the Competition Act is discovered,
then this could open the floodgates for claims from firms affected, lawyers
suggested this week.

However, they would need to prove that there had been substantial
over-pricing as a result of the cartel.
‘Any person considering bringing a claim will have to think about whether or not
they can establish that there has been an overcharge, which is a difficult
economic exercise, and whether the maximum size of this potential overcharge
justifies bringing proceedings of this level of complexity and cost,’ said Tom
de la Mare, a barrister specialising in competition damage claims at Blackstone

Some suggested firms could simply be left out of pocket if price fixing is

‘Individual claimants will need to be able to demonstrate that they were
affected by it. I doubt that many professional service firms would contemplate
taking on the risks and expense involved,’ said Moira Hindson, forensic
accounting partner at Kingston Smith.

The Office of Fair Trading said it could not comment on the size of loans or
professional companies affected, but said the investigation was limited to
Barclays and Royal Bank of Scotland.

A Royal Bank of Scotland spokesperson said the bank was ‘co-operating fully’
with the investigation, but could not comment further at this stage.

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