Barclays 2015 Annual Report Download - page 308

306 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Notes to the financial statements
Accruals, provisions, contingent liabilities and legal proceedings
29 Legal, competition and regulatory matters continued
LIBOR and other Benchmark Civil Actions
Following the settlements of the investigations referred to above in ‘Investigations into LIBOR and other Benchmarks’, a number of individuals and
corporates in a range of jurisdictions have threatened or brought civil actions against the Group in relation to LIBOR and/or other benchmarks. While
several of such cases have been dismissed and certain have settled subject to approval from the court, other actions remain pending and their
ultimate impact is unclear.
Background Information
A number of individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in
relation to manipulation of LIBOR and/or other benchmark rates.
USD LIBOR Cases in MDL Court
The majority of the USD LIBOR cases, which have been filed in various US jurisdictions, have been consolidated for pre-trial purposes before a single
judge in the SDNY (MDL Court).
The complaints are substantially similar and allege, amongst other things, that BBPLC and the other banks individually and collectively violated
provisions of the US Sherman Antitrust Act, the Commodity Exchange Act (CEA), the US Racketeer Influenced and Corrupt Organizations Act (RICO)
and various state laws by manipulating USD LIBOR rates.
The lawsuits seek unspecified damages with the exception of five lawsuits, in which the plaintiffs are seeking a combined total in excess of $1.25bn
in actual damages against all defendants, including BBPLC, plus punitive damages. Some of the lawsuits also seek trebling of damages under the US
Sherman Antitrust Act and RICO.
The proposed class actions purport to be brought on behalf of (amongst others) plaintiffs that (i) engaged in USD LIBOR-linked over-the-counter
transactions (OTC Class); (ii) purchased USD LIBOR-linked financial instruments on an exchange (Exchange-Based Class); (iii) purchased USD
LIBOR-linked debt securities (Debt Securities Class); (iv) purchased adjustable rate mortgages linked to USD LIBOR (Homeowner Class); or (v) issued
loans linked to USD LIBOR (Lender Class).
In August 2012 the MDL Court stayed all newly filed proposed class actions and individual actions (Stayed Actions), so that the MDL Court could
address the motions pending in three lead proposed class actions (Lead Class Actions) and three lead individual actions (Lead Individual Actions).
In March 2013, August 2013 and June 2014, the MDL Court issued a series of decisions effectively dismissing the majority of claims against BBPLC
and other panel bank defendants in the Lead Class Actions and Lead Individual Actions.
As a result, the:
 Debt Securities Class was dismissed entirely
 claims of the Exchange-Based Class were limited to claims under the CEA
 claims of the OTC Class were limited to claims for unjust enrichment and breach of the implied covenant of good faith and fair dealing.
The Debt Securities Class has appealed the dismissal of their action to the US Court of Appeals for the Second Circuit (Second Circuit). Multiple
other plaintiffs in the litigation before the MDL Court also joined the appeal, which has been briefed and argued. A decision is pending.
Additionally, the MDL Court has begun to address the claims in the Stayed Actions, many of which, including state law fraud and tortious
interference claims, were not asserted in the Lead Class Actions. As a result, in October 2014, the direct action plaintiffs (those who have brought
suits individually rather than as part of a class action) filed their amended complaints and in November 2014, the defendants filed their motions to
dismiss. In August 2015, the MDL Court granted in part and denied in part the motion to dismiss the direct action plaintiffs’ claims. Although the
MDL Court dismissed a number of claims on various grounds, a number of state law claims will proceed to discovery.
In November 2014, the plaintiffs in the Lender Class and Homeowner Class actions filed their amended complaints. In January 2015, the defendants
filed their motions to dismiss. In November 2015, the MDL Court granted in part and denied in part the motions to dismiss these actions, dismissing
all claims against BBPLC brought by the Homeowner Class and reserving judgment with respect to the claims asserted by the Lender Class. In
December 2015, the MDL Court approved a schedule for litigation of class certification issues, with the associated discovery beginning in 2016 and
extending through 2017.
Until there are further decisions, the ultimate impact of the MDL Court’s decisions will be unclear, although it is possible that the decisions will be
interpreted by the courts to affect other litigation, including the actions described further below, some of which concern different benchmark interest
rates.
In December 2014, the MDL Court granted preliminary approval for the settlement of the remaining Exchange-Based Class claims for $20m. Final
approval of the settlement is awaiting plaintiff’s submission of a plan for allocation of the settlement proceeds acceptable to the MDL Court.
In November 2015, the outstanding OTC Class claims were settled for $120m. The settlement is subject to approval by the MDL Court.