Law firms are sizing up a potentially huge class-action suit against Barclays in the wake of its £290m fine for deliberately altering the Libor rate used on interbank loans.
Law firm Edwin Coe have announced that they were already working on the details of a potential action before the shock announcement that Barclays had settled the case with regulators.
Any action would be on behalf of companies who believe they lost out as a result of the actions of Barclays' employees.
"We already have action under way against Barclays Wealth over the Madoff affair and over a timeshare fraud and we would expect to be doing Libor as well," Edwin Coe's head of litigation, David Greene, told the Daily Telegraph.
Barclays are also in hot water over the affair in the US, where 20 banks including HSBC, RBS and Lloyds as well as Citigroup and Bank of America are charged with attempting to alter the rate. US firm Hausfeld LLP is representing one of the largest affected corporations stateside, Baltimore City Council.
Hausfeld, who also have an office in London, have also announced that they will bring an action in the UK courts on behalf of affected clients in the UK and Europe.
In a separate class action in the US, German fund manager Metzler Investment is also suing banks on behalf of a range of clients who traded in Eurodollar futures and options priced against the fixed Libor rate.
It is unclear at this point whether individual bankers involved in the scandal will face criminal prosecution. The Financial Services Authority (FSA) only has the power to fine the institution for wrongdoing; however, the Serious Fraud Office (SFO) is now investigating whether criminal charges could be justified.
Experts believe that this would be difficult to achieve in practice; Clive Zetman is head of commercial litigation at Stewarts Law.
"What you have to do in a criminal prosecution is you have to prove particular individuals, wherever they are in the organisation, had actual knowledge in some way that makes them culpable," he told the BBC, adding: "Charges of this kind would be very novel indeed."
Libor scandal: law firms expected to target Barclays (The Telegraph)