Competition litigation: the limitation challenge

The Federal Deposit Insurance Corporation v Barclays Bank Plc and Others

Due to the secret nature of cartels, the limitation period applicable to competition damages claims rarely starts to run at the point when the harm was suffered or the cartel ended. Identifying the precise start date is challenging for both claimants and defendants alike. It involves a detailed factual enquiry to assess what information about the cartel was in the public domain and when.

Often, it is only several years post-cartel that sufficient information about the unlawful conduct becomes available to enable a claimant to plead the essential facts of their case. In a recent decision[1] arising from a claim brought by The Federal Deposit Insurance Corporation (FDIC-R) against various banks which colluded in the setting of US LIBOR rates, the High Court dismissed a defendant’s interim challenge on the grounds that the claim was time barred, and the claim was allowed to proceed to trial.


FDIC-R is an independent agency of the US Government. It brought proceedings in March 2017, alleging that several banks, including Barclays, Lloyds, RBS and UBS, colluded to manipulate the USD LIBOR exchange rate in the lead-up to the financial crises, between 2007 and 2009. These banks breached competition law under Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) and Chapter 1 of the Competition Act 1998 (CA1998). The manipulation was carried out principally by a practice known as “lowballing”, the sustained and material suppression of USD LIBOR. The banks achieved this market distortion by making artificially low USD LIBOR submissions that did not reflect their honestly perceived costs of obtaining funds. The banks’ incentives to collude in this way included the desire to present a false picture of their financial health, of the financial system generally and to distort competition between the banks in relation to their trading portfolios.

To make good their limitation challenge, UBS sought to demonstrate to the strike out standard that FDIC-R had no real prospect of overcoming the limitation defence. To grant the application to strike out the claim, the court needed to be convinced that there was sufficient information available to FDIC-R to plead its case before March 2011, because of the six year limitation period. To successfully defeat the challenge, FDIC-R needed to satisfy section 32(1)(b) of the Limitation Act 1980. This section provides that if a relevant fact to the cause of action has been deliberately concealed by the defendant, the period of limitation shall not begin to run until the claimant has discovered the concealment or could with reasonable diligence have discovered it. In other words, the court had to decide at which point FDIC-R could have with reasonable diligence discovered the essential facts of the claim to be able to plead a complete cause of action, i.e. the “statement of claim” test.

The test was addressed relatively recently by the Court of Appeal[2], in the context of a long running competition damages claim brought by retailers in relation to multi-lateral interchange fees charged by Visa’s payment card system. The retailers alleged that the fees were anti-competitive in breach of Article 101(1) TFEU. The court identified the following principles applicable to section 32(1)(b) of the 1980 Act: i) a relevant fact to the cause of action for the purposes of the statement of claim test was a fact without which the cause of action is incomplete; ii) facts which merely improve prospects of success are not facts relevant to the claimant’s right of action; iii) facts relating to a matter which is not a necessary ingredient of the cause of action but which may provide a defence are not facts relevant to the claimant’s right of action. On the facts, Visa’s limitation challenge succeeded but the case is to be distinguished principally because it did not involve a secret cartel, unlike most competition damages claims. Visa’s payment card system rules were published, and the European Commission had published regulatory material over a period concerning the anti-competitive nature of the fees.

In FDIC-R’s case, the cartel was secretive. The pre-March 2011 public information that UBS was able put before the court included research papers concerning LIBOR rates, as well as various articles published by the Wall Street Journal, the FT and Bloomberg which questioned why the LIBOR rate was so low. Importantly, these sources did not conclude that there was collusion going on between the panel banks, even though it was recognised that there was an individual incentive for banks to submit rates which were no higher than their competitors. At the time of the looming financial crises, banks wanted to avoid giving the appearance of financial distress.

In carefully assessing the information before him and reaching his decision to dismiss the application, Mr. Justice Snowden noted that “care must be taken not to overstate the inferences that could legitimately have been drawn from earlier materials by a subconscious use of hindsight drawn from the later materials”. The theme running through the articles “is that there were a variety of views on the accuracy of the LIBOR rates” yet “no commentators have provided any evidence…to suggest collusion between the Panel Banks”. The judge concluded that, from the articles alone, there was “no solid basis in the materials that would have justified the inference that dishonest collusion had occurred between the Panel Banks”.

It was only when certain regulatory findings were published during the years after March 2011, including by the UK Financial Services Authority and the US Department of Justice, that there was sufficient information for FDIC-R to plead its case and meet the statement of claim test. The regulatory findings indicated misconduct between at least two banks and provided the missing link. It was not possible for FDIC-R to contend “prior to the publication of the regulatory findings… the missing element which prevented it from pleading a cause of action under TFEU and CA 1998”. It was the regulatory findings which had “tipped the balance” so as to enable FDIC-R to plead the unlawful conduct, as they showed “for the first time, and very strikinglythat there had been widespread and systemic misconduct by employees at two leading banks… to manipulate many of the benchmarks upon which much of the world’s financial system relied”. This was in contrast to the speculation and theorising which had gone before.

Conclusion: a helpful illustration of the court’s forensic approach to limitation

The High Court’s judgment in FDIC-R’s claim underlines that mere speculation on the market about a secret cartel which fails to pinpoint actual unlawful behaviour will not start the limitation clock. All the more so where the speculation was rejected at the time by market commentators, or was at the very least considered unlikely.

Without more concrete information, a claimant will not be in a position to plead the essential facts of its case. However, regulatory findings which set out the unlawful conduct are potentially much more significant in assessing when the start of the relevant limitation period is triggered. As ever, each limitation analysis will turn on its own facts, and a forensic analysis of the publicly available information is needed to ensure claims are filed in good time. In this way, claimants can minimise the scope for defendants to raise limitation challenges which, even if the challenge is weak, serve to delay the progress of the litigation and a resolution of the claim.


[1] The Federal Deposit Insurance Corporation v. Barclays Bank Plc, [2020] EWHC 2001 (Ch)

[2] Arcadia Group Brands v Visa Inc [2015] Bus LR 1362