The fallout from the Libor (London Interbank Offered Rate) lending rate scandal is likely to continue for months if not years, with some form of banking professional negligence litigation a distinct possibility.
This is not unrealistic but simply the likelihood when there is so much at stake and, potentially, so many aggrieved parties. For example, recent scandals involving Kaupthing, Landsbanki and Lehman Brothers all gave rise to some form of banking professional negligence claims – it just remains to be seen how much of an impact the Libor scandal has had and for affected parties to quantify their loss.
It is hard to see how those who have lost out will be content without compensation, particularly with criminal prosecutions looking increasingly likely. Former Metropolitan Police Commissioner Lord Blair also called for police inquiries. “Anybody, the youngest detective, would say this is conspiracy to defraud. It can mean nothing else. And therefore someone has to launch a criminal inquiry into this behaviour,” he said.
Business Secretary Vince Cable, meanwhile, said he sympathised with the view that it is unfair that “people are thrown into jail for petty theft and these guys [bankers] just walk away having perpetrated what looks like conspiracy.”
However, it remains too soon to say whether mortgage holders will be able to instruct professional negligence solicitors to claim banking professional negligence compensation. One thing is certain though – if the Libor has been manipulated to make rates higher it is very likely that new tracker mortgages have been charged at artificially high prices. Furthermore, savers may also have lost out on interest if banks have been manipulating interest rates illegally and for the purpose of profit.