It was reported yesterday that the EU's Competition Commission is allegedly set to impose multimillion-euro fines on six banks suspected of manipulating EURIBOR. No official announcement of the EURIBOR decision is expected for another month, and the reports are based on an unnamed source, but if the leak is accurate, RBS, Deutsche Bank, JP Morgan, Credit Agricole, Societe Generale and HSBC will all be fined; with Barclays being excused under the Commission's leniency programme because it blew the whistle.

Like LIBOR, EURIBOR is a benchmark interest rate set by banks. LIBOR's manipulation led to multibillion-dollar fines in the US last year, and is the subject of a parallel EU Competition Commission investigation at the moment.

The source said "some" banks had settled in exchange for a 10%-reduced fine. It is unclear if all the named banks have settled. Commissioner Joaquin Almunia recently announced that a settlement would not require the participation of all banks, but concurrent fines inside and outside settlement would be unusual.

In any event, even if banks settle (including the whistle-blower) they will remain exposed to potential Court action by those who may have suffered damage as a result of the manipulation. Such Claimants could include the holders of bonds that paid out at EURIBOR, purchasers of EURIBOR-pegged interest rate swaps and innocent banks who lent at EURIBOR.

Unlike traditional settlements where liability need not be admitted, the European cartel settlement procedure requires admission, and an infringement decision by the Commission.

In England, Claimants may then bring follow-on claims under Section 47A of the Competition Act 1998. Section 47A makes Commission infringement decisions binding on the UK Courts, so the liability phase of trial can be dispensed with altogether, and the Court can jump straight to the question of what damage was caused.

A further incentive for foreign litigants to bring their claims in England is the extensive disclosure requirement here, with Defendants obliged to reveal harmful documents.

Several of the banks named above are domiciled in England, and can therefore be sued here under Article 2.1 of the Brussels Regulations. Once sued, they become "anchor" Defendants, so the non-English banks - who are jointly liable - can be included in the same action by virtue of Article 6.1.