The recent onslaught of LIBOR litigation raises two important issues for potential plaintiffs considering individual lawsuits outside the existing class actions. The first relates to remedy. The recent settlements (and those likely forthcoming) have made it easier for plaintiffs to plead LIBOR manipulation claims. However, what is the appropriate remedy for this manipulation? Given that no one can recreate with certainty what LIBOR (London Interbank Offered Rate) would have been absent the panel bank’s manipulation, how can damages be determined? Moreover, while affected transactions may total in the hundreds of trillions, many experts estimate that the manipulation’s effect on an individual transaction may be modest, begging the question that, even if damages are measurable, is it worthwhile for individual plaintiffs to file suit?
One potential answer to these difficulties that seems to have gone largely untried in the lawsuits filed thus far is the equitable remedy of rescission. While it presents challenges, rescission provides some unique advantages, and it may be particularly well-suited to a situation where damages are uncertain as a direct result of defendants’ intentional wrongdoing.
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