Lawyers circle as Europeans eye new route to FX-rigging payouts

* UK Consumer Rights Act comes into force on Oct. 1

* Allows "opt-out" class actions for UK antitrust cases

* Lawyers say UK-based FX claims may take traditional route

By Kirstin Ridley

LONDON, Oct 1 (Reuters) - Large companies and fund managersin Britain looking to sue banks over foreign exchange riggingare eyeing a fresh route to seeking damages, as a new law ushersin U.S.-style class actions for antitrust cases on Thursday.

Litigators are hoping to replicate from Britain the successof U.S. class action claims against banks such as Goldman Sachs, HSBC and Barclays, that have yieldedmore than $2.0 billion for investors in settlements to date.

With around 40 percent of the $5.3 trillion-per-day foreignexchange market traded in London, lawyers are jostling forposition. UK firms that have traditionally brought group claimshere, such as Stewarts Law, are seeing U.S. rivals such asHausfeld launch hiring sprees and others opening shop in London.

An official at one London-based fund manager, who declinedto be named, said: "We are talking about it (a claim) internallyand with our custodians. If we think it is in clients' interest,we would certainly consider being part of a class action."

Britain's new Consumer Rights Act introduces the first"opt-out" class actions for breaches of UK or EU competition lawfrom Oct. 1. In such cases, UK-based members of a defined groupwill automatically be bound into legal action unless they optout, saving on hefty advertising costs. Overseas-basedclaimants, however, will still have to actively sign up.

The regime is designed to offer a more effective route tocompensation for consumers and businesses who fall victim toanti-competitive conduct. It will be overseen by Britain'sfreshly-empowered Competition Appeal Tribunal (CAT).

Critics say opt-out regimes can fuel claims without merit.Others argue victims too often go uncompensated for injustice.Countries from Belgium and Italy to Australia and China areproposing and introducing similar systems.

The banking industry, in the spotlight since the financialcrisis, has paid more than $235 billion in fines andcompensation over the last seven years.

SIGNING UP CLAIMANTS

Some lawyers admit to being tempted to grab the limelightwith Britain's maiden class action lawsuit. But Europeanantitrust authorities have yet to conclude their forex probe,law firms would need significant resources to litigate and earlyCAT cases could get bogged down in interlocutory fights aboutshaping the new regime, experts are warning.

"We are in active conversations with a number ofmultinational companies and we have some who have already signedup to bringing this case," says Belinda Hollway, a London-basedpartner at U.S.-based law firm Scott and Scott, setting up shopin London after leading successful U.S. forex claims.

"But the simplest and quickest route to obtainingcompensation at this stage is a conventional (opt-in, group)action in the High Court," she added. A forex claim might not belaunched in Britain until early 2016, she said.

The work that precedes even a High Court case should not beunderestimated - especially as the losing side foots thecombined legal bill, said Stewart Law's Clive Zietman.

"There is a very real possibility of claims. But claimantshave to be pretty determined with rock solid facts," he said.

Whichever route claimants take, lenders are braced.

They have set aside billions of dollars to cover civillawsuits after U.S. and UK authorities described how tradersgathered in chatrooms with names such as "The Cartel". Sevenlenders were fined around $10 billion and four banks havepleaded guilty to attempted market manipulation.

Britain's former "opt-in" regime for antitrust cases, whereeach claimant has to be individually identified, has inspiredonly one claim: a football kit price-fixing case won by consumerorganisation 'Which?' a decade ago. It proved complex and costlyto organise and few claimed the compensation won.

But if the new regime is successful, it could be expanded toallow class actions on grounds such as product liability andsecurities fraud.

Such claims drove the landmark U.S. tobacco settlement overcigarette-related public health claims in 1998, set at around$200 billion over 25 years, and the $7.2 billion Enronsettlement with shareholders after the energy giant's collapsein 2008.

(Additional reporting by Simon Jessop; Editing by RuthPitchford)