Banker anonymity in Libor case an ‘affront to the principle of open justice’

'Legitimate interest' in bankers' identities, rules judge
Scores of bankers applied for their identities to be kept secret
Among them was Barclays chief Bob Diamond
Times, Telegraph, FT and Bloomberg oppossed gag

Public confidence in the administration of justice could have been damaged if Barclays Bank staff involved in the manipulation of a lending rate had been granted anonymity during legal proceedings, according to a High Court judge.

Granting bankers the protection of anonymity during High Court hearings would have been an "affront to the principle of open justice", said Mr Justice Flaux.

The public had a "legitimate interest" in learning who in the banking community was alleged to have been implicated in the manipulation of the London Inter-Bank Offer Rate (Libor).

Scores of current and former Barclays' employees had applied for their identities to be kept secret during pre-trial hearings of a High Court case centred on alleged rigging of Libor by Barclays staff.

The judge dismissed their application earlier this week after editors at three national newspapers and a news agency raised objections, and yesterday handed down a written ruling giving his detailed reasons for refusing to allow the bankers to remain anonymous.

Mr Justice Flaux said more than 100 people had asked to be anonymised, but that not all of them were thought to have been involved in any impropriety.

He said more than 20 were on a "shortlist" of people believed to have been referred to in "notices in respect of Libor".

The e-mails of others had been provided to regulators investigating alleged Libor manipulation.

More than a dozen firms are airing grievances against Barclays in litigation which Mr Justice Flaux yesterday described as a "test case".

Bosses at companies which run care homes sued after claiming that Barclays sold financial products without warning that the inter-bank lending rate on which they were based was likely to have been "undermined" by manipulation.

Barclays, which was fined for "misconduct and wrongdoing" in relation to manipulation of Libor, disputes the companies' allegations.

Bank bosses say they do not believe that "any aspect of the case has merit".

The judge said a trial was due later this year.

He said in yesterday's written ruling: "The public has a legitimate interest in learning who in the banking community is alleged to have been implicated in the manipulation of Libor.

"In my judgment, for the court to permit individuals who were involved in such manipulation the protection of an anonymity order is not only not necessary for the proper administration of justice, but would be an affront to the principle of open justice and would potentially damage public confidence in the administration of justice."

Mr Justice Flaux added: "So far as individuals who were not involved in the manipulation and are entirely innocent of any wrongdoing are concerned, the suggestion that they could be prejudiced by being identified seems to me somewhat unreal."

Mr Justice Flaux said the Libor litigation was a "test case".

"The involvement of Barclays in manipulation of Libor is only one part of a much bigger picture concerning the manipulation of Libor by a substantial number of banks," said the judge.

"There is a legitimate public interest in the true picture in relation to the manipulation of Libor by banks generally, not just Barclays, being brought fully to light.

"In my judgment, fair and accurate media reporting of all aspects of Libor manipulation, including the involvement of employees and ex-employees of Barclays and their identity, is an important aspect of the public obtaining that true picture."

Mr Justice Flaux said bankers making the anonymity application wanted restrictions imposed in relation to preliminary court hearings – and added that full reporting of the case should not be put off.

"The manipulation of Libor by banks, including Barclays, is in the news now," he added. "The media … should be able to report the matter fully now, not at the time of a trial in 10 months' time."

Mr Justice Flaux also said the identities of a number of "key" individuals – including former senior executives Bob Diamond and Jerry del Missier – were already in the public domain.

A parliamentary committee report had discussed the dealings Diamond and del Missier had with the Bank of England.

The list of people seeking anonymity was released to reporters by lawyers in the wake of Mr Justice Flaux's decision. It included the names of Mr Diamond and Mr del Missier.

Lord Pannick QC, for the bankers seeking anonymity, had argued that naming his clients in public at preliminary hearings would be unfair.

Information could be revealed out of context and reports might give the wrong impression about an individual's involvement, he said, adding that his clients would have no right of reply to information which might emerge and their reputations and job prospects could be unfairly damaged.

"It is simply unfair for names of these individuals to be published by reason of these proceedings," Lord Pannick told the judge.

"Fairness is a reason not to name someone who has not been heard in the proceedings."

The Times and Telegraph newspaper groups, the Financial Times and the Bloomberg agency had objected to the anonymity application.

Guy Vassall-Adams, for the media groups, told the judge that the Libor case was a "compelling" matter of public concern and the "sort of stuff" journalists should report.

He said courts should treat bankers like they treated everyone else and adhere to the principle of open justice.

The public would think it a "joke" if identities could not be revealed, he said.

"They may be grand. They may be wealthy. They may consider themselves above all this. They may even be able to afford Lord Pannick," said Vassall-Adams.

"But they are just like any other individuals in court proceedings up and down this country."

He added: "What this really comes down to is a group of some wealthy individuals saying the court should depart from the normal principles covering civil litigation."

Mr Justice Flaux said one problem might have been deciding how to refer to bankers if names could not be used in open court.

He added: "We would have to refer to the chief executive as, I don't know, the 'head rabbit' or something."

Barclays last year tried to stop damages claims relating to Libor being brought.

But Mr Justice Flaux ruled following a hearing in London in October, that firms could air their claims.

Firms had already complained of being mis-sold financial products but wanted to add more claims in the wake of rulings by financial regulation authorities on Libor manipulation.

Barclays objected, saying the new claims relating to Libor did not have "real prospects" of success and should not be allowed.

The judge ruled against Barclays after hearing legal arguments from both sides.

He said he had "no doubt whatsoever" that the Libor claims passed the "sufficient argument" threshold and should be aired at a trial.

The judge was told that Barclays was fined after regulators in England and the United States concluded there had been "misconduct and wrongdoing" in relation to Libor manipulation between 2005 and 2009.

One firm, Guardian Care Homes, said the judge's decision to allow the Libor claims to proceed was a "huge milestone".

The firm, based in Wolverhampton, says it was sold two interest rate swap arrangements worth £70 million between 2007 and 2008 when it sought to refinance loans with Barclays.

Bosses say they should never have been sold the products, which are designed to insure businesses against rising interest rates.