The organization behind the $1 trillion-a-week gold market is itself going to court

One of the most influential but little-known organizations in the global gold market will appear before the High Court in London in a few days.

The case against the London Bullion Market Association (LBMA) begins on October 7. It is the body that sets the standards for the world’s largest over-the-counter gold market, with a weekly turnover of about $1 trillion.

The court case was triggered not by gold prices or bank actions. The lawsuit was filed by the families of two men who died in 2019 at the North Mara gold mine in Tanzania.

The main issue of the case is much broader than this specific tragedy: can an organization that sets rules for responsible gold sourcing bear legal responsibility for how those rules actually work in the real supply chain.

Why such a small organization matters so much for global gold

The LBMA is not a government regulator and does not operate an exchange in the conventional sense.

It is an independent industry association that sets standards for the London precious metals market.

One of the LBMA’s main instruments is the Good Delivery List. It includes refiners whose gold and silver bars meet the requirements for broad acceptance on the London market.

Getting on this list requires not only meeting specifications for weight, purity, and appearance of the bars. Refiners must also comply with responsible sourcing rules—the Responsible Gold Guidance—and undergo independent audits.

Thus Good Delivery status has become a kind of passport into the global gold trading infrastructure.

Reuters calls this system the foundation of a market with a 276-year history. Bloomberg estimates current gold trading volume in London at about $1 trillion a week.

What happened at the North Mara mine

The original lawsuit concerns the deaths of two 23-year-old artisanal miners in Tanzania in 2019.

The families claim the men died in separate incidents involving security forces at the North Mara mine. The case includes allegations about actions by Tanzanian police and private security.

The names of the deceased are protected by a court order.

Importantly, the current lawsuit is not against the mine itself nor against the police. The defendant is the LBMA.

The law firm representing the families, Leigh Day, argues that the problem lies in the gold supply chain certification and control system.

What the families accuse the LBMA of

The claimants argue that the LBMA knew of serious allegations of human rights abuses related to North Mara, yet re-admitted into its Good Delivery system a refiner that processed gold from this mine.

In their view, this status allowed market participants to rely on the LBMA system when assessing the origin of gold.

Legally, the key question is framed through the concept of duty of care.

The families want to prove that an organization that creates responsible sourcing standards and monitors compliance can, in certain circumstances, be held liable for the consequences of insufficiently effective oversight.

If the court accepts this construction, the case could have implications far beyond North Mara.

LBMA responds: we don’t certify mines

The LBMA completely rejects the claims.

The organization emphasizes that it does not own North Mara, does not operate the mine, does not control its security, and has no authority to direct the Tanzanian police.

Furthermore, the LBMA insists on an important distinction: its system does not certify an individual mine or a specific batch of gold as “clean.”

The Responsible Gold Guidance sets minimum requirements for the due diligence procedures that Good Delivery refiners must apply. Their systems are assessed annually by independent auditors.

After publications in 2019 linked North Mara to one of its accredited refiners, the LBMA initiated an internal review.

According to the organization, subsequent independent assessments did not provide grounds for removing the refiner from the Good Delivery List, and work with the supplier could continue provided identified risks were mitigated and the situation monitored.

The LBMA also disputes the causal link between its decision and the deaths of the men.

Another contentious issue: did that gold even reach London?

The case contains a non-obvious nuance.

The LBMA states that it has not been established whether gold mined at North Mara and processed by the relevant refiner was sold directly on the London or other international markets.

According to the association, a significant portion of that refiner’s output may have been sold within India.

For the defense, this is an important argument: the more independent parties there are between the LBMA’s rules, the refiner’s decisions, the mine operator’s actions, and the behavior of security forces, the harder it is to prove the association’s direct legal liability.

The claimants, on the contrary, argue that it is precisely the international system of responsible gold recognition that influences company decisions throughout the supply chain.

Why the LBMA itself calls the case a threat to its existence

The stakes for the organization are unusually high.

In its defense materials, the LBMA stated that recognizing such a broad duty of care would be, without exaggeration, an “existential problem” for it.

It is not just about the two original lawsuits.

According to the LBMA, the court has already postponed consideration of dozens of other related claims until the end of the current proceedings. They concern later alleged incidents at North Mara.

Bloomberg reports, citing people familiar with the situation, that if an unfavorable ruling leads to significant payouts, theoretically it could create solvency risk for the association itself.

But this is precisely a risk scenario, not a forecast of the court outcome. The LBMA is confident in its position and says the lawsuit is groundless.

The court could affect more than just gold

The main intrigue of the case is where the court will draw the line of responsibility.

Modern international supply chains increasingly use voluntary industry standards: companies require suppliers to verify the origin of raw materials, working conditions, environmental risks, and human rights compliance.

But organizations that create such systems usually do not directly operate mines, factories, and supplier facilities.

If the court decides that a standard-setting or certifying organization can, in certain circumstances, be answerable to people harmed far up the supply chain, this could create an important legal precedent.

The LBMA itself warns that the consequences could affect not only precious metals but also other sectors using similar responsible sourcing systems—from minerals to clothing and agriculture.

What might actually change in the gold market

Even an unfavorable verdict for the LBMA does not mean the London gold market will freeze or that the metal’s price will automatically change sharply.

The court is considering a question of legal responsibility, not the mechanism of gold trading or price formation.

But the consequences could be significant for another part of the system—the rules that define responsible origin of the metal.

Organizations may need deeper supplier vetting, tougher responses to reports of violations, and additional mechanisms to monitor how standards are implemented far from London.

At the same time, overly broad liability could, according to the LBMA’s argument, force industry organizations to abandon some voluntary programs or significantly alter their design due to legal risks.

It is this balance that the High Court now has to determine.

Thus the case of two dead artisanal miners has turned into a much larger question: who ultimately bears responsibility for the promise that gold in the global financial system is responsibly sourced—only the mine and the refiner, or also the organization that creates standards and gives market participants a mark of compliance with those rules.

The trial begins in London on October 7 and, according to the LBMA’s current schedule, is expected to last about six weeks.

Based on materials from: London Bullion Market Association, Bloomberg / Yahoo Finance, Reuters, Leigh Day.