Graiseley Properties Ltd (Guardian Care Homes) v Barclays Bank PLC – Part 1

Posted on 24/01/2013 · Posted in Expert Witness, Financial Litigation, Interest Rate Swap

Interest Rate Swap and LIBOR Fixing Case

In this, one of the first swaps mis-selling cases to reach the High Court, Guardian’s lawyers argued that Barclays mis-selling of two interest rate swaps and their admission of Libor-fixing earlier in the year (2012) meant any interest rate derivatives sold by the bank should be void. The landmark case is being used as a “test case”, as it is tipped to determine how courts rule against similar cases in the future.

Barclays, which is contesting the case, claims it met Guardian’s banking and accounting advisers before the complex swap was signed. Mr Hartland, Guardian’s Chief Executive, dismisses Barclays arguments that they received advice. Documents state that in April 2007, an accountant advising Guardian approached Barclays to refinance £40m of debt. He is on record stating that the company wanted to maximise the available debt at this time. Barclays staff met Mr Hartland “at least a dozen times”, as well as meetings with his finance director, accountants and bankers. Barclays have said that Guardian signed a letter which confirmed acknowledgement it had “sufficient knowledge, market sophistication, professional advice and experience” to evaluate the transaction. Mr Hartland, however, states that his bankers’ and accountants’ meetings with Barclays were unrelated to the interest rate swap deal and that it was not possible to get adequate advice on the complicated derivatives being offered. Guardian lost millions of pounds when interest rates fell sharply after 2007.

Initial hearings in the High Court in October 2012 have led to the Claimants being able to widen the mis-selling case to include the LIBOR fixing issues and in January 2013 dismissed the request for names of the banks staff to be kept confidential.

The case is due to be heard in October 2013. This was subsequently delayed until April 2014.

Also see Graiseley Properties Ltd (Guardian Care Homes) v Barclays Bank PLC – Part 2.

Link: Graiseley Properties Ltd & Ors v Barclays Bank Plc [2012] EWHC 3093 (Comm) (29 October 2012)

Link: Graiseley Properties Ltd & Ors v Barclays Bank Plc & Ors (Rev 1) [2013] EWHC 67 (Comm) (24 January 2013)

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