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Interest rate swaps trial against Barclays delayed as bank lodges appeal

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The first Libor damages trial, brought against Barclays Bank by Guardian Care Homes, has been delayed until next year.

According to the Financial Times, Barclays is challenging the court’s decision to allow Guardian Care Homes to include an allegation of “false and fraudulent representation”.

The trial was due to begin in October but has now been delayed until next April to allow Barclays’ case to be heard by the Court of Appeal this summer.

The trial will be seen as a test case for further claims against banks involved in the rate-rigging scandal.

In July, Barclays was fined £290m for its part in the scandal after derivative traders supplied false information about the rate at which it borrowed money in the money markets.

Guardian is suing Barclays for up to £38m for alleged misselling of two interest rate swaps between 2007 and 2008. Guardian bought two swaps to refinance loans with the bank.

In October, Judge Julian Flaux allowed the case to go ahead, including the claim against Barclays for “false and fraudulent representation”.

Barclays had argued the case should be dismissed because the swaps did not say how the rate was set, although the bank agreed its clients could implicitly assume the Libor process was “objective and transparent”.

Earlier this year, Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Allied Irish Bank (UK), Bank of Ireland, Clydesdale and Yorkshire Banks, The Co-operative Bank and Santander UK agreed with the FSA to fully review the extent of misselling of interest rate swaps.

An FSA pilot review found over 90 per cent of sales did not comply with regulatory requirements, with a significant proportion of cases likely to result in customer redress.

The banks will have to review the sale of 40,000 swaps made on or after 1 December 2001.

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  1. RegulatorSaurusRex 30th April 2013 at 10:50 am

    I should think Hector Sants may be very useful in this regard.

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