CONTACT US 0845 345 5004

Litigating Libor: Could Swaps and Other Banking Agreements Based on Libor be Considered Void?

Posted on Jul 18, 2012 by Iain McDougall  | 0 Comments

In my last post I considered the possibility of various sorts of actions being raised as a result of the Libor fixing scandal. It seems that Libor fixing may have an interesting knock on effect to interest rate swap claims.

The English Law Society Gazette has reported on an ongoing case brought in Birmingham Mercantile Court by Guardian Care Homes against Barclays in respect to the mis-selling of two interest rate swap agreements. Guardian claim they had been mis-sold these agreements which they then had to pay fees in the region of £9m to exit.

Guardian are now intending to argue that the swap agreements, which were based on Libor, are void. It was an implied (i.e. non-written) term of the swap agreements that representations made by Barclays as to the Libor rate were true. Barclays knew, or ought to have known, that that the Libor rate they were providing to Guardian was not the true Libor rate. As a result they were in breach of this implied term of the swap agreements, effectively allowing them to be considered void by Guardian. It is a clever and compelling augment and we will be watching this case closely.

Could such an argument be deployed against other banks and not just against Barclays based on their knowledge of Libor fixing? As we learn more about the true extent of the fixing of Libor this may well be a possibility

iain.mcdougall@mbmcommercial.co.uk

Solicitor

0131 226 8219

False Starts in Trade Mark Infringement
Report from UK Business Angels Association Nationa...

Contact us

Invalid Input
Invalid Input
Invalid Input
Invalid Input
Invalid Input

You must confirm you have read and accept our Website Privacy Policy.

Invalid Input

Contact us

Invalid Input
Invalid Input
Invalid Input
Invalid Input
Invalid Input
You must confirm you have read and accept our Website Privacy Policy.
Invalid Input