(Reuters) – Barclays(BARC.L) will on Monday face the first claim for damages stemming from manipulation of the Libor interest rate in a landmark case before Britain’s High Court that could have major implications for all UK banks.
Guardian Care Homes, a residential care home operator based in Wolverhampton, central England, is suing Barclays over the alleged mis-selling of interest rate hedging products known as swaps on which it has lost 12 million pounds.
The company says it should be fully compensated for its losses because the swap rates were based on Libor. Barclays agreed to pay $450 million in fines to U.S. and British authorities in June to settle allegations that it manipulated Libor and other key interest rates. More than a dozen other banks are also being investigated.
Monday’s hearing will be a test case for thousands of small British firms who believe they were mis-sold such swaps and raises the prospect of other companies linking future claims to interest rate rigging by banks.