Barclays Escapes UK Municipalities’ Libor Loan Suits
Joanne Faulkner, 22 February 2021
A judge said on Monday that eight local councils in England cannot get out of Libor-linked loans they signed with Barclays before the bank’s involvement in the rate-rigging scandal was revealed because they could not prove the lender had acted dishonestly.
High Court Judge Sara Cockerill said that two claims focusing on how interest rates tied to the loans were influenced by the London Interbank Offered Rate had “no real prospect of success.” The local authorities could not prove that Barclays had knowingly made false representations when it sold the swaps between 2006 and 2008, the judge said.
Granting Barclays application to strike out the claim, Judge Cockerill agreed that the lawsuits mirrored similar allegations that have failed over the years. They include a landmark battle launched by Property Alliance Group against Royal Bank of Scotland PLC over the alleged misselling of derivatives.
She also pointed to another case brought by a Spanish investment vehicle, Marme Inversiones 2007 SL, against NatWest Markets PLC, which sought the rescission of several interest rate swaps due to alleged fraudulent misrepresentations connected to the euro interbank offered rate, or Euribor.
