Care homes firm takes on bank in rate fixing claim
A care home operator with homes in Shropshire is taking on Barclays in a landmark case at the High Court today over claims it was mis-sold complex financial products.
Guardian Care Homes (GCH), which is responsible for the welfare of more than 1,000 residents, was sold in two interest rate swap arrangements worth £70 million between 2007 and 2008 when it sought to refinance loans with Barclays.
The company, which runs 27 homes including Ditton Priors Care Centre near Bridgnorth and Tunstall Hall Care Centre near Market Drayton, will claim that it should never have been sold the controversial products, which are designed to insure businesses against rising interest rates.
But GCH will also claim it should be compensated as the products were based on Libor – the key interbank lending rate that was found to be the subject of manipulation by Barclays staff.
The bank agreed to pay £290 million in fines to UK and US regulators in June to settle allegations that it manipulated Libor, while more than dozen other banks are being investigated.
Barclays, which has set aside £450 million to compensate customers mis-sold interest rate swaps, is expected to argue that GCH was sophisticated enough to understand the terms of the agreement.
A preliminary hearing was taking place today at which the parties will argue the details of the case before the judge determines what should happen next.
