Barclays settles Libor battle with Guardian Care Homes

Guardian Care Homes has agreed to settle its multi-million pound Libor battle against Barclays Bank over the misselling of financial instruments.

After switching firms from Cooke Young & Keidan (CYK) to the Wilkes Partnership in December through concerns over costs (6 December 2013), then to Hausfeld & Co in February, the company has agreed to settle the Libor test case (5 February 2014).

The claim has been dropped with Barclays, which had instructed Clifford Chance, agreeing to restructure the £70m owed by Guardian Care Homes’ parent group Graiseley in the contested interest rate swaps. According to reports the claimant has seen its disputed debt wiped from £70m to £40m.

It brings to an end the first Libor test case expected to hit the High Court, which has already crossed several legal hurdles.

In October 2013 Graiseley Properties won a bid to amend its claim against the bank to include allegations of fraudulent misrepresentation linked to Libor rigging, bringing into question $300tn worth of derivatives already in the marketplace (8 November 2013).

At the same time, Mr Justice Flaux rejected Barclays’ bid to have the case thrown out in October. He said attempts to dismiss the claim’s Libor aspects could be described as “shadow boxing” and were “doomed to fail”.

The following month the claimant also won the right to call former Barclays’ chief Bob Diamond as a witness along with the former co-heads of the investment bank, Rich Ricci and Jerry del Missier.

The bank had turned to South Square’s Robin Dicker QC and Jeremy Goldring QC and 3 Verulam Buildings’ Adrian Beltrami QC, instructed by Clifford Chance partner Ian Moulding to defend the claims.

Hausfeld & Co partners Anthony Maton and Lianne Craig had instructed Guildhall Chambers silk Stephen Davies QC, Neil Levy and John Virgo.

The claimant mandate had been taken away from One Essex Court’s Stephen Auld QC and Outer Temple Chambers’ Farhaz Khan and Simon Oakes at the end of last year when the case was transferred from CYK to the Wilkes Partnership.

A Barclays spokesperson said: “In response to discussions with Graiseley, in order to support the ongoing viability of Graiseley’s care home business, the parties have agreed to a commercial restructuring of Graiseley’s debt, which reflects the impact of changes in conditions in this sector over the last few years. Graiseley has withdrawn the litigation.”

The legal line-up

For Graiseley Investments & Ors 

Guildhall Chambers silk Stephen Davies QC, Neil Levy and John Virgo instructed by Hausfeld & Co partners Anthony Maton and Lianne Craig

For Barclays Bank

South Square’s Robin Dicker QC and Jeremy Goldring QC and 3 Verulam Buildings’ Adrian Beltrami QC and Richard Brent, instructed by Clifford Chance partner Ian Moulding