MAB and 3VB offer first defence in Barclays test case
Lawyers for Barclays have filed the first defence against claims of mis-selling complex derivatives.
The big four banks have so far avoided litigation over the alleged interest-rate product mis-selling and Libor fixing. But in a case brought by Cooke Young & Keidan partner Philip Young with Tim Lord QC of Brick Court Chambers as counsel (7 August 2012), Barclays has filed a 30-page defence denying misrepresentation, negligence and breach of contract in relation to an agreement with Guardian Care Homes.
The defence statement was compiled by 3VB’s Adrian Beltrami QC, instructed by Matthew Arnold & Baldwin partner Clare Stothard, for Barclays.
The care home group accused the bank of selling it derivative products that were highly unlikely of offering protection against rising interest rates in what is expected to be a test case for other businesses making claims against the banks.
The defence states: “It is denied that any act or omission on the part of Barclays has caused either GIL or GPL [Guardian Care Homes’ parent companies] to suffer any recoverable loss.”
The defence statement claims that Guardian Care Homes is no worse off after investing in the products and that it was “sophisticated” enough to understand the terms of the agreement.
It continued: “It is denied that anything said by representatives of Barclays, in writing or orally, amounted in law to advice or recommendations to purchase the collar [derivative].
“The decisions to enter into the GPL credit agreement and the collar were the independent decisions of GPL, acting through Mr [Gary] Hartland [Guardian Care Homes CEO], in the exercise of its own independent judgment, and with the benefit of independent advice […]”
In a statement issued today, Hartland accused Barclays of “evasive stalling” and said: “When Barclays aren’t using clever tactics to avoid addressing the accusations against them, they are flat-out denying that they could have conceivably mis-sold the swaps to me.
“I find it odd that they would take such a stance when only last month they agreed with the Financial Services Authority [FSA] that a sufficient number of these products have been mis-sold so as to prompt a business review and redress scheme.
“It doesn’t bode well for the small companies who might have no choice but to use that scheme to seek compensation.”
At a hearing last week at Birmingham Mercantile Court, Judge Simon Brown QC said it would be “wholly wrong” for the case to be transferred to the FSA redress scheme after Barclays had applied for the case to be deferred.
Cooke Young & Keidan is one of a number of firms instructed by businesses taking action against banks (30 July 2012).
Readers' comments (8)
Anonymous | 15-Aug-2012 4:30 pm
Swap missold to me, barclays, was a condition of loan, £2200 per quarter turned out to be £43,000 per quarter, £22,000 get out fee turned out to be £739,000.... Ruined my business, complained for 4 yrs, but threatened by barclays of facility withdrawl if i did anything.........
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david greene | 15-Aug-2012 5:33 pm
the selling of these products which are investments is subject to BIPRU and COB and gives rise to claims under s150 FSMA
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Anonymous | 15-Aug-2012 9:04 pm
If Barclay's are denying any wrong doing in a case prepared by QC - I assume they know what they are doing then what chance does a normal small business stand in the FSA redress scheme supervised by they friends at KPMG.
The whole agreement with the Government and FSA is a con to defer the matter for a long time by which time most of the public will have forgot about the bank's mis-selling.
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DAVID BARNETT | 16-Aug-2012 1:17 pm
I was one of those small businesses that Barclays put into Administration, I lost a lot more than my business and intend to fight Barclays all of the way with the strong evidence I have.
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Adviser | 16-Aug-2012 3:01 pm
Barclay's Bank has a wonderful system of transferring any business who complain about Interest Rate Swap into their Business Support Department.
The Director from Business Support sidelines the normal Relationship Director and takes control of handling the complaint with their Solicitors. Thus acting as a pseudo Relationship Director, Business Director from Business Support team and in charge of the complaint. He then puts on the pressure to have property valuation etc to intimidate the customer.
I know one client who complained and the pseudo Relations Director, Business Director and complaint handlers in one has confirmed that his Solicitors MAB have confirmed that it is quite right for him to continue in this role which seems contrary to any normal common sense logic.
This is a ludicrous situation and flies in the face of the pledges Barclays gave to the parliamentary select committee.
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John Stirling | 30-Aug-2012 10:44 am
These chickens are slowly coming home to roost. Just from those people I know personally, I know of £50m in redress being claimed from Barclays, and in all cases they seem to fit the profile of a successful complaint perfectly (I am not a lawyer, this is my personal opinion)
If the redress scheme ends up being a sham (from KPMG, heaven forfend) then I suspect a significant class action will emerge, which will have deep enough pockets to obtain suitable redress.
Several of the banks may regret their miss selling, but I think Barclays may be in the most invidious situation.
They have the Libor issue which boosted break costs, making clients less likely to break the agreement, and in some cases causing covenant breaches, and they have the miss selling itself. These are potentially separate claims, and will allow some clients who would have been excluded to make successful partial claims that would otherwise have failed.
They could even be named as defendant in cases where they didn't sell the actual swap where the libor distortion caused problems.
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Anonymous | 15-Sep-2012 2:36 pm
Only 6months ago i had a visit from Barclays business support team, who's solution was to re finance me over a longer term, but surprise surprise wanted an extra 1% margin on the loan..mmm.. All i had asked for was a 10k overdraft.. Just been asked by their lawyers for a 'stay' in my case pending the outcome of the FSA review of my case.....sigh.. Still considering .. Any opinions most welcome ..
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Nihaal Singh | 21-Sep-2012 11:36 am
Do not fall for that trick. Just carry on with your legal action. The "Stay" is a delaying tactic and I will be very surprised if you get anything in the end without legal action
This is a standard request by the banks and nothing special for your case
Nihaal Singh
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