The Royal Bank of Scotland (RBS) has turned to Dentons to defend it against a £30m claim from Cooke Young & Keidan (CYK) client property developer Property Alliance Group over Libor-related misselling allegations.
The bank is the third to have faced Libor-related claims, following the Guardian Care Homes case against Clifford Chance client Barclays which settled earlier this year and Indian property company Unitech’s claim againt Deutsche Bank (8 April 2014).
CYK was also instructed for the claimant in the Guardian Care Homes case, having represented the claimant before being replaced by the Wilkes Partnership in December 2013 (6 December 2013).
RBS has turned to Dentons disputes partner Richard Caird and Sam Coulthard, who have instructed Fountain Court’s David Railton QC and Adam Sher. Manchester-based property company Property Alliance Group has turned to CYK partner Philip Rubens, instructing Brick Court silk Tim Lord and XXIV Old Buildings’ Adam Cloherty
Property Alliance is suing RBS over contested interest rate swaps, which the company took out in order to hedge a rise in interest rates but cost the company when rates fell. Property Alliance argues that RBS missold it the interest rate swaps and did not adequately explain the risks associated with the product.
The two sides faced each other this week at the first case management conference (CMC) this week, when the bank revealed that 25 million documents and 2,900 hours of audio tape were relevant to the current probe. The bank has been told to be selective about the documents presented for analysis.
The case echoes the accusations levelled at Barclays by CYK client Guardian Care Homes, which also alleged it had been missold interest rate swap products which crashed in value after the financial crisis.
In October 2013 Graiseley Properties made headlines when it 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 in the marketplace (8 November 2013).
The two settled earlier this year with Barclays 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.
The case is one of a series of disputes involving issues surrounding RBS stemming from the financial crisis. The bank is currently facing claims from a group of former investors who took part in a 2008 rights issue and later claimed the prospectus misrepresented the health of the bank (18 August 2014).
The legal line-up
For the claimant, Property Alliance Group
Brick Court’s Tim Lord QC and Kyle Lawson and XXIV Old Buildings’ Adam Cloherty, instructed by Cooke Young & Keidan partner Philip Rubens
For the defendant, the Royal Bank of Scotland (RBS)
Fountain Court’s David Railton QC and Adam Sher, instructed by Dentons partners Richard Caird and Sam Coulthard