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Guardian Care Homes has responded to the ruling that allows the company’s claim to proceed to trial:
As Barclays goes to trial over the mis-selling of interest rates to Guardian Care Homes, John Walker, National Chairman, Federation of Small Businesses, said:
Sam Coates, Banking Editor at The Times, has been at the High Court today:
The company claims it was not properly informed that the swaps could incur huge costs in the eventuality of interest rates falling.
In addition GCH, which employs more than 900 staff, claims Barclays did not inform the business that it would have to pay a £25 million break cost if it wanted to exit the swaps.
Guardian Care Homes, which runs 27 homes and has its headquarters in Wolverhampton, will say 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 still 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.
The dispute - the first of its kind to come to the High Court - will be watched closely by businesses that believe they have been mis-sold a rate-swap product.
The policies were meant to protect companies from interest rate increases -to stop the cost of loans spiralling out of control.
But as interest rates fell and then stuck at rock bottom levels, the opposite happened and thousands were stuck with costs they could not deal with.
Barclays, HSBC, Lloyds and Royal Bank of Scotland agreed with the Financial Services Authority (FSA) to compensate customers where the mis-selling of interest rate swap arrangements (IRSAs) had occurred.
As well as offering redress directly for those customers that bought the most complex products, the banks have also agreed to stop marketing certain swaps products to retail customers.
The FSA said not all businesses will be owed redress, but for those that are, the exact redress will vary from customer to customer.
A care home operator is due to take on Barclays in a landmark case at the High Court 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 two interest rate swap arrangements worth £70 million between 2007 and 2008 when it sought to refinance loans with Barclays.
The company now claims that it should never have been sold the controversial products, which are designed to insure businesses against rising interest rates.
Latest ITV News reports
Guardian Care Homes is taking on Barclays in court. The start of the case ushers in a legal fight whose consequences could reach far.