Council loses court action against Barclays Bank
Sian Harrison, Press Association
- Credit: Steve Poston
Newham and seven other councils which brought legal action against Barclays Bank over loans they alleged were affected by the Libor rigging scandal have had their claims thrown out by a High Court judge.
The local authorities launched the action in 2018 in a bid to cancel long term loans they took out with the bank between September 2006 and November 2008.
They said the loans were "tainted" by a number of alleged representations said to have been made by the bank concerning Libor - the London Interbank Offered Rate - at the time the loans were offered.
But on Monday, February 22 a High Court judge struck out the claims against the bank, saying they had "no real prospect of success" at a trial.
Libor is a set of benchmark rates which are supposed to reflect the rate at which a bank could obtain a loan from another bank in a particular currency for a particular period.
Mrs Justice Cockerill said the Libor rigging scandal "erupted" in 2012 when it was discovered that a number of banks were "engaged in manipulating the various Libor benchmarks", and submitted rates which "served their own purposes" instead of submitting their "genuine assessment of the rate at which they thought they could borrow".
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The judge added: "The scandal led to fines, prosecutions and reforms on both sides of the Atlantic."
She said it was "common ground (and public knowledge) that Barclays did in fact engage in Libor manipulation, but that the precise nature and extent of the banks involvement in it is "very much in issue".
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Claims were filed against Barclays by Newham, Leeds City Council, Greater Manchester Combined Authority, Newcastle City Council, North East Lincolnshire Council, Nottingham City Council, Oldham Council and Sheffield Council.