The care home operator at the centre of a £40 million settlement with Barclays that was described as the “Libor test case” is preparing a new legal action against Lloyds Banking Group that will focus on the taxpayer-backed lender’s involvement in rigging borrowing rates.
Guardian Care Homes is expected to ask Lloyds for about £6 million in damages, alleging the bank sold it interest rate hedging products linked to Libor, while at the same time its traders were involved in manipulating the rate.
On Monday, Lloyds admitted its role in rate-rigging and paid £226 million to close an investigation by British and American regulators.
Hausfeld, the US law firm, is representing the company in its claim against Lloyds. The same firm acted for GCH in its case against Barclays which was settled out of court in April weeks before the case was due to go to trial at the High Court in London.
The Barclays case was widely seen as the first Libor test case involving a private action brought against the bank over its role in rate-rigging. As with the Barclays case, the claim against Lloyds is related to the bank’s sale of interest rate hedging products to Guardian Care Homes. The company alleges it was never properly made aware of the risks of buying such a policy.
A spokesman for Lloyds said: “While we do not believe any claim has yet been filed, it would be inappropriate to comment in detail, other than to state that the bank would contest any such claim vigorously.”
