LIBOR manipulation & disclosure: Simon Duncan continues his review of recent banking litigation in the wake of swap mis-selling
The judgment of Mr Justice Birss was handed down after the latest interim hearing in Property Alliance Group Limited v The Royal Bank of Scotland Plc [2015] EWHC 3272 (Ch), [2015] All ER (D) 159 (Nov) on 13 November 2015.
Property Alliance Group Limited (PAG) is a property developer. PAG entered into four interest rate swaps with the defendant bank (RBS) between October 2004 and April 2008. Each swap used GBP LIBOR as a reference rate. PAG terminated the swaps in June 2011 at a break cost of £8m to stem their ongoing losses. PAG issued its claim in September 2013, seeking to recover the break cost and a further £5m paid under the swaps.
Following the Court of Appeal’s decision in Graiseley v Barclays Bank and Others [2013] EWCA Civ 1372, [2013] All ER (D) 100 (Nov). PAG pleaded that RBS made four representations about LIBOR. In summary:
- that LIBOR represented what it purported to be, that is the
