The Lifeline Project was a well-regarded charity. Failure to carry out the targets within the contracts led the charity into insolvency and resulted in a personal, 7-year disqualification order.
It had been dubbed as a possible test case for how the English courts would determine the liability of the banks for interest rate swap mis-selling and Libor manipulation, after Barclays was previously fined £290 million for rigging the rate at which banks exchange money in a separate case. But the parties have settled their dispute, partly frustrating this thirst for clarity.
A question finance directors may now be pondering is how this dispute, and the issues discussed within it, affect housing associations in their negotiations with lenders.
First, let’s consider the broad issue of mis-selling of interest rate swaps, and lender failure to guide properly. Every housing association, except very small ones, has an executive team member with financial expertise (though rarely with swaps expertise), and every association has access to external treasury consultants with swaps expertise. Accordingly, it might be rare for a lender (or the court) to accept that associations should be treated as needing much, if any, lender guidance. But the argument is it still might be appropriate in some cases, at least concerning historic swaps.
Second, claiming that Libor rigging had an impact on mis-selling remains a gamble. The argument that rigging-related actions materially impacted on mis-selling does not have the obvious look of a winner, but neither did Grand National champion Pineau de Re.
This piece also appeared in Insidehousing.co.uk on 25 April 2014. A copy of this article can also be found on their website.
For more information
On 23 July, trainees from Anthony Collins Solicitors will host an ‘experience day’, which will involve various activities and presentations, with lawyers and non-lawyers from across the firm.
The Office of the Immigration Services Commissioner (OISC) has launched a new scheme specifically for charities and not-for-profit organisations who want to advise EU citizens on UK settlement.
In the second part of our series on contract management pitfalls, we look at the risks and opportunities presented by payment mechanisms in construction contracts.
Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.