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 on 25 April 2014. A copy of this article can also be found on their website.

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Contact Natalie Singh on or 0121 214 3718.