On 22 February 2021, Cockerill J handed down judgment in Leeds City Council and others v Barclays Bank plc and another, striking out claims in 2 actions by 8 local authorities against Barclays Bank for rescission of a number of long-term LOBO (lender option-borrower option) loans. Adrian Beltrami QC, leading Adam Sher of Fountain Court Chambers, successfully acted for Barclays Bank plc, instructed by Ian Moulding of Clifford Chance.
The claimants alleged that they entered into the loans in reliance upon implied representations as to the honesty of the LIBOR benchmark. They claimed the return of all interest payments made by them over the course of more than 10 years. The Bank contended that the claimants had failed to plead, and could not establish, that they had had any contemporaneous awareness of the alleged representations having been made, and that this was a necessary component of the test for reliance. Following a detailed review of the authorities, Cockerill J agreed with the Bank, rejecting the claimants’ contrary argument that the test for reliance could be satisfied by establishing an assumption of honesty or by exploring counterfactual causation. In such circumstances, the Judge did not need to determine the Bank’s alternative ground, that the claimants had affirmed the LOBO loans, albeit that she indicated that, had it arose, she would not have considered that ground as suitable for summary determination.
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