Exclusive: Barclays Bank faces multimillion-pound legal challenge over Libor rigging

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Barclays Banking Group’s role in the Libor-rigging scandal looks set to fall under the microscope once again after a storage company launched a multimillion-pound legal claim against the bank.

The writ was filed by Rhino Enterprises as the company emerged from nearly two years in administration, a situation it alleges was prompted by the actions of Barclays.

The lender has already paid £290m to US and UK regulators for manipulating the benchmark rate, which is used to set payments on trillions of pounds worth of financial instruments every day.

It also led the resignation of senior management, including the former chief executive Bob Diamond.

However, in the latest case brought by Rhino, which runs Leeds-based Squirrel Storage, the bank is not only alleged to have falsified submissions it made to the body setting the interest rate benchmark, but also colluded with other banks to create a false market.

The Rhino case is understood to be one of the first to allege collusion – or anti-competitive behaviour – in relation to the Libor scandal.

A writ filed at the High Court in London and seen by The Independent says: “Barclays was knowingly participating with other banks in making false Libor submissions in all key currencies, including sterling. The purpose and/or motive varied from time to time but the effect of the false submissions was to render the rates unreliable, if not meaningless, and to undermine the integrity of Libor as a benchmark.”

The Rhino case could prove to be embarrassing for Barclays if it throws a fresh light on the activities of one of the bank’s proprietary investment schemes, the Ricardo Fund.

The first Libor legal case the bank faced, Graiseley Properties, alleged that Barclays directly profited from its manipulation of the Libor rate through the activities of the £130m proprietary fund.

Legal arguments filed by Graiseley in 2013 stated that the Ricardo fund “was a direct beneficiary of the manipulation … of sterling Libor”.

The involvement of the Ricardo Fund in the Libor scandal was never examined in court as the Graiseley case was settled on the steps of the court – with Barclays paying out millions of pounds, according to reports at the time.

The Rhino case comes at a sensitive time for all the banks involved in Libor rigging. In April, Deutsche Bank paid $2.5bn (£1.71bn), a record amount, to settle regulatory investigations into its involvement in fixing the rate.

Later this month Thomas Hayes, a former UBS money markets trader, will become the first individual to be tried in the UK for Libor fixing.

A spokesman for Barclays said: “We cannot comment on a matter which is currently in litigation save to confirm that we will be vigorously defending it.”

The money collected from the fines has been redistributed, with the Chancellor, George Osborne, revealing in his March Budget that £75m of fines would go towards air ambulance services, veterans’ charities and Agincourt commemorations, along with other good causes. Lloyds and RBS have also been fined for their involvement.