Clifford Chance

LIBOR reform and contractual continuity – issues for the financial markets

6 February 2014

LIBOR is used as a benchmark in a vast number of contracts globally. Market participants are questioning what will happen to their contracts if the way in which LIBOR is calculated is changed. Although the outcome will depend on the precise terms of the contract, the circumstances in which it was entered into and what happens to LIBOR, the English courts will be well aware of the wider importance to the financial markets of any decision they make and should strive to ensure as little disruption to the financial markets as possible. They have a number of tools at their disposal to achieve continuity (notably contractual interpretation and implication of terms) and will also rely to the extent possible, on any contractual interest rate fall-back provisions.

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