Rate swap mis-selling: Barclays and Lloyds ask small businesses to delay legal action The FSA scheme, agreed after the regulator found "serious failings" in banks" sales of the products, has been criticised by representatives of affected firms for limiting redress to "non-sophisticated" customers and failing to give details such as timelines and independent oversight of the process, although the regulator is expected to provide more guidance next week. Guardian Care Homes, which has made a £36m claim against Barclays, has rejected the request and accused the bank of a "tactical approach" to avoid a case that could set a precedent in England as the most advanced and high-profile active legal challenge over the mis-selling of swaps. Gary Hartland, Guardian Care Homes chief executive, said: "We're not going to choose the FSA scheme, which has no parameters and questionable credibility, over a court ruling. [Barclays"} approach is frustrating, but unsurprising given their past treatment of smaller businesses." In a letter to Barclays, lawyers acting for the company claimed the "true reason" the bank requested the postponement was "an attempt to avoid proper judicial scrutiny." But sources at Barclays and Lloyds argue that a delay could be in the interests of both sides as it allows the FSA process to proceed without the costs involved in litigation. The FSA agreed the deal with Barclays, HSBC, Lloyds and Royal Bank of Scotland (RBS) to compensate small and medium-sized companies mis-sold the most complex interest rate hedging products, which were supposed to protect against a fall in interest rates but left business owners facing huge costs they say they were not warned about. The Clydesdale and Yorkshire banks yesterday confirmed that they are being investigated by the FSA over the scandal, which was revealed by a Telegraph investigation, but said the "review does not mean that there has been any finding" that they also mis-sold the products. A spokesman for Bully Banks, a campaign group, said: "Banks wanting to get people off the litigation path is understandable but there are so many unknown areas [in the redress process] and it seems banks aren't offering anything meaningful to persuade companies to deviate from the legal route." It is understood that RBS has not sent similar letters. None of the banks in the FSA redress scheme commented.