UK's Barclays Bank is facing a first legal battle from a party claiming compensation for damages that occurred due to unlawful rigging of the Libor rate that involved the bank.

UK's second-largest lender is being sued by Wolverhampton-based Guardian Care Homes for damages.

The care home has filed a case demanding £38m for alleged misspelling of two of the interest rate swaps between 2007 and 2008. The care home had decided to purchase two swaps to refinance loans with the bank at that time.

Many believe that the cast will be seen as a test for similar possible legislations against several banks that were found to be involved in the rate rigging scandal. Barclays has lost several top executives, $5 billion of market value and is facing a government inquiry in the case. The bank is now facing a fine of a record 290 million pounds in the case.

Judge Julian Flaux has accepted the case and also claims against bank for "false and fraudulent representation". The bank has responded by saying that the case should be dismissed because swaps did not detail how the rates were set even as the bank admitted that it let its clients assume the Libor process was "objective and transparent".

Barclays has said that it disputes the claims filed by Guardian Care Homes and that the bank will contest the case.