The first wave of funded claims against banks by business owners who bought interest-rate hedging contracts are close to being ready, the Gazette can reveal.

Norton Accord, the company that has secured the backing of funds to bring up to £1bn of claims, confirmed today that its panel solicitors will issue the first proceedings in the next six-to-eight weeks, with each case expected to last 12-18 months.

A number of clients contacted director Paul Crawford’s company directly following the Gazette’s revelation that venture capital firms are backing litigation worth up to £1bn against major banks over the alleged mis-selling of interest rate hedging ‘swaps’ contracts. Crawford said that two of those clients had ‘especially strong’ cases, and would be among those ready to make an early claim.

This group of cases could dwarf previous high-profile customer claims covering Europe, such as the £100m international settlement reached by Virgin and BA in a 2008 case concerning fuel surcharges.

Hedging contracts became a common precondition for high-street bank loans to small and medium-sized businesses from at least as far back as 2005. The swap, a product that effectively fixed interest paid, was a form of insurance against interest rate rises. But with interest rates falling, many borrowers were trapped on a higher rate by the product.

Earlier this week Barclays settled a claim by Wand Property that related to an interest-rate hedging contract. On Tuesday, RBS released some details of its potential exposure, admitting that several thousand of its million SME account holders had interest rate hedging facilities.

HSBC and RBS are also known to have settled some interest rate hedging facility cases.