The alleged mis-selling of financial derivatives by banks to small business customers faces a major legal test tomorrow when a Scottish business sues Royal Bank of Scotland in the Court of Session.

MPs have called for tough action on bank sales of interest rate swaps and hedges to small businesses forced into paying massive and unexpected costs, and last week Financial Services Authority chairman Lord Turner told the Treasury Committee the regulator was investigating "product design, sales processes and incentives".

The FSA claims to be aware of only "a small number of complaints", but campaign group Bully-Banks says as many as 300,000 small businesses might have been sold the products.

Several horror stories have emerged of businesses forced to pay six-figure penalties or lose their financing, and one operator of 28 business parks has publicly blamed its collapse on a complex derivative sold it by RBS in 2008.

The Herald can reveal that law firms in Scotland and England are sitting on a raft of potential cases where banks are said to have clearly breached their conduct of business rules, but appear to have legal immunity.

Cat McLean, partner and head of dispute resolution at MBM Commercial in Edinburgh, said: "Everybody is waiting for somebody to run some sort of argument that finds a way through the difficulties."

She has several cases in the pipeline, mainly involving sales by RBS in 2007/08, and says: "There is a school of thought that says that when RBS was acquiring ABN Amro, selling hedges increased their apparent capital reserves."

RBS has said it always had proper procedures in place.

The Court of Session will hear tomorrow that small property developer Grant Estates was pushed into administration early last year after being hit with a £135,000 bill for an interest rate swap that protected the borrower from interest rates rising, and was highly profitable for the bank should they fall.

The agreement was signed with RBS on the same day in December 2007 that the Bank of England began to lower interest rates from 5.75%. Gordon Deane, litigation partner at Balfour & Manson, which is acting for Grant Estates, said: "It wasn't explained fully to them. We say certain things were said which effectively misrepresented the decision."

Grant will argue this represented unfair terms of contract.

A spokesman for RBS said: "This case is subject to ongoing legal proceedings. However we have procedures in place to ensure these products are sold in accordance with regulations. Any customer who feels procedures have not been followed should contact the bank."

Lawyers say the bank is likely to argue that the product was "requested by the customer" and no advice was given.

But even if the bank did behave as Grant Estates alleges, the "conduct of business rules", which regulate banks' behaviour under the Financial Services and Markets Act, do not apply to business customers due to a "Section 150" exemption. Mr Deane said: "The banks appear to be able to breach FSA rules and small businesses don't seem to have a remedy. We are still hoping we can deploy arguments to get around Section 150."

Two years ago RBS won a case brought by a Midlands manufacturing firm, Titan Steel Wheels, when the High Court ruled that the bank's duty of care was limited when the two parties were "of equal bargaining strength".

Arguments that the contract was not excluded under Section 150, or was unfair, failed.

Ms McLean said courts might yet take the view that smaller companies did not have equal bargaining strength, and that the conduct of business rules emanated from a European directive intended to provide a right.

She said case law was based on judgments in the 1990s that the businessman was expected to understand everything.

"That might have made sense 15 or 20 years ago, but the financial products in question at the moment are so complicated that only a very experienced financial consultant would know what information to look out for and which potential risks to inquire further about.

"It would appear far-fetched to expect a person who owns a property development company or a small gift shop to have sufficient knowledge or understanding. "

Paul Mason, business adviser at Mazars in Glasgow, commented: "There is still a duty of care from a moral perspective."

He went on: "One client of mine, a very large £1 billion plc, was mis-sold a very complex instrument.

"After we escalated it to the (bank) chairman, they pulled it and said let's forget about it and move on.

"There was reputational risk from the perspective of the bank."

He said the issue was not legality but "morally what they knew was fair versus unfair", in selling to businesses who did not understand the risks of products that were "not simple vanilla instruments".

More complex products were more profitable for banks, Mr Mason added.

"That creates inherent conflicts in certain situations where, on the one hand you are looking to minimise risk both to the bank and the borrower, but on the other hand you have a slightly more sophisticated structure which generates a little more profit."