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ISLINGTON TO PETITION HOUSE OF LORDS ON INTEREST RATES SWAPS

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Islington LBC has decided to petition the House of Lords in relation to part of the decision of the Court of Appeal...
Islington LBC has decided to petition the House of Lords in relation to part of the decision of the Court of Appeal in the case brought by Westdeutsche Landesbank.

The borough says this is the first of the local authority interest rates swaps cases to be tried.

Islington to appeal against the finding that it was a fiduciary and as such liable to pay compound interest to Westdeutsche Landesbank.

Islington will not appeal against the finding that it is liable to make restitution of monies received under the swap with the German bank.

Derek Sawyer, leader of Islington LBC, said: 'We entered into the interest rate swaps, at a time when were facing severe cutbacks from government, in order to maintain essential local services such as meals on wheels, libraries and street cleaning.

'The advice given to us at that time, along with 80 other local authorities from all political parties, was that these transactions were a perfectly legitimate way of raising money.

'The courts have since decided differently which has had budget repercussions for councils up and down the country. We made provision in this year's budget for the implications of the High Court judgement last February. Any further financial implications will be carefully considered and reported to the next policy and resources committee.'

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