The Live Wire



Press Release

Icelandic judges find in favour of UK local authorities

1 April 2011

The Icelandic District Court has found in favour of local authorities and ruled that deposits placed by UK wholesale depositors have priority status in the winding up of the Icelandic banks, Landsbanki and Glitnir.

Responding to the judgement of the Icelandic District Court, Baroness Margaret Eaton, Chairman of the LGA, said:

“It is excellent news that the judges in Iceland have heard the arguments on both sides and found in favour of local authorities.

“This judgment means that councils' claims have been recognised as deposits with priority status over other creditors' claims and will be at the front of the queue when it comes to getting their money back following the collapse of the failed Icelandic banks. We hope that our opponents will accept this clear verdict.

“Securing priority status in the administrations of Landsbanki and Glitnir could save council taxpayers across the country as much as £400million.

“This money is particularly important at a time when local authorities need to maximise resources to help fund the reduction in their funding.

“The way in which the LGA has coordinated the legal action in this matter has minimised legal costs for all of the councils involved and provided value for money for taxpayers. The cost to councils of the litigation to date amounts to less than 1 per cent of the money we expect to recover. If there is any further legal challenge, the LGA will continue to coordinate support for our member authorities



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