Hazell v Hammersmith and Fulham LBC | |
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Court | House of Lords |
Full case name | Hazell and Others v Hammersmith and Fulham LBC |
Decided | 24 January 1991 |
Citations | [1992] 2 AC 1 [1991] 2 WLR 372 [1991] 1 All ER 545 |
Transcript | judgment |
Case history | |
Prior action | [1990] 2 QB 697 |
Court membership | |
Judges sitting | Lord Keith of Kinkel Lord Brandon of Oakbrook Lord Templeman Lord Griffiths Lord Ackner |
Case opinions | |
Lord Templeman | |
Keywords | |
Resulting trusts, local authority, interest rate swaps |
Hazell v Hammersmith and Fulham LBC [1992] 2 AC 1 is an English administrative law case, which declared that local authorities had no power to engage in interest rate swap agreements because they were beyond the council's borrowing powers, and that all the contracts were void.[1] Their actions were held to contravene the Local Government Act 1972.
Prior to the judgment, a large number of local authorities had entered into such swap transactions. Accordingly, the decision of the House of Lords declaring such practices to be unlawful set off a torrent of collateral litigation unwinding such swaps.[2] Although this clearly caused difficulties for the banks and local authorities engaged in such swap transactions, it has been noted that the "swap litigation" was instrumental in developing the modern law of restitution under English law.[3]
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