| Hazell v Hammersmith and Fulham LBC | |
|---|---|
 | |
| 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]
- ^ "Hazell -v- Hammersmith and Fulham London Borough Council; HL 1991". swarb.co.uk. 9 July 2015. Retrieved 11 July 2015.
- ^ In his judgment, in Re Interest Rate Swap Litigation (unreported, 28 November 1991), Hirst J recorded that "As at 30th October, 1991 there were 203 extant swap actions, 18 had been settled after the issue of proceedings, 2 had been discontinued and 4 are in progress in the Chancery Division. Although in the vast majority of cases the banks are plaintiffs, there are 10 actions involving 8 local authorities in which a local authority is plaintiff because they are net losers under their swap transactions. The number of plaintiff banks in these actions totals in all 42 and the number of local authority defendants 62. These figures may need up-dating, but give a substantially accurate picture."
- ^ McKendrick (1997), p. 221 "There can be little doubt that the swaps litigation has made an enormous contribution to the development of the English law of restitution."