Councils win Icelandic banks court case

Responding to the decision by the Icelandic Supreme Court to award councils priority creditor status for the deposits they had in Icelandic banks, Sir Merrick Cockell, chairman of the Local Government Association (LGA), said:

"This is a £470 million victory for councils and local residents. Securing priority creditor status in the test cases means the 145 local authorities with investments in the Icelandic banks are likely to recover almost all of the more than £1 billion they had on deposit with the four Icelandic banks. Losing this case would have been a huge financial blow. This is a great relief.

"Today's outcome is the culmination of more than two years of extremely hard work and brings the total estimated recoveries on behalf of the sector from Landsbanki and Glitnir to £624 million – or 98 per cent of the total on deposit. We are grateful to our legal team and the councils who brought their cases forward."