QUEENs BENCH DIVISION (COMMERCIAL COURT)
Poole and others v HM Treasury
 EWHC 2731 (Comm),  1 All ER (Comm) 255,  Lloyds Rep IR 114
SOLICITORS: Grower Freeman; Treasury Solicitor.
JUDGE: Langley JDATES: 3, 4, 5, 6, 10, 11, 12, 13, 17, 18, 19, 20 JULY, 28, 29 SEPTEMBER, 8 NOVEMBER 2006
Held — Whether there was a grant of rights to individuals was to be determined having regard to the wording of the relevant provisions of the directive in their context, and having regard to their nature and purpose. The purpose of Council Directive 73/239/EEC was to facilitate the development of an open market in the provision of direct insurance and, in that context, to harmonise existing national supervisory provisions. That purpose or those purposes had nothing to do with the complaint the names sought to pursue in the instant proceedings. The rights contended for by the claimants came to no more than claiming a right to implementation of the directive. They had failed to identify a right which should necessarily have been granted to them to achieve the results required by the directive. If the law were otherwise, there would be liability in damages for any failure to implement a directive which could be shown to have caused sufficiently serious loss to a claimant who would have benefited from its implementation. Further the directive did not bestow rights upon the names as reinsureds or the beneficiaries of policies designed to limit their exposure as insurers. It followed that the claims would be dismissed (see -, below).
Three Rivers DC v Bank of England (No 3)  3 All ER 1 and Paul v Germany  ECR I-9425 considered.
The claimants who were underwriting names at Lloyds brought proceedings against Her Majestys Treasury seeking damages for loss allegedly arising from the Governments failure to implement Council Directive 73/239/EEC (on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of business of direct insurance other than life assurance). The facts are set out in the judgment
Judgment was reserved.
8 November 2006. The following judgment was delivered.
 By a claim form, issued on 2 September 2002, the claimants, who were underwriting names at Lloyds at various times during the period 1980 to 1996, claimed against Her Majestys government damages for losses incurred by the names in consequence of the governments failure to implement First Council Directive (EEC) 73/239 (OJ 1973 L228 p 3) (the Insurance Directive) in accordance with its obligations under the Treaty of Accession. The Insurance Directive, on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance, was adopted by the Council on 24 July 1973.
 To quote from para 2 of the re-re-amended particulars of claim (RRAPC):
The Claimants case in outline is that:
The breaches alleged
 In summary, the breaches of the Insurance Directive alleged are that the defendant: (i) delegated to Lloyds the management and superintendence of the affairs of Lloyds and the power to regulate and direct the business of insurance at Lloyds and the function of authorising syndicates to engage in the activity of direct insurance; (ii) delegated to Lloyds aspects of the solvency test and determination of the manner and extent to which liabilities should be reserved for, provided for by the Insurance Directive; (iii) permitted the accounting system at Lloyds to be wholly inadequate&148;; and (iv) failed to verify the state of solvency of Lloyds syndicates.
 It is the case of the claimants that the United Kingdom did not amend its national provisions to comply with the Insurance Directive until, at the earliest, 1 December 2001 when Pt XIX of the Financial Services and Markets Act 2000 entered into force.
The loss alleged
 The loss claimed in para 99 of the RRAPC (which, of course, varies with each claimant) is or includes:
(i) the personal liability incurred on or about 3 September 1996 to pay the Equitas premium as part of R&R;
(ii) other trading losses suffered as a member of a syndicate in any underwriting year in which he would not have been a member or would have had a smaller underwriting capacity had the defendant not been in breach of its obligations under the Insurance Directive;
Damages consequential upon the enforcement of Lloyds demands for payment of Equitas premiums or other unpaid trading losses including:
The cause of action
 The claim is founded on the principles established by the Court of Justice of the European Communities (the ECJ) in Francovich v Italy Joined cases C-6/90 and C-9/90  IRLR 84,  ECR I-5357, Brasserie du Pcheur SA v Germany, R v Secretary of State for Transport, ex p Factortame Ltd Joined cases C-46/93 and C-48/93  All ER (EC) 301,  ECR I-1029 and Dillenkofer v Germany Joined Cases C-178/94, C-179/94, C-188/94, C-189/94, and C-190/94  All ER (EC) 917,  ECR I-4845. Those principles provide that a member state will incur liability for a breach of Community law where: (i) the rule of Community law infringed is intended to grant rights to individuals; (ii) the breach is sufficiently serious and there was a manifest and grave disregard by the member state of its discretion; and (iii) there is a direct causal link between the breach of the obligation resting on the member state and the damage sustained by the injured party.
 Responsibility for the obligations imposed upon the United Kingdom by the Insurance Directive has successively been conferred on the Secretary of State for Trade and Industry, HM Treasury and the Financial Services Authority.
 So far as material, and in summary, the defendants case is that: (i) if (which is not conceded) the Insurance Directive entails any grant of rights to individuals, it is limited to a grant to insurers of the right of freedom of establishment and does not grant rights to the claimants in relation to their claims which do not arise from any infringement of a right to freedom of establishment but from losses incurred in transactions undertaken by the names as insurers on the insurance market and/or arose from other transactions undertaken as reinsurers or retrocessionaires which fall outside of the scope of the Insurance Directive altogether; (ii) it is not in any event possible to identify the content of any rights granted to the claimants on the basis of the provisions of the Insurance Directive; (iii) no breach of the Insurance Directive occurred since the obligations it imposed on the United Kingdom were properly discharged; (iv) any breach was not sufficiently manifest and grave as to ground Francovich/Factortame state liability; (v) there is no direct causal link between the alleged breaches of the directive and the damage alleged to have been sustained by the claimants; (vi) the claims are time-barred.
The group litigation order/costs scheme
 A group litigation order was made on 5 April 2004 and amended on 10 May 2004. Two Adverse Costs Schemes have also been agreed under which the potential costs liability of participating names is capped.
The issues to be tried
 At the first case management conference on 31 March 2004, two issues were identified for determination at this trial known as the first sub-trial. The two issues, shortly described and as they have come to be known, are the grant of rights issue and the limitation issue.
 The order made by Cresswell J on 31 March 2004 also provided for the joint preparation of a statement of facts for the purposes of the first sub-trial. That has been done. Where agreement was not possible, the rival contentions have been set out. The ASF is a very substantial document, and I have edited it to some extent for the purposes of incorporating it as an appendix to this judgment. It forms App 1.
The worked examples and the limitation issue
 The statement of facts included worked examples by reference to ten nominated sample names (five nominated by each party) illustrating the parties cases on two issues material to the limitation issue, namely when the alleged cause of action arose and questions of knowledge. I have not included the worked examples in the appendix.
 By a further order made by Cresswell J on 22 February 2005, it was ordered that-
so far as it is necessary to determine the position of any particular Claimant in relation to limitation, that question shall (unless the trial judge otherwise directs) be determined for the purposes of the first sub-trial by reference to the Sample Names identified in the Statement of Facts.
Mr Plender QCs strictures about not treating all the names in the same way must be seen in the context of this order. The sample names were intended to be representative of the whole, unless some particular matter raised a real likelihood of a substantive distinction.
 A list of the abbreviations most frequently used in this judgment (and the appendices) forms App 2.
 A chronology of the more important events forms App 3.
 The first sub-trial was originally listed for hearing in May 2005. The dates were vacated by order of 14 April 2005. At a case management conference, held on 27 January 2006, I ordered the trial to commence on 3 July following five reading days.
 The grant of rights issue was substantially limited to submissions of law. The limitation issue also raised complex issues of law and raised the issues of fact identified at , below. It was to those issues that the evidence was directed. Witness statements were served from all the sample names except Mr Davis. With the exception of Mr Davis, who was not required for cross-examination, all were called by the claimants to give oral evidence. They were, in the order they were called to give evidence, Mr Henderson, Dr Arnold, Mr Thomas-Everard, Mrs Maybury, Mr Harris, Miss Stewart-Smith, Mrs Mahon, Mr Villiers and Mr Kingsley. The sample names chosen by the claimants were Messrs Henderson and Thomas-Everard, and Mrs Maybury, Miss Stewart-Smith and Mrs Mahon. Mr Henderson, Mr Kingsley and Mr Thomas-Everard were parties to Society of Lloyds v Jaffray  EWCA Civ 1101,  All ER (D) 399 (Jul).
 The claimants also served witness statements from, and called to give oral evidence, a number of other witnesses. Except in the case of Mr Freeman, their statements were relied upon only to the very limited extent that they were marked to that effect. These witnesses were:
(i) Mr Michael Freeman, a solicitor and the partner in the claimants solicitors having conduct of this claim. Mr Freeman also made his statement and gave evidence in his capacity as long-standing legal representative of many groups of Names in relation to their affairs at Lloyds.
(ii) Mr Ian Hay Davison, who was chief executive and deputy chairman of Lloyds from 15 February 1983 until February 1986. Mr Hay Davison was asked to take on that role by the Governor of the Bank of England. He said his task was to clean up the market and to alter the structure of power to prevent a recurrence of the iniquities of the late 1970s.
(iii) Mr James Sinclair who, in 1987, became managing director of Willis Faber Members Agency Ltd, a members agency at Lloyds. He was a working name on the Council of Lloyds from 1997 to 2000. He is also a claimant.
(iv) Mr John Jackman, a chartered accountant, who became a member of Lloyds in 1977, and was finance director, secretary and/or corporate adviser to Lloyds brokers from 1974 to 1997.
(v) Mr Alan Smallbone, who became a member of Lloyds in 1959 and worked as a Lloyds broker from 1955 to 1988 when he retired.
(vi) Mr Frank Attwood, a chartered accountant involved in the audit of a number of Lloyds entities in the period 1984 to 2004.
(vii) Mr Barrington Jervis, employed in the Lloyds market from 1961 to 1992 as deputy underwriter, claims manager and, from 1989, as syndicate analyst and compliance officer at a members agent.
(viii) Mr Paul Mason who worked in the Lloyds market in the marine claims departments of brokers from 1954 until his retirement in 2000.
 Two witness statements were served on behalf of the defendant. Neither witness was required to attend for cross-examination. They were: (i) Mr Julian Burling, counsel to Lloyds since 1995; and (ii) Ms Lorna Robertson, a solicitor employed by the Treasury Solicitor.
 By way of general comment, whilst many of the external names may have known little about the specifics of insurance or how Lloyds worked, they were generally intelligent, inquiring, and resourceful people as the evidence demonstrated. They were of course well able to recognise the losses they suffered and the unquantifiable exposures which put their fortunes at severe risk. Most set about seeing what could be done about it. In their researches and questioning they often showed both more application and intelligence than those who worked at Lloyds some of whom, of course, felt the chill winds of potential liability upon them.
The list of principal issues
The grant of rights issue
 The parties have agreed a list of the principal issues. The list is annexed to this judgment as App 4. The grant of rights issue (so far as it is the subject of this trial) is addressed in paras 1 to 3 of the list. The court has been invited to assume (para 2), contrary to the defendants case, for the purpose of determining those issues, that the claimants will establish their pleaded case on causation, in effect that the obligation to implement the Insurance Directive had not been properly discharged, that this failure was sufficiently serious to give rise to an action for damages, and that it caused the loss claimed as alleged in the RRAPC.
The limitation issue
 The limitation issue is addressed in paras 8 to 12 of the list. It can be summarised for introductory purposes of this judgment as follows.
(i) It is agreed that the applicable limitation period is prima facie that prescribed by s 2 of the Limitation Act 1980, namely that [a]n action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.
(ii) The claimants primary case is that by reason of the European principle of effectiveness as applied in Emmott v Minister for Social Welfare Case C-208/90  IRLR 387,  ECR I-4269 the point for commencement of the running of the six-year period cannot be earlier than the date on which the Insurance Directive was fully transposed.
(iii) Alternatively, and also relying on Emmotts case, it is submitted that time does not begin to run earlier than the date on which the claimant knew or was in a position to know of the failure of the defendant to transpose the Insurance Directive.
(iv) Alternatively, even if the six-year period had expired before the proceedings were commenced, as a matter of domestic law and/or by reason of the European principles of effectiveness and equivalence, the court is required to apply s 14A of the 1980 Act, or a rule akin to it, so as to give each claimant the benefit of an alternative three-year period from the date on which he or she knew, or was in a position to know, that he had suffered loss by reason of the defendants failure to implement the Insurance Directive. It is said it is for the defendant to show, which it cannot, on the evidence relating to the ten sample names, that each claimant acquired the requisite knowledge more than three years before his or her claim commenced.
(v) In the further alternative it is submitted that the principle of effectiveness and the national law of continuing breaches causing loss, require that a claimant cannot be barred from recovering the loss incurred within the six-year period ending with the commencement of the claim, even if earlier losses are properly time-barred.
(vi) Finally it is submitted that if it is material to determine when, as a matter of domestic law, each claimants cause of action first accrued, it did so at the earliest when each first became liable to pay a contribution to syndicate underwriting liabilities as a result of the defendants failure to implement the Insurance Directive and not, as the defendant contends, on some earlier date on which a claimant was committed to underwriting or wrote business on a particular year.
 It is substantially for the purposes of the limitation issue that it is necessary to set out the history of the material events, keeping in mind that what is stated is derived largely from documentation not all of which may have been available to or read by the names.
The Insurance Directive
The long title and preamble
 The Insurance Directive is described in its long title, and in the first paragraph of the preamble, as being on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance.
 The word direct is, it is rightly agreed, used in contrast to reinsurance. The Insurance Directive is concerned with the insurance of original insureds by insurers, albeit, of course, the solvency of an insurer may be influenced by the efficacy of a reinsurance programme.
 As required by art 254 EC, the preamble to the Insurance Directive specifies the reasons on which it was based and identifies the proposals and opinions which were required to be obtained before it was adopted. The material part of the preamble is as follows:
Having regard to the Treaty establishing the European Economic Community, and in particular Article 57 (2) thereof;
Sources in the preamble
 Article 57 (now 47 EC) is part of Ch 2 of Title III of the Treaty. Chapter 2 is entitled Right of Establishment. Article 57 in its original form read:
1. In order to make it easier for persons to take up and pursue activities as self-employed persons, the Council shall, on a proposal from the Commission and after consulting the Assembly, acting unanimously during the first stage and by a qualified majority thereafter, issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications.
 The full name of the general programme is the General Programme for the Elimination of Restrictions on Freedom of Establishment. The material parts of the general programme are set out at paras 4.1.4 to 4.1.5 of the ASF. Title IV.C, to which specific reference is made in the preamble to the Insurance Directive, stipulated a timetable for the removal of restrictions on freedom of establishment for various undertakings, including direct insurance firms.
 The material parts of the Commissions proposal are set out at paras 4.1.6 to 4.1.9 of the ASF. The directive as eventually approved was based on the proposal and thus, unsurprisingly, there is nothing in the proposal itself which adds to or detracts from such arguments as arise from the wording of the directives recitals and articles.
 The material parts of the opinion of the European Parliament are quoted at para 4.1.14 of the ASF. The opinion addressed the solvency margin and a minimum guarantee fund to be based on rates for which the Parliament:
5. unanimously recognizes that the determining criterion for setting these rates should be the intention to protect insured parties, that is, the own capital endowment of an insurance firm should allow it, permanently and in every case, to execute the insurance contracts that it has concluded.
 The material parts of the opinion of the Economic and Social Committee are set out at paras 4.1.11 to 4.1.13 of the ASF. The opinion contains a discussion of the treatment of financial requirements and of the provisions relating to technical reserves, the solvency margin and the guarantee fund.
 The recitals in the preamble to the Insurance Directive (numbered by me) so far as relevant provide:
[i] Whereas by virtue of the General Programme the removal of restrictions on the establishment of agencies and branches is, in the case of the direct insurance business, dependent on the coordination of the conditions for the taking-up and pursuit of this business; whereas such coordination should be effected in the first place in respect of direct insurance other than life assurance;
The eighth, ninth and tenth recitals deal respectively with technical reserves, the solvency margin and the minimum guarantee fund. The eighth recital demonstrates that some aspects of co-ordination were to be reserved for later directives. It provided:
Whereas the search for a common method of calculating technical reserves is at present the subject of studies at Community level; whereas it therefore appears to be desirable to reserve the attainment of coordination in this matter, as well as questions relating to the determination of categories of investments and the valuation of assets, for subsequent Directives
 The reference in recital (ii) to ensuring adequate protection for insured and third parties and in recital (v) to insurance in respect of recourse against third parties and legal defence has been the subject of some debate. The claimants submit that the references demonstrate that the Insurance Directive is not limited in its objectives to freedom of establishment but extends to protection of insureds and third parties. But I do not think, as the claimants contend, that third parties is used in the sense of anyone at all who may in some way be affected by the matters which are the subject of the Insurance Directive. The third parties are those who are neither insureds nor insurers but may have claims against insureds who provide, for example, liability insurance or parties who are otherwise entitled to the benefit of insurance. The words are also used in recital (v) in the context of insurance against the legal costs of bringing a claim against a third party or defending an action brought by a third party. It follows that, in my judgment, these recitals are of no relevance to the grant of rights issue. If it had been intended, which was the target of the claimants submission, to include insurers (including names) as amongst those to be protected, it would not have been done so obliquely in a directive in which the objectives are clearly stated. Nor is there anything which could be (or is) put forward in the articles themselves to support the claimants submission.
Articles 1 to 5
 Articles 1 to 5 are General provisions. Article 1 identifies the matters with which the Insurance Directive is concerned. It provides:
This Directive concerns the taking-up and pursuit of the self-employed activity of direct insurance carried on by insurance undertakings which are established in a Member State or which wish to become established there in the classes of insurance defined in the Annex to this Directive.
 Articles 2 to 4 deal with the types of insurance and the insurance undertakings covered by the Insurance Directive. Article 5 contains definitions.
Articles 6 to 22
 Articles 6 to 22 are entitled Rules applicable to undertakings whose head offices are situated within the Community. Articles 6 to 12 provide for Conditions of admission; arts 13 to 21 for Conditions for exercise of business and art 22 for Withdrawal of authorization.
 Article 6 imposes the requirement that member states shall make the business of direct insurance subject to authorisation. Article 7 deals with the ambit, territorial and otherwise, of an authorisation.
 Article 8(1)(a) deals with the entities which can be authorised in the various member states. It refers to Lloyds underwriters. This was corrected in 1978 to the association of underwriters known as Lloyds. Article 8(1)(b), (c) and (d) direct that member states are to require insurance undertakings to limit their business activities, submit a scheme of operations and possess the minimum guarantee fund. It is apparent from the article, and the material in the ASF (paras 4.1.17 to 4.1.21) that the very particular nature of Lloyds was recognised in the drafting of the Insurance Directive.
 Articles 9 and 11 detail what the scheme of operations is to cover. Article 10 deals with agencies and branches of undertakings whose head office is in the territory of another member state. Article 12 deals with refusal to grant authorisation.
 Article 13 requires member states to collaborate closely in supervising the financial position of authorized undertakings. Article 14 deals with verification of solvency. Article 15 deals with technical reserves. Article 16 deals, in considerable detail, with the solvency margin. It contains references in that context to reinsurance. Article 17 deals with the guarantee fund. Article 18 deals with assets which constitute the technical reserves. Article 19 deals with the provision of accounting documents. Article 20 deals primarily with undertakings which are in financial difficulty. Article 21 deals with the assignment of policies.
Articles 23 to 29
 These articles deal with undertakings whose head office is outside the Community.
Articles 30 to 32
 These are transitional provisions.
 Article 35 requires implementation of the directive within 18 months of its notification (ie by January 1975).
Other travaux prparatoires
 Other material said to be travaux prparatoires is referred to in the ASF. The material comprises: (i) a report of the Economic and Social Committee dated 13 March 1967 (ASF, para 4.1.10); (ii) an amendment, in the event accepted, proposed by the Working Group on Economic Matters (ASF, para 4.1.15); (iii) a Commission working document referred to at para 4.1.16 of the ASF; (iv) internal Commission notes relating to Lloyds (ASF, para 4.1.17); (v) a Commission note dated 27 December 1972 relating to Lloyds (ASF, para 4.1.18); (vi) a working party note dated 26 February 1973 relating to Lloyds (ASF, para 4.1.20); (vii) various other notes referred to at paras 4.1.21 to 4.1.25 of the ASF.
 These materials were included at the request of the claimants. In the event no particular reliance was placed on any of them.
Amending and other directives
 The Insurance Directive has been amended on numerous occasions. Amending directives specifically mentioned in the claim and the ASF are Second Council Directive (EEC) 88/357 (OJ 1988 L172 p 1) (the Second Non-Life Directive) and Third Council Directive (EEC) 92/49 (OJ 1992 L228 p 1) (the Third Non-Life Directive).
The Second Non-Life Directive-Directive 88/357
 The Second Non-Life Directive (dated 22 June 1988) is described in its long title and in the preamble as being on the coordination of laws, regulations and administrative provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC. The preamble refers to art 57(2) (now 47(2) EC) and to art 66 (now 55 EC) of the Treaty. The latter concerned the freedom to provide services.
 The claimants rely on the Second Non-Life Directive only in their case on breach and not in connection with grant of rights. The recitals demonstrate that the primary purpose of the Second Non-Life Directive was co-ordination of laws, regulations and administrative provisions for the purpose of facilitating freedom of establishment, that the supervision and regulation of insurance undertakings was an important consideration relevant to that co-ordination, and that the need to protect policyholders, which is mentioned in a number of recitals, was also an important consideration.
The Accounts Directive-Directive 91/674
 Council Directive (EEC) 91/674 (OJ 1991 L374 p 7) (the Accounts Directive) is described in its long title and in the preamble as being on the annual accounts and consolidated accounts of insurance undertakings. The preamble refers to art 54 (now 44 EC) of the Treaty which is concerned with freedom of establishment.
 The claimants rely on the Accounts Directive not only in connection with breach but also in connection with grant of rights. The relevant paragraphs of the RRAPC read:
83 Moreover the Insurance Directive must be read with the 1991 Accounts Directive on the annual accounts and consolidated accounts of insurance undertakings, which amended the Insurance Directive and assists in its interpretation. Article 4 of the 1991 Accounts Directive provides that it shall apply to Lloyds subject to the adaptations set out in the Annex to that Directive, the said Annex requiring Lloyds accounts to show, inter alia, inter-syndicate business and provision for IBNR.
 Paragraph 5.2 of the ASF contains further information about the Accounts Directive. The relevance of the Accounts Directive was not, however, the subject of much debate. Rightly so, in my judgment. Not only is it somewhat of a stretch of the ordinary rules of construction to rely on a later directive to construe an earlier one, but I see nothing in the Accounts Directive to assist to that end in any material respect, save perhaps that the only specific stated purpose of the need for co-ordination of safeguards is not one of any relevance to the grant of rights issue.
The Third Non-Life Directive-Directive 92/49
 The Third Non-Life Directive is described in its long title and in the preamble as being on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239 EEC and 88/357/EEC. The preamble refers to art 57(2) (now 47(2) EC) and to art 66 (now 55 EC) of the Treaty. There are 33 recitals.
 The claimants rely on the Third Non-Life Directive only in their case on breach and not in connection with grant of rights.
 I do not think it difficult to identify from this material what was the purpose and objective of the Insurance Directive whether viewed on its own or as amended. It was to enable direct insurers (other than life insurers) to carry on their business throughout the European Community without discrimination either in favour of a home state of establishment or otherwise based on their place of establishment. Unsurprisingly, it was recognised that to achieve that objective it was necessary to coordinate the existing provisions in member states applicable to authorisation to carry on insurance business to avoid differences between provisions applicable to insurers in the home state and those established in other states. Again unsurprisingly, it was also recognised that to achieve equality or uniformity of opportunity the supervisory powers, including powers to withdraw authorisation, over insurers had to be coordinated so far as at the time was achievable.
 The existence of authorisation and supervisory powers in member states was, of course, the result of the perceived need to protect so far as possible insureds from the failure of insurers to honour their commitments. It is therefore also no surprise to find references to the protection of the interests of insureds (not reinsureds). But even if names can be said to have had a unique status, the status cannot in my judgment be equated with or even considered to be analogous to the position of insureds. I think the primary analogy is to an insurer with perhaps a secondary analogy to a shareholder or investor in an insurance company or firm. As a matter of basic impression, I think it is improbable that the Insurance Directive was intended or is to be construed as granting rights to insurers or shareholders or investors: that would be to describe the subject of supervision as having a right to be supervised.
The Lloyds Act 1982
 The expressed purpose of the Lloyds Act 1982 (the Lloyds Act) was to establish a council at Lloyds, to define the functions and powers of the council and to amend and repeal certain provisions of the Lloyds Acts 1871-1951. The council was given powers to regulate and direct the business of insurance at Lloyds and to make byelaws (s 6), to regulate admission to the Society, and for the host of purposes expressed in Sch 2 to the Lloyds Act. There was an exclusion of liability for damages (save for fraud) in favour of the Society of Lloyds at the suit of a member of the Lloyds community (s 14). It is not necessary to say more about the Lloyds Act, (further detail can be found in para 2.2 of the ASF), save to note that I think it understandably gave rise to the oft-quoted description of Lloyds as self-regulating.
The Insurance Companies act 1982
 The Insurance Companies Act 1982 (ICA 1982) made detailed provisions for the authorisation and regulation of insurance companies. By s 2(2)(a) insurance business carried on by a member of Lloyds was expressly excluded from the authorisation provisions of the ICA 1982 and by s 15(4) of the Act it was excluded from the regulation provisions provided that the requirements set out in Section 83 are complied with
 Section 83, so far as material, and as amended, provided that:
(1) The requirements referred to in 15(4) above are as follows.
 Section 84 (as amended) provided:
84. Lloyds underwriters-financial resources.-(1) Subject to such modifications as may be prescribed and to any determination made by the [Treasury] in accordance with regulations, sections 32, 33 and 35 above shall apply to the members of Lloyds taken together as they apply to an insurance company to which Part II of this Act applies and whose head office is in the United Kingdom.
 The effect, in general but sufficient terms, of this provision was to apply to the members of Lloyds taken together (in effect all syndicates) the requirement applicable to insurance companies to maintain a minimum margin of solvency (ss 32 and 33) and to keep assets in such a manner as might be prescribed (s 35). A breach of those obligations gave rise to powers in the Treasury to require Lloyds to take such action as appeared to be appropriate for the purpose of protecting policy holders or potential policy holders against the risk that [Lloyds] may be unable to meet its liabilities
 Section 86 (referred to in sub-s (7) of s 83) provided:
86. Statement of business by Committee of Lloyds-(1) The Committee of Lloyds shall deposit every year with the [Treasury] a statement in the prescribed form summarising the extent and character of the insurance business done by the members of Lloyds in the twelve months to which the statement relates.
 A new s 96A was inserted in the ICA 1982 by regulations made in 1990 which expressly referred to the Insurance Directive.
 Statutory instruments, both specific to Lloyds and of wider application but referring to Lloyds, made in 1979, 1981 and 1994 also referred to the Insurance Directive in explanatory notes.
The 1980 act
 Section 2 of the 1980 Act is quoted at (i) above. Section 14A of the 1980 Act was inserted by s 1 of the Latent Damage Act 1986. So far as material it provides:
(1) This section applies to any action for damages for negligence where the starting date for reckoning the period of limitation under subsection (4)(b) below falls after the date on which the cause of action accrued.
Chronology and facts
The Insurance Directive
 The Insurance Directive should have been transposed into national law by 27 January 1975 and should have been in force no later than 27 July 1976.
Decisions in America
 By the early 1980s, courts in America had established the strict liability of employers for asbestosis and the triple trigger test for the liability of insurers: see para 6.1 of the ASF.
 Applicants for membership of Lloyds were issued with brochures which spelt out the unlimited but several liability of a name. The brochures also contained paras 5 and 13 which addressed regulation and the Lloyds solvency test in these terms:
 Thus, any name who read the brochures, would have read that Lloyds had full powers of self-regulation but also that it was accountable to the government. The brochures were key documents alleged in Society of Lloyds v Jaffray  EWCA Civ 1101,  All ER (D) 399 (Jul) to contain the representations on which the names relied in their defence and counterclaim: see , below.
The Fisher report
 The Fisher report into self-regulation at Lloyds was published in May 1980. It was a substantial document. Chapter 2 was entitled, Statutory Control over the Insurance Industry. It included the following paragraphs:
2.01 In this chapter we seek to demonstrate the extent to which Lloyds is subject to statutory regulation, and how its freedom to regulate itself is thereby limited. We do not consider it to be the duty of this Working Party to consider the sufficiency or otherwise of the measures of statutory regulation which exist, or to suggest changes to them. The area with which we are concerned is that in which, by definition, there is no statutory regulation and Lloyds is left free to regulate itself. We are not, for instance, concerned with the adequacy of the regulations governing the Audit, in so far as these are regularly approved by the Secretary of State. We are however concerned with the effectiveness, or otherwise, of the steps taken by the Committee to ensure that statutory requirements are carried out by Members.
 Thus, any name who read the Fisher report would have known that there were a number of European directives, including the Insurance Directive, which affected them, and that there was statutory regulation of Lloyds. The report, of course, ante-dated the ICA 1982. The provisions of the Insurance Companies Act 1974 are summarised in para 3.3 of the ASF.
The Neville Russell letter
 On 24 February 1982, the chartered accountants, Neville Russell, wrote to The Manager of the audit department at Lloyds, on behalf of themselves and five other firms of panel auditors. The letter stated:
A substantial proportion of our Syndicate clients have losses, or potential losses, arising from asbestosis and related diseases.
The Murray Lawrence letter
 On 18 March 1982, the deputy chairman of Lloyds, Mr Murray Lawrence, wrote to all underwriting agents and active underwriters, with copies for information to all panel auditors, on asbestosis and the Lloyds audit at 31 December 1981. The letter stated:
Potential claims arising in connection with Asbestosis represent a major problem for insurers and reinsurers. It is therefore all the more important that the reserves created in the Lloyds Audit at 31 December, 1981, fairly reflect the current and foreseeable liabilities of all syndicates.
The ICA 1982 and the Lloyds Act
 Both Acts were in force by the end of January 1983. Their relevant provisions are set out above.
 In 1985 the Outhwaite 1982 year of account was left open because the liabilities were not capable of assessment such as to justify a RITC.
The Neill report
 The Neill report (Committee of Inquiry Report on Regulatory Arrangements at Lloyds chaired by Sir Patrick Neill QC) was published in January 1987. It was a very substantial document. Chapter 12 was entitled The Constitution. It included the following:
12.3 In chapter three we outlined the arrangements implemented under the 1982 Act for governing the Society. If the comparison is made between this structure and the regime envisaged under the Financial Services Act (outlined in chapter two), there can be little doubt that Lloyds will be less subject to external monitoring than the SROs which will be supervised by the SIB. This contrast is not as extreme, however, as some observers have suggested. Both the Department of Trade and Industry and the Bank of England have statutory functions in relation to Lloyds which give rise to a certain degree of external accountability. Moreover, the composition of the Council was specially designed so as to provide a check on the power of the working members.
 The appendix (App 14) to the Neill report, referred to in para 12.4, contained the DTIs submission on its functions in relation to Lloyds. It contained an accurate description of the relevant provisions of the ICA 1982.
 Thus, any name who read the Neill report would be aware that the DTI had statutory functions in relation to Lloyds in particular in relation to solvency of individual names and of Lloyds collectively. They would also have learnt of the authors view that these powers were directed towards the protection of the interests of policyholders rather than names though the latter may derive some incidental benefit from them.
 By way of illustration, in the June 1989 issue of ALM (Association of Lloyds Members) News there was an article on Reinsurance to Close. The article noted that it was rare for a syndicate to leave open a year of account but the 1982 Account changed all that because of the problems created by thousands of asbestosis claimants in America. The article continued:
Syndicates were dealt a further blow as environmental pollution claims threatened to dwarf the asbestosis losses. At the end of 1988, 76 syndicates had, between them, a total of 120 open years as a result of these claims and other market problems. Inability to compute the RITCs for those years has resulted in a marketwide problem affecting most of the members of Lloyds. None of the syndicates with these problems is in a position to close its open years of account. Indeed, the situation has deteriorated further this year with more syndicates reporting that they have had to keep open their 1986 Accounts.
 The August 1989 issue of ALM News reported on the 1986 year of account (exceptionally good) which would have been even more profitable but for the deterioration on prior years closed accounts. The article described the deterioration in these terms:
This is a sombre reflection of the fact that long tail asbestosis and pollution claims are hitting reinsurance to close brought forward from 1985 and earlier closed years of account nearly as hard as they are hitting the syndicates with open run-off years of account. The deterioration, during calendar year 1988, of syndicates with open run-off years amounted to £ 179 million.
 The February 1990 issue of ALM News included an article which, albeit stating the obvious, opened with the words:
Over recent years money has been flooding out of Lloyds in order to pay claims relating to policies written decades ago. These claims which relate to asbestosis and pollution losses were, until recently, completely unanticipated and therefore Lloyds syndicates were caught without adequate reserves. This is causing a strain on the current membership and is resulting in many Names paying for losses arising on policies written before they were born. This has occurred at the same time as Lloyds Syndicates find their reserves coming under heavy fire from the Inland Revenue resulting in Names being attacked on two fronts.
 These statements are, I think a fair reflection of the widespread nature of the crisis that enveloped Lloyds and of the timing of its revelation. Anyone who was then a member of a syndicate which was exposed to such mounting losses on RITC written in earlier years, or a member of a syndicate which had been unable to close its account for the same reason, would be all too aware of the losses to which he or she was already exposed and the continuing but unknown losses to which such names remained exposed and from which they had no means of escape.
The task force report
 In January 1991, Lloyds set up a task force to investigate and report on its long term future. The chairman of the task force was David Rowland. He submitted the final report of the task force to the chairman and council on 31 December 1991. On 11 January 1992 the chairman sent a copy to all names under cover of a letter stating that it would repay careful study.
 In section 6 of the report (reforms to current syndicate structure) and sub-s 6c (additional reserving) at para 67, the report stated:
At present, if it is to be allowed for tax purposes in toto, a managing agent is required by the Inland Revenue to set the syndicate RITC on a no profit/no loss basis. The agent also has a duty to set the RITC at a level which is equitable to both the reinsuring Names and the Names on the closing year. This approach presupposes that the RITC can be set with a certain degree of precision. In some cases it can, for instance for short-tail business, but in many cases it cannot. The RITC can often only reflect a subjective judgment arrived at after considering a wide variety of factors. Consequently, an RITC can, with hindsight, often be seen to have been wrong. It will have been set in good faith, drawing on all relevant information and using appropriate reserving techniques, but it can still prove insufficient. Thus the receiving Names must carry a risk that the RITC will prove inadequate (likewise they have a potential upside should the RITC prove more than adequate). The reality of this risk is emphasised in the 1988 Global Accounts which show a deterioration of £ 365 million in respect of prior closed years, following a deterioration of £ 1295 million in 1987. At present the tax regime encourages many underwriters and their advisers to set and agree an RITC premium which is likely to be allowed by the Revenue as not containing a profit element or risk premium.
 In section 7 of the report (managing old and open years) under the sub-heading Background to old years problem at para 7.8 it was recorded that:
The size of the old years problem first became apparent in the first half of the 1980s, and its impact on Names has steadily increased since then. Over the past 4 years, the cumulative prior year underwriting result has been a loss of £ 1.6 billion; each year has seen a steady rise (Exhibit 52). The impact of these prior year losses, coupled with the cyclical downturn in current underwriting profits, lies at the heart of the markets current difficulties.
 Chapter 14 of the report contained a set of proposals for a new structure of governance at Lloyds. The chapter included paragraphs on The Role of Regulation two of which should be quoted:
14.22 The regulatory change effected by the Council following the Lloyds Act 1982 has been substantial. The Neill Committee commented, the Council have acted with energy and determination in using their powers. They have transformed self-regulation at Lloyds. We know of no profession or equivalent organisation which has accomplished such a major programme of reform in such a short timescale. Other perspectives however offer a less positive view: the markets reputation has suffered in some respects over the past decade and certain Names feel that the regulatory system at Lloyds has not protected their interests; the market sees some aspects of regulation as more detailed and expensive than is warranted. A number of the submissions we received suggested that Lloyds would do well to pass regulatory responsibility to the DTI or some other outside government body.
 The task force report, therefore, stated that in many cases an RITC could not be set with precision and could often, with the benefit of hindsight, be seen to be wrong. It also spelt out the statutory solvency requirements of the DTI under the ICA 1982 and, echoing the Neill report, that they were for the protection of policyholders but not names.
 Mr Thomas-Everard was sent on 20 January 1992 a document, from a source which has not been identified, commenting on the task force report. The document stated that the very large losses being suffered by many Names were-
to a significant extent due to:
Meeting with John Redwood
 A Mr Mantle and Mr Thomas-Everard met with Mr Redwood, then Minister for Corporate Affairs at the DTI, on 26 January 1992. Mr Thomas-Everards evidence was that at this meeting Mr Redwood told them that Parliament had denied to the DTI the power to regulate Lloyds unless Lloyds was found to be insolvent.
 There is a note of the meeting prepared by Mr Mantle and sent to Mr Thomas-Everard at the time. The subject of the meeting appears from the note to have been about the powers of the DTI, Serious Fraud Office and Lloyds itself to intervene if issues of fraud or crime were involved, which Mr Redwood said he had no reason to suspect. The task force report was also discussed. The meeting ended with Mr Redwood asking to see the evidence Mr Mantle and Mr Thomas-Everard had to support the matters they raised. The note itself does not contain any reference to the regulatory powers of the DTI in the terms of which Mr Thomas-Everard gave evidence. He was adamant that someone at the DTI had also taken a note of the meeting (as one might expect) but no such note has been found despite what I accept has been a thorough and entirely appropriate disclosure exercise carried out by the defendant. The first written reference to Mr Redwoods words appears in another note of Mr Thomas-Everard written over three years later: see , below.
The April 1992 fax
 Mr Thomas-Everard also disclosed part of a fax sent to him in April 1992 which contained lists of current and expected allegations against respectively the Council of Lloyds, my members agency and various managing agencies. The former were said to include:
1. fraudulently and or negligently inducing my initial and continuing membership by wilful non-disclosure of material matters.
 In the course of cross-examination, Mr Thomas-Everard said this seemed to be a reasonably good list of what most people considered in 1992 to be the failures of Lloyds which had led to the enormous and continuing losses to which names were exposed.
The Morse report
 In June 1992, a working party chaired by Sir Jeremy Morse reported to Lloyds on A New Structure of Governance for Lloyds. The report records that the Council of Lloyds had rejected the proposals of the task force but in the light of the extensive discussion and support which they generated the working party had been asked to look at them again: see the ASF at para 6.2.19.
 The Daily Telegraph of 8 September 1992 reported on the response of cash-strapped Lloyds Names to the writs brought against them by Lloyds for payment of their liabilities. The article referred to some 200 writs and to the Writs Response Group (para 6.2.29 of the ASF) and to the names appealing to European law to skirt the immunity that is granted to Lloyds under British legislation so that the group can include a counterclaim against Lloyds in its defence. The proposed complaint to the European Commission was to be based on EC competition law.
The Boswood/Moriarty opinion
 On instructions from Richards Butler, Mr Anthony Boswood QC and Stephen Moriarty wrote an opinion dated 26 October 1992 addressing the question whether names who became members of Merrett Syndicate 418/417 for the first time for the 1984 and 1985 underwriting years had valid claims for damages arising from the closing into the 1984 or 1985 years of account of earlier years. If the earlier years had been left open those names would not have been exposed to the vast losses that confronted them. The syndicate had written run-off protections for US casualty exposures of other insurers whose concerns about their exposure had led them to pay the very large premiums demanded for the run-off cover. The opinion included the following passages:
For reasons which will appear, we entirely fail to understand how Mr Emney, Mr Merrett, or any other underwriter at the relevant times could possibly have reached the conclusion that he was better able than the cedant syndicate or company to predict the outcome of such claims on their accounts-or to make any such prediction at all with any degree of confidence that it would turn out to be right.
 Mr Thomas-Everard was a member of Syndicate 418/417. But regardless of who may have had access to the opinion, it reflects, I think, on the evidence, a general perception at the time amongst anyone working in Lloyds or indeed concerned with the losses they were suffering as names.
 On 27 October 1992 the Daily Telegraph reported that a group of names calling themselves the Lloyds Deposit Defence Group had filed a 100-page complaint with the European Commission under the competition rules then found in arts 85 and 86 of the Treaty of Rome on the basis that Lloyds was obliged but had failed to supervise the market adequately or to establish rules that would ensure proper working practices.
The Chatset guide
 As stated in para 6.2.22 of the ASF, in November 1992, Chatset published a guide to syndicate run-offs and commented on serious under-reserving for syndicates with books of US casualty business, stating that it was not in question, being found not only at Lloyds but right throughout the insurance industry. It was said that no one could make anything better than an educated guess at the final outcome. Tables were published of the increase in reserves made by the largest ten syndicates in the years 1987, 1988 and 1989.
 In a Lloyds Names Association Working Party (LNAWP) document, dated January 1993, reference is made to 25 action groups which were up and running and to the asbestos time bomb which was affecting the Lloyds market. The document refers to the Neville Russell letter, the closure of the 1979 account, despite the letter, and the alleged knowledge of Lloyds from 1979 onwards of the depth of the problem which had not been disclosed to the 19,000 names who had joined since (see para 6.2.23 of the ASF). The Neville Russell letter (see , above) had, of course, referred to the impossibility of determining the liability for losses arising from asbestosis. Plainly the letter was by now widely known and was the subject of publicity.
The names asbestos working party
 The names asbestos working party met on 11 January 1993 (the record of the meeting is wrongly dated 1992). Mr Stockwell was present as chairman of the LNAWP. Mr Dinkel represented the Writs Response Group. Ten other names were present. Mrs Mahon was sent the record of the meeting. She readily and rightly agreed in cross-examination that no one could read the record without realising that there was a problem which affected the whole of the Lloyds market and that reading it no one could fail to draw the conclusion that there was and had been a regulatory failure at Lloyds; a failure she described in re-examination as a general failure to regulate.
 The record of the meeting concluded by stating that the useful pool of information could only act as a spur to further investigation and the formation of a specific case against Lloyds. Those attending or to be supplied with the record were also reminded of the need for confidentiality in order to maintain the flow of information from the market. Again, as Mrs Mahon said in cross-examination, it was obvious at this stage that further investigation was both necessary and appropriate.
The open years panel report
 Paragraph 6.2.24 of the ASF records that by March 1993, Mr Stockwell of the LNAWP and chairman of the panel on open years which was appointed to report on the problem to Lloyds, reported that half of Lloyds names were now in law suits against Lloyds agents and underwriters, trying to recover damages for what they considered to be the failure of regulation and lack of professional standards. The open years panel identified six major causes for the ever increasing number of open years. Latent liabilities were the single largest cause, responsible for 42% of open years by number and 60% by stamp capacity. 26,000 names were exposed to open years with asbestos and pollution liabilities and, as Mr Stockwell wrote to the chairman of the market board in a letter dated 15 March 1993, some 15,000 to 17,000 names were by then engaged in litigation against Lloyds agents and underwriters. Reference was made to unquantifiable and potentially under-reserved liabilities in the context of RITC and the inability of the panel to ascertain the full extent of the future liabilities facing the market and the names. The report remarked that, given the widespread nature of the problem, the severity of names losses and the inadequacy of Lloyds responses, it was unsurprising that at least 12 of the actions under preparation were directed squarely at the question of run-offs caused by latent liability and alleged historic under-reserving, with further cases being planned. The report recommended the formation of NewCo (ie an entity of the kind eventually established as Equitas-see below) to take over the historic liabilities of syndicates pre-1985. (The claimants say: the report was treated as confidential to the Council of Lloyds and was not circulated to names. The defendant says: the report was not treated as confidential to the council, and was made available to all names to review in the Lloyds library following its publication in March 1993.) Whichever party is right about the dissemination of the report, its factual contents as recorded in the ASF are plain and were hardly a secret at the time.
The role of Mr Stockwell
 In a letter to Mr Middleton, the chief executive officer of Lloyds, dated 10 April 1992, the chairman of the Lloyds names asbestos working party wrote: Please understand that on all general matters Christopher Stockwell speaks for all Action Group Chairmen and thus represents some 16,000 Names.
 Mr Stockwell was present in court during at least most of the trial. He has played a pivotal role in seeking redress for names.
Lloyds business plan
 Paragraph 6.2.25 of the ASF records that in April 1993, Lloyds circulated a business plan to all names because of the problems of the past. The accompanying letter from the chairman of Lloyds pointed out that the current results were the worst in Lloyds history, that many members had been brought to the brink of financial ruin, that others were fearful for the future, that confidence in the Society had been shaken and that radical action was required. The alternative was said to be bleak. If the membership and the market would not unite behind the plan, then Lloyds itself might have no future. The extent of the crisis was apparent to anyone looking at this document. The plan was to act swiftly to end the uncertainties of open years and old liabilities and to build a new Lloyds with new independent regulation and higher professional standards, with lower costs and a strong-growing capital base. The restructuring which would take place would ring-fence the problems of the past.
 Paragraph 6.2.26 of the ASF states that in ch 3 of the business plan, the plan for managing the old year problems was spelt out. The continual inadequacy of reserving and RITC had led to the need for Lloyds to propose that we will develop the systems and controls necessary to improve the objective testing of the adequacy of the reserves for these liabilities and the reinsurance of the liabilities for 1985 and prior years into a properly capitalised reinsurance company.
 This, if it was not already all too apparent, was a clear recognition that reserving and RITC for the relevant liabilities had been inadequate and that the systems and controls for testing them required to be improved.
 The business plan carried forward the task forces proposal for the introduction of corporate, limited liability capital into the market. The proposal to manage the old years problem through an adequately capitalised reinsurance company (called the NewCo Project) eventually came to fruition with the establishment of Equitas as part of the R&R plan with the scope of the scheme expanded to cover liabilities for 1992 and all earlier years: see para 7.1.1 of the ASF.
Clementson and Mason: Saville J
 On 16 December 1993 Saville J delivered judgment on preliminary issues in the cases of Society of Lloyds v Clementson and Society of Lloyds v Mason reported at  CLC 71. The issues arose out of actions concerning claims by Lloyds for reimbursement from members of sums paid out of the central fund to meet the names liabilities. One of the issues was whether Lloyds had been guilty of anti-competitive practices contrary to the EC Treaty. Saville J held that the answer to this issue was No. Both in the pleadings and the judgment reference was made to the Insurance Directive. Saville J held that in exercising its powers to seek reimbursement for sums paid out of the central fund the Society was not engaged in activities which were subject to art 85 of the EC Treaty and nor was s 14 of the Lloyds Act capable of infringing the Treaty. In the course of his judgment, and addressing a submission by the defendant names about the Insurance Directive, Saville J said (at 86):
It seems to me to be clear beyond argument that the UK has a continuing obligation to comply with the directive. How it does so is a matter for the national government. In the case of Lloyds this country has chosen to permit the Society a large degree of self-regulation. If this self-regulation fulfils the requirements of the directive (and no one suggested before me that it did not) then the UK has performed its Community obligations in this regard. Thus on any view there is a close connection between the directive and the Lloyds Act 1982. It is true that only member states are bound by the directive, but that seems to me to be neither here nor there, for the question is whether the section in question is capable of being in breach of Community law, not whether the society itself is bound by the directive.
The first settlement offer
 The first Lloyds proposal for an overall settlement of the litigation in the market was in the form of a settlement offer document sent to approximately 22,000 names. This offer was rejected early in 1994 (see para 7.1.3 of the ASF).
Mason: The pleadings
 In Society of Lloyds v Mason, the defendant had instructed Mr Freeman. Mr Freeman instructed counsel who, following the decision on preliminary issues, settled, on 15 April 1994, further and better particulars of Mr Masons re-amended points of defence and counterclaim.
 Answer 1(i) stated:
All Lloyds officials, at all relevant times, were well aware that the whole basis on which the Lloyds market operated was as set out in paragraph 4 of the Re-Amended Points of Defence and Counterclaim. Such officials knew, at all material times, that it was difficult or impossible to determine with any, or any reasonable, certainty, the degree of risk assumed by syndicates, or the extent of the potential liabilities of syndicates, because of the particular features of the Lloyds market referred to in paragraph 4 of the Re-Amended Points of Defence and Counterclaim
 Mr Thomas-Everard agreed in cross-examination that these allegations were very similar to the allegations of a failure to regulate made both in the Jaffray litigation and in this case, albeit directed against Lloyds and not the DTI as they are in this case. In re-examination, despite Mr Plenders best efforts, essentially he confirmed those answers referring to the Neville Russell letter as the basis of the case that it was impossible to determine the risks being taken by the syndicates.
 The same evidence was given by Mr Thomas-Everard in relation to request and answer 3 which included the following:
3. Insofar as the Defendant intends at trial to make any positive case as to what Lloyds should do, whether in its regulatory function or otherwise, in order to seek to assess or control the exposures assumed by Lloyds syndicates, then give full and precise particulars of the Defendants case.
The LNAWP and the DTI
 Mr Stockwell, writing on behalf of the LNAWP, wrote to a Mr Hobbs at the DTI on 11 August 1994 (the letter was mistakenly dated 1984). The first two paragraphs of the letter read:
My attention has been brought to two matters fundamental to Lloyds solvency this year and I would appreciate your comments. I am aware that David Rowland says solvency is settled and in the bag but I still have questions!
 The letter to The Times referred to had been printed on 9 August. The letter included the statements:
If the DTI certifies Lloyds solvency this year and Lloyds is later shown to have been insolvent, then based on the EC Insurance Accounts Directive (91/674/EEC) in force from January 1, 1994, and the 1991 Francovich decision of the European Court of Justice, the British Government might well be liable for any ensuing losses suffered by both names and policyholders.
 The target of these letters was the DTIs responsibility for the solvency of Lloyds in 1994/1995 in the context of the Accounts Directive. Plainly, however, the possible relevance of European directives and the existence of Francovich liability were matters under consideration by some (including Mr Stockwell) who were seeking to address the losses of names.
Clementson and Mason: Court of Appeal
 The Court of Appeal (Bingham MR, Steyn and Hoffmann LJJ) delivered their judgments on appeal from Saville J on 10 November 1994. The decision is reported at  CLC 117. The court allowed the appeal. It decided that, to quote the headnote (at 117-118):
Lloyds was capable of being regarded as an association of undertakings within the meaning of art. 85 of the EC Treaty. Certain decisions taken by Lloyds had the potential to affect trade between member states and to distort competition in the common market. It followed that the issue of whether Lloyds had infringed art. 85 could not be determined as a preliminary point of law but should proceed to trial to be decided on the evidence.
 In the course of his judgment (at 123-125) Bingham MR referred to the Regulatory background including the Insurance Directive. He described the ICA 1982 as enacted in part to give effect to the obligation of the UK under the directive. Although, in his evidence, Mr Freeman asserted that Bingham MR had said that the ICA 1982 properly transposed the Insurance Directive into national law, I do not think he did. It was not before the court as an issue; Saville J had expressly declined to say more than I have quoted at  above, and I think Bingham MR meant no more than he said as quoted in this paragraph. Indeed, if it were otherwise, it would be a nice question as to whether or not the issues of breach and relating to government statements were ones which this court should, and the defendant was entitled to, approach as authoritatively addressed, even if not decided as a matter of precedent, unfavourably to the claimants.
The stance of the DTI
 Complaints by names about the role of the DTI in relation to Lloyds developed throughout 1994. There are numerous examples in the documents. Largely because Mr Freeman described it as the best prcis of the DTIs position as at 1994 that he had been able to find, I shall refer to a letter from a Mr Brebner of the insurance division of the DTI to a Mr Bingham dated 10 November 1994. Mr Brebner wrote:
On solvency the position remains as I described it in my previous letter, ie that subject to the completion of the detailed checking, Lloyds has met the statutory requirements. We do not anticipate any problem completing the scrutiny, but I am sure you will understand that the checking of the certificates for over 33,000 Names does take some time.
 It is, in my judgment, hard to criticise this letter as a description of the role of the DTI; certainly it does not in any way seek to obscure the role of the DTI in monitoring the solvency of Lloyds which, in substance, is the role of which complaint is made in these proceedings. The letter does assert that the DTI discharged its duties, including ensuring an increase in the level of reserves (a point itself the subject of criticism as the next reference demonstrates) but that should hardly have surprised the reader or anyone else who was advancing, or might be seen to be considering whether or not to advance, a claim against the DTI.
The LNAWP submission to the TCSC
 On 1 December 1994, the LNAWP made a substantial written submission to the Treasury and Civil Service Committee (TCSC) on self-regulation at Lloyds. The submission included a preface, signed by Mr Stockwell. The preface included the following:
This submission was started several months ago when the Treasury Select Committee announced its intention to investigate self-regulation at Lloyds. During the last few months, the Names have won some important legal victories and it has become clearer to the General Public and the Press that they are the victims of one of the worst regulatory failures the City has ever seen. The Appeal Court has ruled there must be a trial of the Names allegations that Lloyds has been in breach of European Law since 1982 and that some of its fundamental arrangements are illegal. If the Names win their case then they will be eligible to pursue substantial claims for damages against the Society, which would have no immunity from suit in that eventuality, and against the government which had approved the arrangements complained of
 The text of the submission itself included the following:
Names perceive the present structure of regulation at Lloyds has tended to view the protection of policy holders as being more important than the protection of Names and question the close relationship between the DTI and the Corporation of Lloyds.
The Government has had a role in permitting the under-reserving of the Society and in failing to maintain protection for Names. The DTI in pursuit of its objective of protecting policy holders has colluded in a systematic misrepresentation of the adequacy of the Societys reserves to the Names.
The Names losses in the last few years are the result of a systematic failure of self-regulation at Lloyds over the last decade.
The protection of policy holders has been interpreted as complying with the statutory solvency requirements of the DTI under the Insurance Companies Act of 1982. The experience of the last 4 years would suggest that this was inadequate to ensure proper protection for policy holders, since we stand on the brink of a significant default. The lack of any apportionment of capital in relation to risks has meant that the market has taken on a disproportionately large amount of long tail high risk business for which it is totally unsuited. The poor standards of underwriting, management and professionalism that have been evidenced in a succession of Loss Review Committee reports, have also demonstrated the vulnerability of policy holders as the solvency of the market progressively collapses as a consequence of past regulatory failures.
 Mr Stockwell, as chairman of the LNAWP, was here asserting in a document addressed to the TCSC that names had a number of potential claims against the DTI in respect of its conduct and their losses.
The LNAWP and the TCSC
 At a public hearing before the TCSC on 30 January 1995, Mr Stockwell informed the committee that the LNAWP brought together the majority of action groups concerned with litigation at Lloyds and that is now some 34 or 35 which are associated with us; there are half a dozen who are not. We are circulating a newsletter each month to some 23,000 Names. Although the size of the circulation figure came as a surprise to Mr Sinclair, there is, as he acknowledged, no reason at all to doubt its accuracy.
The LNAWP newsletter February 1995
 The newsletter addressed the prospect of a new settlement offer. It asked the question: Would Names also give up their right to litigate against Lloyds and the DTI for further compensation or the recovery of their deposits?
 Mrs Mahon said that if those in charge of the action groups thought it was worthwhile to bring an action against the DTI she would have expected them to tell her and do it.
 The newsletter also stated that:
The evidence now exists that the cover-up of asbestos liability goes beyond negligence and incompetence. Members of the Council were involved with syndicates where the reserves were not being set to provide for ultimate liability. They knew that attorneys reports were coming in to the Society advising of huge future asbestos liabilities.
Inside Eye March 1995
 Inside Eye was an independent monthly news magazine from the Lloyds market sent to working names. In the March 1995 issue it contained an article by a Mr E Harborne, on a hearing before the TCSC on 16 February 1995, entitled: Can we sue the DTI?. The article included the following:
I attended the hearing of the above on 15th February at which three men from the DTI gave oral evidence. Their spokesman was a Mr Spencer.
Names Defence Association paper
 The Names Defence Association produced a paper in March 1995 entitled Lloyds of London. It included the following remarks:
The present Conservative Government risks being embarrassed before Lloyds problems are resolved. The Department of Trade and Industry is seriously implicated.
Research findings indicate that neither the DTI nor Lloyds regulators adequately monitored the spread and magnitude of underwriting risks in individual syndicates on any regular or systematic basis. Nor did they properly monitor the spread and diversification of the financial assets of individual syndicates.
The DTI has the ultimate responsibility for regulating the solvency and wellbeing of Lloyds. It has clearly failed.
The DTI also has a statutory responsibility to protect the interests of insurance policyholders, whether of Lloyds policies or of other British insurers. Names at Lloyds, because of their status as RITC, excess of loss re-insurance, E&O insurance, or personal stop-loss policyholders, must represent numerically the largest group of policyholders at Lloyds. As was evident at recent hearings of the Treasury Select Committee, the DTI has so far not considered the interests of Names as policyholders.
Indeed, a number of them [names] now believe that they will be forced in due course to look to the Laws of the European Community and the United States of America. Already the Writs Response Group is sponsoring the defence of Mr John Clementson against a solvency writ from Lloyds, his defence being based on alleged irregularities and infringements of European law by Lloyds concerning inter alia its operation of the Central Fund.
Inside Eye April 1995
 The April issue of Inside Eye contained an article entitled, The DTI is wrong. The article included the following:
Since-under European law-the DTI bears the ultimate responsibility for ensuring that Lloyds is solvent, the DTI may risk liability if the Central Fund runs out. There is a precedent. In the leading European case of Francovich, the Italian government was compelled to compensate employees because it had failed to implement a directive concerning the compensation of workers in cases of employer insolvency. In the same way, the UK government could be made to pay out to policy holders because it failed to reconcile the legal relationship between Names and Lloyds with the provisions of the Insurance Companies Act 1982 which was enacted in order to comply with the EC First Non-Life Directive of 1973. To comply with EC law, the DTI assesses Lloyds solvency to continue trading on the basis that all Names are liable for the debts of others. But if Lloyds were to collapse, that would not be the position: each Name would only be obliged to cover his own responsibilities. So if Lloyds ever did crash policy holders could well be looking to the DTI to make up their losses. Even if the litigation never came to such a pass, the implication of DTI responsibility could trigger a change away from its current Pontius Pilate-like stance. Lloyds and its Names could therefore have a strong political card to play against the DTI.
 As Mr Thomas-Everard agreed, anyone reading this would have appreciated the potential relevance of European law to the issues being raised by names. He even went so far as to acknowledge that he quite possibly asked some of the lawyers involved whether a claim against the DTI on such a basis had legs. But, he said, if he did, the answer would have been No as he believed then, as Mr Hay Davison also did, that English law was stronger than European law. The various action groups had access to skilled legal advice.
The Association of Non-North American Names
 The potential relevance of the Insurance Directive was known to this association (later renamed UNO). A letter signed by their co-chairman, addressed to Mr Spencer at the DTI, and copied to the European Commission, dated 1 May 1995, raised the question whether the names litigation proceeds held in escrow were to be excluded from Lloyds solvency tests for 1996 in accordance with art 16 of the Insurance Directive.
The TCSC report
 The report of the TCSC was published on 17 May 1995. It covered financial services regulation generally but included a section on self-regulation at Lloyds. The report summarised (accurately) the role of the DTI as outside solvency regulator under the ICA 1982. It also quoted Mr Stockwells criticisms of the DTI in the context of the spiral (a major failure of regulation) in the 1970s and 1980s, and in setting minimum reserving percentages which always seemed to have worked on the assumption that a profit was inevitable and were set at 100% or less when an appropriate figure would have been 300% whereby a problem that was developing would have been nipped in the bud rather than becoming a full blown catastrophe.
 Lloyds new settlement plan, Reconstruction and Renewal was published in May 1995: see paras 7.1.4 and 7.1.5 of the ASF.
Thoughts from the Shearing Shed
 Mr Thomas-Everard prepared a document entitled Thoughts from the Shearing Shed dated 22 June 1995 which he circulated to a list of people whose names he could not recall when giving evidence. The document included an analysis of the provisions of the ICA 1982 applicable to Lloyds. It also included a reference to the meeting with John Redwood in 1992 and a rather broader comment on the ICA 1982 and the Lloyds Act as follows:
 Whatever was said by Mr Redwood at the meeting in January 1992 (see  and , above) this document (and the memo referred to below from Mr Donner) demonstrates that Mr Thomas-Everard was not misled by it and was well able to analyse the ICA 1982 and the Lloyds Act for himself.
The governments response to the TCSC
 The government prepared a response to the TCSC report which was published on 19 July 1995. It included the following:
DTIs role in the regulatory regime
 Mr Donner was a members agent recruiting mainly in Australia and New Zealand. Mr Donner was in contact with Mr Thomas-Everard and copied correspondence to him. On 25 September 1995 Mr Donner wrote to Jonathan Evans MP at the DTI stating:
whilst I do understand that your departments statutory duties are concerned primarily with solvency supervision, your departments responsibilities do indeed also incorporate areas apart from solvency responsibilities, as has become clear from my careful reading of both the content and the implications of the Act to which you refer.
 Mr Thomas-Everards attempts to explain why Mr Donners views of the powers of the DTI should be wider or different from those attributed to Mr Redwood at the meeting in 1992 did him little credit. Indeed on the 25 September itself Mr Donner sent Mr Thomas-Everard a memo enclosing this letter stating that he believed his correspondence with the DTI had established two significant points which were:
1. It is the DTI that have ultimate responsibility for the supervision of Lloyds. Furthermore and more importantly, whilst the DTIs responsibilities are concerned primarily with solvency requirements, this is certainly not their only responsibility.
 Mr Donner also corresponded with Mr Brebner at the DTI. He wrote on 20 November 1995:
It is perfectly clear that the question put to you has nothing whatsoever to do with, as you state: I fear that I am in no position to judge how long observers of the market might have been under misapprehensions about the setting of reserves. It does, and as you well know, have everything to do with the number of years that the DTI have, in effect, condoned deliberate under-reserving (effectively a policy of stair-stepping) of the Non-Marine all other $ US business.
4 My allegations against the DTI are in no way based on a false premise, as you seek to suggest.
I am, of course, aware that the setting of Minimum Percentage Reserves, one of two elements of the way in which solvency purposes were and are determined. I repeat, however, that MPRs are arguably the most important single financial regulatory task undertaken annually by the DTI. As your minister correctly stated: The MPRs are the back-stop to prevent the figures being too low.
I repeat also that when the curtain surrounding the activities of the DTI and the insurance Division in particular, at the material time, are finally drawn back (as they will be) it will be found that this has been a case of the most monumental incompetence, with the left hand knowing not what the right hand was doing and, even if the left hand wished to know what the right hand was doing, the Insurance Division simply did not have the monitoring ability and machinery to be able to put into effect their statutory regulatory obligations (ie. proper monitoring of the figures).
I repeat, therefore, the fact that this major Regulatory and Solvency failure is the direct responsibility of the DTI and the consequences of such failure are all too tragically clear. It is also extraordinary to me that you should seek to deflect the truth and the enormity of the DTIs failure by resorting to such false statements. The figures which should be in your possession and which should have been both monitored and acted upon demonstrate the truth of what I say.
The DTI paper on 22 December 1995
 Mrs Maybury disclosed (and her husband annotated) a paper prepared by the Insurance Division of the DTI dated 22 December 1995 entitled DTI Comments on the discussion paper prepared by the Lloyds Names Association Working Party on an alternative to R&R. The DTI paper criticised the working partys discussion paper for an incorrect description of the statutory solvency requirements placed on Lloyds by the ICA 1982 because the requirements were assessed not only on a global basis but also at the level of each individual name. The former requirements were said to be laid down in the ICA-and indeed the relevant European Directives. Mrs Maybury agreed, as this and other documents disclosed by her demonstrated, that she knew by the beginning of 1996 that there were insurance directives relevant to the regulation of Lloyds. There is little to suggest that Mrs Maybury was in a better position than any other name to reach this conclusion.
 Newsletter 5 of the Association of Non-North American Names dated April 1996 included a heading, The Case Against the Government with the text:
The prospect of obtaining compensation from the D.T.I. for their failure to regulate has for some time been a possibility. A government department can now be sued under English as well as European law. A paper is enclosed which may be of interest.
 The paper had been prepared by Catherine MacKenzie-Smith (a barrister). It referred expressly to Francovich v Italy  IRLR 84,  ECR I-5357 and Ex p Factortame Ltd  All ER (EC) 301,  ECR I-1029. It suggested two respects in which Community law might have been contravened such as to make the government liable in damages and stated that a suit for damages based on the above arguments will shortly be submitted to the European Court of Justice. The paper also said it was putting forward these ideas for discussion. Any comments or suggestions are welcome.
 Whilst the ideas were not those presently before the court and no suit was ever presented to the ECJ, the newsletter and paper are evidence of the wide range of skills, researches and ideas available to concerned names.
 On 7 May 1996, Cresswell J handed down judgment in Society of Lloyds v Clementson  CLC 1590 after the successful appeal to the Court of Appeal (see , above). Lloyds succeeded on the claim and Mr Clementsons counterclaim failed.
Complaints to the Ombudsman
 From about March 1996 onwards various names made complaints to the Parliamentary Ombudsman in relation to the DTIs regulation of Lloyds. Mr Maybury (Mrs Mayburys husband) made such a complaint by letter dated 20 May in, probably, 1996. The letter stated that: As Names my family have suffered substantial losses as a result of this regulatory failure and are entitled to redress. Mrs Maybury said the letter was intended to get the DTI to take some action in the context of R&R and was defensive against Lloyds not a threat to sue the DTI.
 Also probably in 1996, and before the formal R&R settlement offer, Mr Maybury wrote again to the DTI complaining about a lack of response and the approach to stop loss policies in the R&R proposals stating:
I believe that Lloyds is acting outside the powers of its constitution in doing this and that the D.T.I. may be answerable for its actions in approving it under European law. Counsels opinion is being sought now on those and other related points.
 In cross-examination, Mrs Maybury said she and her husband had not sought counsels opinion but probably someone else had said they were doing so. She believed people were consulting here, there and everywhere and her husband was piggybacking on the back of that. The evidence strongly suggests that her belief was right.
The UNO letter of 20 July
 On 20 July 1996 UNO circulated a letter to names to address issues which would arise post R&R. The letter included the following statements:
We believe there is a good chance the Clementson Case based on European law issues will eventually succeed in the European Courts. If it does not, or possibly in parallel, we will proceed to defend Names against writs from Lloyds or Agents with the Fraud defence.
As you know the fraud evidence has been reviewed a number of times in the United States in open court Many thousands of hours of work has gone into accumulating the vast quantity of evidence now available in the United States That evidence has all been made available to the English Defence Groups.
A substantial quantity of the evidence have been reviewed [sic] by [leading counsel]. They have said:
R&R settlement offer
 The formal R&R settlement offer was sent to names on 30 July 1996. It related to 1992 and prior underwriting liabilities. It included a finality statement which set out your 1992 and prior underwriting liabilities and the credits available to assist you in meeting these liabilities. The letter from Lloyds CEO which enclosed the offer also included the following:
I urge you to read this document very carefully and to take advice from your lawyer, financial or other appropriate adviser on the terms of the settlement offer and your finality statement as soon as possible but, in any event, so that you are able to meet the deadlines for acceptance and payment.
 Thus, on receipt of this offer, all names were aware of their liabilities on 1992 and earlier years. The R&R settlement was concluded and Equitas established on 2 September 1996. The time limit for acceptance by names was extended to 11 September.
 If the six-year limitation period was applicable, and the issue is whether or not the cause of action had accrued to names before the expiration of that period, the key date at which to address that issue is 2 September 1996. If the cause of action had accrued at that date the claim would be statute-barred.
Miss Stewart-Smiths petition
 On 6 November 1997, Miss Stewart-Smith sent a petition to the President of the European Parliament. She said, and I accept, that the petition was all her own work (assisted by staff at the Commissions London office). Miss Stewart-Smith is a formidable and intelligent woman. Her petition included the following:
My researches of the European Treaty and the 73/239 First Council Directive have shown that the solvency requirements for Lloyds of London must have been unreasonably modified for it to have been possible to produce accounts without the disclosure of formidable known losses
 These complaints resemble those made in these proceedings. They allege a failure properly to implement the directive. They allege a flawed system. They seek compensation. It was not until May 2006 that the Committee on Petitions informed Miss Stewart-Smith that in April 2006 the decision had been taken to close her petition. This was said to have been more to do with the limits imposed on the powers of the Community Institutions by the EC Treaty than with the substance of your case. The letter also referred to a statement made by the President of the European Parliament to the Parliament on 3 April that-
parliaments most recent resolution on the subject, in June last year, confirms its impression that there are substantive and reasonable grounds to believe that the First Non-Life Insurance Directive and its later modified versions were not properly transposed and applied in the UK.
The Jaffray defence and counterclaim
 The defence and counterclaim in Society of Lloyds v Jaffray were served on 21 November 1997. Mr Freeman acted for some of the defendants. They were names who had not accepted R&R. The target was to put forward a counterclaim in fraud. Part of that plea was to allege (in para 29) that the Lloyds brochure had represented that because of the way in which Lloyds regulates and monitors underwriting accounts year by year the defendant could rely on his syndicate accounts and could in underwriting and/or deciding whether to remain a member of Lloyds have confidence in the audited syndicate results for results of past years and-
could be sure that Lloyds as part of its regulatory duties would ensure that when prospective liabilities were being reinsured by one syndicate year into another, such liabilities were being fairly assessed and quantified as between the two syndicate years.
 It was alleged that these representations were false and made knowingly or recklessly without any honest belief in their truth. The allegations of falsity (para 34) included allegations that Lloyds failed to regulate properly or at all the manner in which such syndicates or their auditors reserved for and accounted for such potential liabilities and-
in relation to the closing years of syndicates exposed to asbestos-related claims failed to implement or apply appropriate audit regulations with the result that an equitable premium for RITC as between the reinsuring members and reinsured members was not assessed and charged having regard to the nature or amount of the liabilities to be reinsured.
The Observer-1 February 1998
 A substantial article in the Observer of 1 February 1998 was subtitled Fresh Evidence questions DTIs role in policing the market. It included the statement:
Much of the speculation is and will remain exactly that-speculation unbuttressed by hard evidence. But on the particular issue of the DTIs unchallenging attitude towards Lloyds during the Eighties the new evidence could tip the balance.
 Mrs Mahon agreed, sensibly and realistically, that if by this stage someone did have doubts about the DTIs position, on reading this article they would realise that there was at least a case to be investigated as to the DTIs responsibility.
The LNA letter
 On 3 March 1998, Mr Stockwell the chairman of the LNA (the LNA replaced the LNAWP following acceptance of R&R) wrote to the DTI in the context of the transfer of regulatory functions from the DTI to the Financial Services Authority and the perceived need for some body to be responsible for protecting names. He wrote:
I am concerned that we get the issue of duties and powers aligned. I am sure you recall that Directive 73/239 imposes a duty on member governments to regulate the insurance market. It follows that if the duties are not correctly delegated along with the powers, then presumably the duties stay with the national government making the national government liable for the failure of the delegated body to exercise its powers.
 The DTI (Mr Walton) replied on 11 March. He wrote:
it is, I think, straining the statutory language to say that the Council [of Lloyds] has a duty to protect Members. In this context you referred to the Directive 73/239. The obligation to implement the Directive in the UK properly and on time does, indeed, fall on the Government. That obligation has been discharged and we do not consider, therefore, that any liability falls on the Government.
 Once again, Mr Stockwell was promoting the Insurance Directive as a basis for a claim against the DTI. The response of the DTI plainly acknowledges the duty to implement the directive, but, unsurprisingly, denies any failure to discharge the duty.
2 September 1999
 If it be right that the relevant limitation period is determined by a knowledge test and runs for three years after the relevant knowledge has been or ought to have been acquired by the names, that test falls to be applied to such knowledge as it existed at 2 September 1999.
Jaffray: Cresswell J
 The trial in Society of Lloyds v Jaffray began in February 2000. On 3 November 2000, Cresswell J handed down judgment on what was described as the threshold fraud point. He decided that Lloyds had made none of the representations alleged to be contained in the brochures and that the names had failed to prove fraud.
 In the course of his judgment (at 108) Cresswell J, in setting out the background to the audit/accounting process, referred to the Insurance Directive and the ICA 1982. He said s 32 of the ICA 1982 implemented art 16 of the Insurance Directive and s 84(1) of the ICA 1982 had the effect of making s 32 applicable to the members of Lloyds taken together, the global test. Although Mr Freeman also (see  above) sought to place some reliance on this, the requirements of the Insurance Directive were not in issue in Society of Lloyds v Jaffray. I do not think Cresswell J was saying more than what was the unchallenged understanding of the parties, which may, of course, yet prove to have been correct should these proceedings go further.
 At the conclusion of his judgment (at 432), Cresswell J added some general observations the first of which was that:
I refer to all the reforms etc described in this judgment implemented as the result of the Fisher report, the Neill report and the very considerable efforts of men and women of undoubted integrity, independence and standing. Despite all the reforms etc the catalogue of failings and incompetence in the 1980s by underwriters, managing agents, members agents, and others (established by judgments of the court, by disciplinary hearings and other means referred to in ch 24) is staggering (and brought disgrace on one of the Citys great markets).
The NACDE report
 At the end of December 2000 UNO felt it would be helpful if a report was prepared for the European Commission that set out the ways in which it was believed the British Government had breached the European Directive 73/239. UNO and LNA asked Mr Stockwell to prepare the report and NACDE took on responsibility for its publication. The report itself (the blue book) was submitted to the Commission in draft in March 2001 and printed in June 2001. It was a substantial document of 73 pages in length. It alleged many breaches by the DTI of various articles of the Insurance Directive.
 This request to Mr Stockwell and the report ante-dated the judgment of the Court of Appeal in Society of Lloyds v Jaffray  EWCA Civ 1101,  All ER (D) 399 (Jul) by more than a year.
The NACDE 17 September 2001 letter
 Mr Stockwell, on behalf of the NACDE committee, wrote on 17 September 2001 to European Names and former Names at Lloyds. He wrote:
The English courts have commented on the staggering catalogue of failings and incompetence that represents the Lloyds saga in the last twenty years. It is our belief that the catalogue has only been possible because of the complete failure of the British Government to regulate Lloyds in accordance with European law. Following on from complaints and petitions by various Names to the European Commission and European Parliament, the Commission has launched an investigation into whether or not infringement proceedings are appropriate. A decision by the Commission is imminent.
 The reference in the first line was to the observation of Cresswell J in Society of Lloyds v Jaffray (3 November 2000, unreported): see , above. The enclosed letter included the following:
I have suffered substantial loss as a consequence of my membership of Lloyds. Along with over 30,000 other Names who joined Lloyds, I have been made liable for a share of the losses that Lloyds has incurred in business written in the United States. I believe there is strong evidence that Lloyds syndicates had not properly reserved for that business as required by Directive 73/239 and that I was improperly made liable for a share in those losses
 Thus, also before the judgment of the Court of Appeal in Society of Lloyds v Jaffray, Mr Stockwell on behalf of NACDE (the instigators of the present claim) was asserting that there was a basis for the Commission to take infringement proceedings against the government and if it did so and succeeded this would result in the names obtaining compensation for their losses from the government. Essentially that is the present claim, save only that it was aimed at the Commission investigating the possible failure of the government to comply with the Insurance Directive rather than the names taking that on by the Francovich/Factortame route. The judgment of the Court of Appeal in Society of Lloyds v Jaffray was not available for another ten months.
Jaffray in the Court of Appeal
 On 26 July 2002, the Court of Appeal (Waller, Robert Walker and Clarke LJJ) handed down their judgment on the appeal from Cresswell J (3 November 2000, unreported) in Society of Lloyds v Jaffray  All ER (D) 399 (Jul). The courts conclusions were summarised at . So far as relevant, they were that:
(i) There was a representation in the 1981 brochure that there was in place a rigorous system of auditing which involved the making of a reasonable estimate of outstanding liabilities including unknown and unnoted losses (para 321).
 It is the judgment of the Court of Appeal holding that representations were made and were false which the present claimants say was the revelation which first led them to appreciate that the present claim was or might be sustainable. It is therefore important to set out what the court did say in those paragraphs in the judgment which led it to the conclusions expressed in sub-paras (i), (ii) and (v) of . Further the court set out (in ) its Recapitulation of pleaded case as follows (with my emphases):
The names case is that the brochures issued from time to time by Lloyds contain fraudulent representations upon which they relied when deciding whether to become names. In ch 22, the judge correctly identified the alleged representations in the brochures as representations to the effect that a name joining Lloyds:
 The court addressed these allegations in -. So far as relevant, and with my emphases, those paragraphs read as follows:
 In short a central representation in the brochure is that there was in existence a rigorous system of auditing which involved the making of a reasonable estimate of outstanding liabilities including unknown and unnoted losses In these circumstances the judge should have held that that the brochure contained representations by Lloyds to that effect.
 The court addressed the question whether the representation which it had found to have been made in the brochures was untrue in paras - as follows:
 It is clear that detailed consideration was given each year by the audit department at Lloyds, the audit committee, and the committee as to the instructions to be given to underwriters and auditors. All this was intended to produce a system that enabled proper RITCs to be produced and proper certification of solvency. But was the system actually producing a result where audit reserves were being calculated in a way that involved the making of a reasonable estimate of outstanding liabilities including IBNRs?
 Cooke J said in Society of Lloyds v Laws  EWHC 873 (Comm) at —
it seems to me that all the names needed to know was that there had been a history of under-reserving and a history of inadequate provision for RITC over many years in order to see that the Lloyds representation, as defined by the Court of Appeal, was false
 I agree. On the evidence before me, that history was known, or at the least should have been known, to names before, indeed long before, 3 September 1996. Once it was determined that there had been a representation that in fact the system involved the making of reasonable estimates of outstanding liabilities, including IBNR, it was easy to conclude that the representation was untrue. But it was or should have been easy to reach that conclusion of itself, had it been thought to be material to a successful claim, which, of course, the Court of Appeal, in the event, held it was not.
 It follows that I have great difficulty in understanding or accepting the case for the names, strongly supported by Mr Freeman, that the judgment of the Court of Appeal, and in particular the finding that the system of auditing had not been producing reasonable estimates of outstanding liabilities, was the trigger for the present claim which would not or could not have been brought without it. I can understand that, having lost the war, it was helpful that the Court of Appeal at least said what it did and that minds turned to consideration of what, if anything, might be made of it. As Mr Friedman QC said, it may have given comfort as to the prospects of success in a claim alleging regulatory failures, but I do not think that the supposedly revelatory nature of the finding is sustainable. I do not mean by that to question the integrity of the evidence given by the names, albeit none of them who sought to do so were, I think, able to justify their view that the finding was revelatory. Names were not well placed to appreciate or analyse the basis or nature of the judgment of the Court of Appeal. Mr Freeman, who was well placed to do so said the difference between what was alleged by the names in Society of Lloyds v Jaffray and the conclusion of the court was the difference between an allegation that a deficient system was in place and that no system was in place. I think in context that is a distinction without a difference. As the Court of Appeal said ( All ER (D) 399 (Jul) at ) the representation the court found to have been made was much more limited than the representations alleged. The system had not done what it was represented that it would do. Moreover, I do think that every fact of any materiality to the conclusion of the court, on which so much reliance is sought to be placed was at the very least apparent before the conclusion was expressed in the terms it was, and indeed had been so for a substantial time. This (and indeed knowledge of the relevant law) is, I think fully supported by the request for and NACDE report in December 2000 and June 2001 and the NACDE 17 September 2001 letter (see -, above). It is also, I think, confirmed by what follows in relation to the NACDE 19 August 2002 letter and the present pleadings.
The NACDE 19 August 2002 letter
 On 19 August 2002, Mr Stockwell, on behalf of NACDE, wrote to members, with reference to the decision of the Court of Appeal in Society of Lloyds v Jaffray, as follows:
ACTION REQUIRED BY AUGUST 30TH TO PROTECT YOUR INTERESTS.
 This letter is notable for a number of features: (i) it suggests that the finding of the Court of Appeal gave rise to breaches by the government of both the ICA 1982 and the Insurance Directive; (ii) the finding is said indirectly to be indicating a breach of the Insurance Directive; (iii) launching proceedings could prejudice the Commissions investigation of infringement; (iv) the operation of a time bar for damage accrued more than six years earlier was the subject of a warning from leading counsel; (v) it seems that the grant of rights issue had been seen by NACDE to be a problem but the (then) recent case of Courage Ltd v Crehan Case C-453/99  All ER (EC) 886,  ECR I-6297 was seen as a possible way round the problem; (vi) the urgency was based on the hope that limitation would run from crystallisation of losses in R&R; (vii) NACDE had believed for some time that Community law had been infringed and that the government was responsible. That belief is not said to have derived from anything the Court of Appeal said; the inference (and the fact) is, I think, to the contrary (see , above). The judgment of the Court of Appeal itself had been handed down less than four weeks prior to the letter.
 No reliance, in the event, has been placed on Courage Ltd v Crehan.
 The claim form was issued on 2 September 2002.
 In an attempt to illustrate the importance to the present claim of facts said to have been obtained only in the course of disclosure or evidence given in Society of Lloyds v Jaffray, Mr Plender in his closing speech provided orally a list of those paragraphs in the particulars of claim which were said to have been dependent on information so derived. Mr Friedman provided a written note dated 29 September commenting on Mr Plenders submission.
 There can be no doubt that the conclusion expressed by the Court of Appeal is relied upon in the particulars of claim, but I think Mr Friedman is right in his submission, supported by the analysis in the note, that very few, if any, of such facts as are relied upon to justify the conclusion were, or can sensibly be said to have been, only revealed in Society of Lloyds v Jaffray. I do not think it necessary to repeat the analysis. I have, as requested, done my best to check it and I agree with it.
Grant of rights
The claimants submissions
 The grant of rights issue, as I have said, raises substantially issues of law. The key question is whether or not the Insurance Directive was intended to grant rights to names (see , above).
 The Insurance Directive, its sources, recitals and articles and some comments upon them have been set out at -, above.
 The names submit that the directive grants rights to them in two capacities, both as insurers and insureds. As insurers, it is submitted, in my words, that they have the right to a properly regulated insurance market in which they and all syndicates and insurers are correctly regulated so as to ensure an orderly and viable market. As insureds, it is submitted, that they have rights as beneficiaries of RITC, and inter-syndicate reinsurances, and insureds under personal stop loss policies and estate protection policies held by some names.
 The specific rights contended for were (or include) those set out in para 54 of Mr Plenders and Mr Nardells written closing submissions. They are simply statements of some of the provisions of arts 6 to 22 of the Insurance Directive expressed as rights: They are:
(i) the right to require the Defendant to ensure that the prior official authorisation required for the taking up of the business of direct insurance shall be sought from the competent authorities of the Member State;
 However much Mr Plender sought to question it, to my mind, in agreement with Mr Friedmans submissions, this description of the rights said to be granted by the directive comes to no more than claiming a right to implementation of the Insurance Directive. But that is not what Francovich/Factortame liability is about. Those decisions assume that the directive should have been but has not been transposed into national law and require an affirmative answer to the further question, is it possible to identify a right which should necessarily have been granted to the claimant to achieve the results required by the directive.
 If it were otherwise, there would be liability in damages for any failure to implement a directive which could be shown to have caused sufficiently serious loss to a claimant who would have benefited from its implementation. But that, as Mr Plender acknowledges, is not the law. If it were, there is no reason in this case why rights were not also granted to, say, creditors and employees of syndicates, as well as to names. Nor is it appropriate, as some of the claimants submissions sought to do, to draw analogies with administrative law. Standing to complain of a failure to implement a directive does not concern the test for a grant of rights. They are different concepts. As Mr Friedman submitted, the Community, acting through the Commission, has a right to require transposition. Individuals do not.
 Nor do I think it sustainable, simply on an appreciation of the terms of the Insurance Directive, to contend that it was intended to bestow, let alone necessarily did bestow, rights upon the names as reinsureds or the beneficiaries of policies designed to limit their exposures as insurers. The directive assumes regulation is in place and assumes its purpose is indeed to protect insureds and third parties (in the sense I have indicated: see , above). But, whether or not any rights are necessarily granted to insureds (and, as will be seen, I think not) and whatever the technicalities of the meaning of reinsurance, I think it fanciful to suggest that rights are necessarily granted by the directive to insurers who seek cover for their exposures as such, nor is that the basis of the claims which are for losses resulting from the claimants own underwriting.
 It would also, to my mind, be a surprising conclusion that a directive granted the same rights to insurers and insureds to have insurers regulated. As the claimants submissions were developed they were revealed to be a claim to a right to be regulated or to equality of regulation. The loss claimed arose from losses in the syndicates of which the names were members. In my judgment regulation of others is of no relevance (nor indeed is there any suggestion that some syndicates or names were regulated differently from others) and, as I have already said, the notion of a grant of a right to be regulated is, as Mr Plender acknowledged, an abuse of language or nonsensical. The purpose of regulation is not to protect the regulated but those to whom they supply their services or products. It is, of course, conceivable that different rights might be granted to insurers (say, to establish) and to insureds (say, to compensation for failure of an insurer), but that is of no relevance in this case.
 I have been referred to a mass of authority. It is agreed that the answer to the question whether there is a grant of rights is to be determined having regard to the wording of the relevant provisions of the directive in their context, and having regard to their nature and purpose. The purpose of the Insurance Directive, is not, as I have said (at ), hard to divine. It was to facilitate the development of an open market in the provision of direct insurance and, in that context, to harmonise (so far as then achievable) existing national supervisory provisions. That purpose, or those purposes, have nothing to do with the complaint the names seek to pursue in these proceedings. It was in that context that it was necessary that regulation should not prevent, save to the extent permitted by the directive, the establishment of an insurer in a member state.
 Despite the extensive citation of authority, there are two leading decisions, one national and the other Community, which I think provide conclusive support for the general comments I have made and so for Mr Friedmans submissions. They are the decisions of the House of Lords in Three Rivers DC v Bank of England (No 3)  3 All ER 1,  2 AC 1 and of the ECJ in Paul v Germany Case C-222/02  ECR I-9425. Both decisions concern regulation of banking or credit institutions. They are therefore in the same general area with which this case is concerned, and they raised similar issues in the sense that in question were the rights (if any) of depositors for whose benefit regulatory regimes existed. There is an obvious analogy between depositors and insureds.
 In the Three Rivers DC case the plaintiffs were depositors in BCCI, a licensed deposit-taker which collapsed with a massive deficiency. The relevant issue was whether or not the plaintiffs were entitled to recover damages from the Bank of England, in respect of its supervision of BCCI, as the beneficiaries of rights granted to them under the First Council Banking Coordination Directive (Council Directive (EEC) 77/780 (on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions) (OJ 1977 L322 p 30)). The Banking Coordination Directive was also founded on the right of establishment in art 57 of the Treaty.
 The headnote (omitting a passage of no relevance) records the unanimous decision of the House on this issue in these terms ( 2 AC 1):
Dismissing the appeal in so far as it related to European Community law, that whether the Directive of 1977 gave rights to individual depositors and potential depositors had to be determined by examining the terms of the Directive itself; that the recitals showed that it was intended to be the first step in a continuing process to co-ordinate the supervision of credit institutions; that the protection of savings was merely a matter to which regard had to be had, along with the creation of equal conditions of competition, in the process of co-ordination that, although articles 6 and 7 were concerned with supervision, their purpose was to ensure co-ordination between the supervisory authorities of the member states and the only duty which they imposed was a duty to co-operate; that article 8(1) allowed the withdrawal of authorisation in limited circumstances but its terms were restrictive rather than obligatory; that, read as a whole, the Directive placed duties of co-operation on the supervisory authorities of member states but stopped short of prescribing any duties of supervision; that, consequently, it was not possible to discover provisions entailing the granting of rights to individuals as such rights were not necessary to achieve the results which were intended to be achieved by the Directive; and that, accordingly, the interpretation of the Directive was acte clair and it would not be appropriate to make a reference to the European Court of Justice
 It is, of course, true that the decision is specific to the Banking Coordination Directive. It is also true that the Insurance Directive is more prescriptive of the supervision for which it provides. But the House was addressing what might be thought to be the constituency most likely to be granted rights (depositors not banks) and yet concluded that it was clear that no such rights were granted.
 Lord Hope of Craighead and Lord Millett addressed the issue in their speeches. Lord Steyn and Lord Hobhouse of Woodborough agreed with Lord Hope. Lord Hutton agreed with both Lord Hope and Lord Millett.
 Lord Hope said ( 3 All ER 1 at 20-21,  2 AC 1 at 206), with reference to the plaintiffs submissions about the purpose of the Banking Coordination Directive, derived from its terms and the travaux prparatoires:
The plaintiffs say, under reference to these and other passages in the opinion, that the committee recognised that the main purpose of legislation concerning banking regulation was to provide security for depositors and to protect savings. I am willing to accept that this is so. No doubt the committee recognised that the protection of savings is a necessary part of every system at national level for the regulation of credit institutions whose business it is to receive from the public deposits and other forms of repayable funds. But the point to which it was drawing attention in its opinion was the need for the harmonisation of authorisation requirements, without which there would be likely to be serious disparities between the member states. The Community law purpose which was indicated in its observations was that of the harmonisation of regulatory measures affecting the right of establishment with a view to eliminating these disparities. I do not find any indication here that the committee saw the purpose of the directive as being to confer Community law rights on individual depositors.
The purpose of Directive 77/780 was to begin the process of harmonisation of national laws so as to remove barriers to the provision of banking services throughout the single market, but without weakening or impairing the protection of depositors. The protection of depositors was seen therefore not as a purpose of Directive 77/780 but as a constraint on the provision of banking services to the public which had to be recognised.
 When he turned to the specific articles of the Banking Coordination Directive on which the plaintiffs relied, Lord Hope addressed (and distinguished) many if not most of the authorities on which Mr Plender relied in his submissions in this case. Lord Hope stressed that the Banking Coordination Directive, as, I think, the Insurance Directive, assumed that national authorities would be supervising banks (and insurers) and that the absence of any prescribed form of supervision or definition of those to whom rights were said to be granted were further indications that no rights were granted. This is, again, in point. The names contend that they are, in certain respects, insureds, entitled to whatever rights the Insurance Directive grants to insureds. That, I feel sure, would come as something of a surprise to the authors of the directive when they had in mind the protection of insureds.
 Lord Hope expressed his conclusion as follows ( 3 All ER 1 at 31-32,  2 AC 1 at 218):
Looking back at Directive 77/780 as a whole, the key to a proper understanding of its purpose and effect seems to me to lie in the fact that it was the first step in a process of harmonisation of provisions for the regulation of credit institutions carrying on business within the Community. It was about the removal of barriers to the right of establishment under art 52 of the EEC Treaty (now art 43 EC). It confined itself to imposing a number of minimum conditions and prohibitions on member states as to the authorisation and supervision of credit institutions having their head offices in another member state or having their head offices outside the Community. It was based upon an appreciation of the fact that credit institutions require regulation in order to protect savings. So any measures of harmonisation had to meet the twin requirements of protecting savings on the one hand and creating conditions of equal competition between credit institutions operating in more than one member state on the other. It placed duties of co-operation on the competent authorities where a credit institution was operating in one or more member state other than that in which its head office was situated. But it stopped short of prescribing any duties of supervision to be performed by the competent authority within each member state. It is not possible to discover provisions which entail the granting of rights to individuals, as the granting of rights to individuals was not necessary to achieve the results which were intended to be achieved by Directive 77/780.
 Whilst Lord Millett stressed the need to examine the particular provisions of the directive said to have been breached in order to discern the interest it intended to protect, otherwise I do not think anything he said detracts from the passages I have quoted from Lord Hope. Indeed Lord Millett referred to the inherently anti-competitive nature of the regulations protecting depositors and hence the desire to co-ordinate them in a single market.
 Even granted the differences between the banking and insurance directives, Lord Hopes conclusion could almost have been written for this case. Apart from granting a right of establishment to banks, which would derive support from other passages in Lord Hopes speech, but was of no relevance in the Three Rivers DC case and is of no relevance in this case, the want of rights in depositors, and by analogy insureds, would in my judgment make the claimants submissions in this case that rights of the nature for which they contend were granted to them, unsustainable.
 Paul v Germany  ECR I-9425 also concerned the First Banking Coordination Directive and a number of subsequent directives, including Council Directive (EC) 94/19 (on deposit guarantee schemes) (OJ 1994 L135 p 5), which had made banking supervision more prescriptive. Directive 94/19 introduced a deposit guarantee scheme, which required (subject to certain exceptions) that deposits must be covered up to a minimum of ECU 20,000 in the event of deposits being unavailable. The minimum guarantee applied regardless of any supervisory failure. The claimants were depositors with a German bank which was not a member of any guarantee scheme. The bank failed. The claimants claimed damages from Germany on the grounds that it had failed to transpose Directive 94/19 into national law and that the regulatory authority had failed to discharge its prudential supervision obligations properly alleging that if it had done so the bank would have collapsed before they had made their deposits.
 The objective of the claimants was to recover more than ECU 20,000. They contended (the second question) that the rules on supervision in the banking directives outlawed a national rule precluding claims for damages for defective supervision and (the third question) that there was state liability in damages for defective supervision.
 In the course of the judgment on the second question, and in its judgment on the third question, the court said ( ECR I-9425 (paras 38-51)):
38. In a number of the recitals in the preambles to the directives referred to in the second question it is stated in a general manner that one of the objectives of the planned harmonisation is to protect depositors.
 I do not read this judgment as one dependent on the guaranteed sum being payable. I think the decision is founded on the lack of any express provision granting rights to depositors and the conclusion that a grant of rights to depositors is not necessary for the achievement of the harmonisation which was the objective of the banking directives. Again, I think, those considerations are of equal (indeed greater) application to this case and lead to the same conclusion that there is no grant of rights to names on whatever basis they seek to claim it. If those who are intended to benefit from supervision are not granted rights in respect of the solvency of the institutions supervised, it would be anomalous if those institutions which are the subjects of supervision were granted such rights.
 Turning to the list of principal issues (App 4), as it applies to this issue, I answer question 1.1: No: the result prescribed by the Insurance Directive does not entail the grant of rights to persons in the position of the claimants. That is sufficient to dispose of the issue, and indeed, of the claim. Whilst para 3 of the list of issues has, to an extent, helped to focus the submissions and debate, I do not find it necessary or helpful to address it in any detail. Question 1.2 (the content of rights granted to the claimants) is not capable of a sensible separate answer in view of my answer to question 1.1. I also do not think it appropriate to address the question whether or not the directive grants rights of establishment to those seeking to carry on the business of direct insurance. That has not been in issue. The claims do not arise from any infringement of a right of freedom of establishment but from losses incurred by the claimants as insurers.
 I have commented on the meaning of third parties at para  of this judgment. A case based on Courage Ltd v Crehan has not been advanced.
The limitation issue
 In the light of my conclusion on the grant of rights issue it is, perhaps, particularly unfortunate that the limitation issue has been part of the trial. But it has, and the parties are agreed, as I am, that it should be addressed. I also agree that the issue has to be addressed on the basis that, contrary to my decision, implementation of the Insurance Directive could have granted rights to the claimants of the nature for which they contend. The only caveat I would enter is that this is not a case in which the government can be or is accused of want of good faith or acting unreasonably in asserting, so far as it did, that it had no liability for the losses suffered by the claimants or names generally.
 The list of principal issues (paragraph ) raises a question as to where the burden of proof lies on this issue. I do not, however, think anything turns on the answer to the question. The answer is, I think, to be found in the speeches of Lord Nicholls of Birkenhead and Lord Mance in Haward v Fawcetts (a firm)  UKHL 9 at - and ,  3 All ER 497 at - and ,  1 WLR 682. It is for the defendant to establish that, but for the application of an extended limitation period, such as s 14A of the 1980 Act, the claims are statute-barred. It is for the claimants to establish that they are entitled to the extended period upon which they rely.
 The starting point in addressing the limitation issue is the claimants primary case that, applying the decision of the ECJ in Emmott v Minister for Social Welfare  IRLR 387,  ECR I-4269, ECJ Community law precludes the competent authorities of a member state from relying on national rules of limitation to defeat a claim in respect of rights granted by a directive until such time as the directive has been properly transposed into national law. In other words, time can only begin to run following implementation of a directive: see  IRLR 387 at 390,  ECR I-4269 (para 23).
 The rationale for this decision appears as follows ( IRLR 387 at 390,  ECR I-4269 (paras 21 and 22)):
21. So long as a Directive has not been properly transposed into national law, individuals are unable to ascertain the full extent of their rights. That state of uncertainty for individuals subsists even after the Court has delivered a judgment finding that the Member State in question has not fulfilled its obligations under the Directive and even if the Court has held that a particular provision or provisions of the Directive are sufficiently precise and unconditional to be relied upon before a national court.
 There are, as has been well recognised in subsequent decisions, obvious difficulties with the application of this principle or at least with what may, perhaps, be called unqualified Emmott. Why should it apply to a claimant who knows of the failure to implement? Or one who ought to know? Can the potential claimant wait for ever if the directive is not implemented? What if it is a difficult question whether or not a directive has been properly implemented? In this case, the claimants do not accept that the 2000 Act properly implemented the Insurance Directive. If they are right and unqualified Emmott is good law, time has not even now begun to run for the present claim.
 The claim in Emmotts case was based on the direct effect of a directive which required the progressive implementation of the principle of equal treatment for men and women in matters of social security. The provisions of the directive should have been transposed in Ireland by 23 December 1984 but were not in fact transposed until various dates in 1986. Mrs Emmott only received her full entitlement to benefit from November 1986. Her solicitors pursued a claim in correspondence in the spring of 1986. The Irish governments response on 26 July was that since the directive was still the subject of litigation in the High Court, no decision could be taken in relation to her claim which would be examined as soon as that Court has given judgment.
 Mrs Emmott obtained leave for judicial review in July 1988 seeking, in effect, the benefit of the directive from December 1984 when it should have been transposed. The respondents relied on a rule that applications for judicial review had to be brought promptly and in any event within a three or six-month period according to the nature of the relief claimed. It was this rule which the ECJ held could not be relied upon by the Irish government.
 In Steenhorst-Neerings v Bestuur van de Bedrijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen Case C-338/91  IRLR 244,  ECR I-5475 the claim concerned benefits for incapacity at work. The relevant directive was transposed late. Domestic law precluded a claim for benefit earlier than one year preceding the date of the claim. The ECJ upheld this time bar. It did so on the basis ( IRLR 244 at 247,  ECR I-5475 (para 23)) that the aim of the rule restricting retroactive claims for benefit was quite different from a rule imposing mandatory time limits for bringing proceedings.
 In Johnson v Chief Adjudication Officer (No 2) Case C-410/92  All ER (EC) 258,  ECR I-5483 the ECJ followed Steenhorst-Neerings in a case raising the same issue. The court said ( All ER (EC) 258 at 274,  ECR I-5483 at (para 26)) the-
solution adopted in Emmotts case was justified by the particular circumstances of that case, in which a time bar had the result of depriving the applicant of any opportunity whatever to rely on her right to equal treatment under the directive.
 In Denkavit Internationaal BV v Kamer van Koophandel en Fabrieken voor Midden-Gelderland Case C-2/94  ECR I-2827 at (para 74) Advocate General Jacobs considered Emmott v Minister for Social Welfare should be confined to cases in which not only was there a failure to implement a directive but the member state was also in default in obstructing the exercise of a remedy based on the directive or where in some other way the failure by the claimant to meet the time limit was due to the conduct of the national authorities. The opinion concluded (at para 76) that in the interests of legal certainty the obligation to set aside time limits should be confined to wholly exceptional circumstances such as those in Emmott. The court itself did not address the issue. As I have recorded, in Emmotts case, the Irish authorities had said that the claim would be examined once the litigation in the High Court had concluded. Yet they had then claimed Mrs Emmott was out of time when she came to pursue her claim after waiting for that conclusion.
 In Preston v Wolverhampton Healthcare NHS Trust, Preston v Secretary of State for Health, Fletcher v Midland Bank plc  IRLR 233,  ICR 899 the Court of Appeal considered Emmotts case. Schiemann LJ said ( IRLR 233 at 239,  ICR 899 at 915) that while Emmotts case had not been overruled by the ECJ it had been consistently confined to its facts. Schiemann LJ also indorsed the opinion of Advocate General Jacobs in the Denkavit Internationaal BV case describing it as authoritative and correct.
 In Fantask A/S v Industriministeriet (Erhvervsministeriet) Case C-188/95  All ER (EC) 1,  ECR I-6783 the ECJ held that a time limit could begin to run before the directive in issue had been properly implemented. The opinion of Advocate General Jacobs again sought to confine Emmotts case to its particular facts. He questioned ( All ER (EC) 1 at 18-19,  ECR I-6783 (para 65)) the references in Emmotts case to an individual not having notice of a directive or being unaware of his rights merely because the directive had not been transposed into national law. He distinguished ( All ER (EC) 1 at 22-23,  ECR I-6783 (para 82)) cases (such as Emmott v Minister for Social Welfare) involving claims to recover tax overpaid or benefits denied, in which delay did not aggravate the loss, from cases involving claims for damages based on the Factortame principle concluding (in para 83) that:
The existence of a wholly independent claim for damages, subject to longer time limits than the comparatively short ones prescribed for restitutionary and entitlement claims in many member states, is consistent with the different nature of the claim. Its basis is not merely the unjust enrichment of the state resulting from simple error in the routine application of technical legislation but a serious violation of individual rights, calling for a re-appraisal of the balance between such rights and the collective interest in a measure of legal certainty for the state.
 Thus the existence of Factortame claims, with longer time limits, itself made it unnecessary to set aside national time limits for Emmott-type claims.
 The judgment of the court on the issue, so far as material, reads ( All ER (EC) 1 at 34-35,  ECR I-6783:
46. The Danish, French and UK governments consider that a member state is entitled to rely on a limitation period under national law such as the period at issue, since it complies with the two conditions, of equivalence and of effectiveness, laid down by the courts case law In their view, the judgment in Emmott must be confined to the quite particular circumstances of that case, as the court has, moreover, confirmed in its subsequent case law.
 Finally, Emmotts case was recently considered by the Court of Appeal in Walker-Fox v Secretary of State for Work and Pensions  EWCA Civ 1441,  EuLR 601. The claimant claimed winter fuel payments. In respect of two years the claims were out of time under the applicable United Kingdom regulations. But the claim was also based on an EEC regulation. The claimant did not appear nor was he represented but the court acknowledged that counsel for the Secretary of State had genuinely tried to argue both sides of the case.
 In the course of his judgment, with which the other members of the court agreed, Ward LJ said:
20. Shorn of detail the legal question is whether principles of law enunciated by the Court of Justice in Emmott v Minister of Social Welfare retain their authority or whether they have been gradually so whittled away that the case is now to be seen as based narrowly upon its own facts
 It would, I think, be difficult to find a case which, whilst never being overruled, has been more emasculated by subsequent decisions than Emmotts case. Unqualified Emmott is, beyond doubt, now of no authority. National limitation periods can and do bite before a directive is implemented in respect of claims for non-transposition. The claimants in this case cannot therefore succeed in their primary submission on the limitation issue.
Conduct of the government
 The extent to which Emmotts case survives as authority beyond its particular facts may be debatable, but at best for the claimants it could do so only in circumstances in which it could be said that the conduct of the member state was responsible for the lapse of time which brought the relevant time bar into operation such as to make it inequitable for the state then to rely upon it. Although Mr Plender submitted that the evidence in this case justified such a conclusion, in my judgment it does not come near to doing so. I have referred to the letter from Mr Brebner to Mr Bingham at -, above. Mr Plender and Mr Nardell attached as Annex A to their closing submission a summary of documents which they put forward as representing the stance of the DTI from 1973 to 1991 and from 1992 to 2001. I was also supplied with other summaries and files of documents on the same topic. I can find nothing in any of this material, seen in context, for which I would criticise the DTI. It is all consistent with the conclusion I expressed in respect of the Brebner/Bingham letter. It is also entirely consistent with the judgment of Ward LJ in Walker-Foxs case  EuLR 601 at  in the sense that the DTI was putting forward a genuine view both of its role and that it had discharged it. Nor, unlike the position in Walker-Foxs case, has the DTI resiled from that view. There was no active misleading nor lulling into a false sense of security of anyone. Indeed, it is in general not the names case that they did not bring this claim earlier because of anything the government said or did beyond the undoubted fact that the government maintained that it had no responsibility for and was not liable for the losses the names had suffered. As Mr Freeman acknowledged the government had not disclaimed responsibility for solvency but asserted it had fulfilled it. I could accept that it might seem a daunting task to challenge the government (even for claimants who were quite ready to take on agents, auditors and Lloyds itself, all of whom denied liability) but I cannot accept that the government bears any relevant responsibility for any delay in bringing this claim. Nothing was said to encourage postponement of a claim. Discouraging the making of a claim is nowhere near sufficient. I, therefore, also reject the submission that the defendant is disenabled by its conduct from relying on a time bar to defeat the claim.
 The claimants submitted that s 14A(1) of the 1980 Act (see , above) applied directly to their claims so as to disapply s 2 of the Act. The submission is that the Francovich/Factortame cause of action involves fault on the part of the member state and so should be treated as an action for damages for negligence.
 In my judgment, this is a hopeless submission. The cause of action does not require negligence to be alleged or proved. Fault might be relevant to the question whether or not a failure to transpose was sufficiently serious to found the cause of action but it is not itself an element of the cause of action nor is recovery conditional upon fault (intentional or negligent) on the part of the organ of the state responsible for the breach, going beyond that of a sufficiently serious breach of Community law: see Ex p Factortame Ltd  All ER (EC) 301 at 361-362,  ECR I-1029 (paras 76-81).
 Section 11 of the 1980 Act (personal injury claims) applies to any action for damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under a statute The contrast is plain. Where the 1980 Act refers to negligence and statutory duty it is drafted expressly to do so: see Socit Commerciale de Rassurance v ERAS (International) Ltd, Re ERAS EIL appeals  2 All ER 82n. Where it refers to tort (s 2) of course the reference is to both (and more). The claim is a claim in tort; it is not an action for damages for negligence. The extent to which this construction of the 1980 Act may be affected by Community law is addressed below by reference to the Marleasing principle (see Marleasing SA v La Commercial Internacional de Alimentacion SA Case C-106/89  ECR I-4135).
 I think, logically, the next question which should be addressed is the application of national law to the limitation issue on the basis that Community law has no relevance to the question.
 Section 2 provides for a six-year limitation period from the date on which the cause of action accrued. Damage is an ingredient of the Francovich/Factortame cause of action. Time therefore does not start to run until damage has been suffered.
 A reading of para 8.3 of the list of principal issues (App 4) shows that the claimants put forward two main arguments of domestic law. First, in contrast to the defendants case, which is that damage is suffered when a claimant undertook a commitment to become or remain a name or to increase his underwriting limit which he would not have undertaken but for the breach, the claimants submit, first, that time only begins to run [when] substantial loss [is] first suffered and, second, that the breach by the defendant is a continuing breach so that subsequent loss gives rise to a new cause of action whenever it occurs. The question of a continuing cause of action is addressed later. In para 7.1.5 of the amended reply, the claimants put a bit more substance on their case as to when substantial loss was first suffered as follows:
So far as it is material to determine when, as a matter of domestic law, each Claimants cause of action first accrued, the Claimants contend that this occurred, at the earliest, when the Claimant first became liable to pay a contribution to syndicate underwriting liabilities, or received reduced profits by reason of syndicate underwriting liabilities, as a result of the Defendants failure to implement the Directive.
 I do not agree with this analysis. Without intending to express any disagreement with the judgment of Cooke J in Society of Lloyds v Laws  EWHC 873 (Comm) (which supports the defendants case) I would be content to approach the question on the basis that actionable damage first occurred when a claimant became a name, or did not leave, or increased limits, on a syndicate which was already or subsequently became exposed to the liabilities which caused the losses of which complaint is made. In my judgment that would be regardless of awareness of the exposure. Damage would have been suffered upon the commitment (or increased commitment) to meet the liabilities on the relevant year of account. The immediate consequences of becoming a name and risks of open syndicates are set out in the ASF, paras 2.2.27 to 2.2.30. The exposures from RITC can be seen from paras 2.4.7 to 2.4.9 of the ASF.
 It is, however, the claimants submission that the recent decision of the House of Lords in Law Society v Sephton & Co  UKHL 22,  3 All ER 401,  2 WLR 1091 supports their analysis.
 Law Society v Sephton & Co was a claim in negligence against accountants. The negligence was alleged to have exposed the compensation fund of the Law Society to claims on the fund which would not, however, necessarily be made. The House decided that time did not run unless and until a claim was actually made. The risk or likelihood of a claim was not sufficient. To quote the headnote ( 2 WLR 1091):
a contingent liability, such as the possibility of an obligation to pay money in the future, was not in itself damage until the contingency occurred; that, consequently, until a claim was actually made, no loss or damage had been sustained
The liability was contingent because the misappropriations by the solicitor which gave rise to the risk of liability might have been made good and a claim on the fund had to be made in proper form.
 But, in this case, I do not think the court is addressing a loss which is only prospective and might never be incurred. By becoming a name (and joining a syndicate or syndicates) a name was committed to the liabilities of that syndicate under RITC it had written and on all business (including RITC) it did write in the course of his membership. Quite apart from joining fees and the provision of charges and guarantees (ASF, para 2.2.27) there were therefore actual liabilities undertaken albeit unquantified. This was not a contingency standing alone in the sense with which, as I understand their speeches, their Lordships were concerned in Law Society v Sephton & Co: see in particular, Lord Hoffmann ( 3 All ER 401 at ). The names were worse off than if they had not become or continued to be names. That is precisely their case, albeit, and quite understandably, they were shocked to discover just how much worse off they were when the claims did start to come in, or became manifest, as they did, from at the latest 1991 onwards.
 Inevitably, this conclusion personalises the start of the running of time. But it does not matter; the losses which are the subject of this claim were, with one possible exception, all incurred on claims on the 1992 or earlier years of account (see the RRAPC, paras 2.4, 2.5 and 99-104). The names who have suffered such losses must all, therefore, have been committed to them prior to 1993. Moreover, on the evidence, all of the sample names had suffered actionable damage within any definition many more than six years before this claim was issued on 2 September 2002. In all probability, that is also true for all the claimants. On that basis, the issue is academic, save insofar as it may impact on other issues.
 It is not the defendants case that the (assumed) failure to transpose the Insurance Directive was a once-and-for-all breach committed on the last day (27 July 1976) by which the directive should have been transposed and entered into force in the United Kingdom. It is accepted that there was a breach on that day and every day thereafter that the directive was not properly transposed (see Phonographic Performances Ltd v Department of Trade and Industry  EWHC 1795 (Ch),  1 All ER 369,  1 WLR 2893). In that case, as in the case of Hartmann v EU Council Case T-20/94  ECR II-595, the particular loss claimed arose on each performance or each day for so long as the defendant was in breach and so could properly be said to have been caused by the continuing breach committed the day before each loss.
 It is, however, necessary again to refer to the nature of the present claims. They, like R&R, relate to losses on syndicates on 1992 and earlier years of account. The nature of the claim and its limitation to 1992 and earlier years of account appears plainly from para 2 of the RRAPC (see , above). The latest date on which a name could have been committed to contribute to those losses must therefore ante-date 1993. The breach or breaches by the defendant which are said to have caused those losses must also therefore have been committed prior to 1993. No breach committed thereafter could be material to the cause of action advanced. Any further calls on the names made in and after 1993 increase the amount of the claim in respect of the previous breaches. It is, of course, well-established law that a cause of action having damage as a constituent may arise long before it is possible to quantify the damages recoverable. I can see no answer to this submission made by the defendant. Mr Plender did seek to suggest that payments to Equitas were sufficient to provide a new cause of action or that should there be proportionate insolvency of Equitas (the ASF, para 7.2.1) that would do so. But the payments made to Equitas and to be made in the event of proportionate insolvency were and would themselves be referable to the losses in the years prior to 1993 to which alone R&R related: see the ASF at para 7.1.5. to 7.1.7 and para 2.4.3 of the RRAPC. Recent public statements also suggest that the risk of proportionate insolvency is now likely to be removed.
 The one exception in the pleaded claims which the defendant accepts might involve a loss first arising after 1992 is the claim in para 99.2 that damage was suffered by way of trading losses not included in the Equitas premium. That claim remains wholly unspecified and unsupported by evidence. It is also said by the claimants that other losses are claimed after 1992 in the RRAPC. There were some dark mutterings about this in the claimants response and closing submissions. I propose to say no more about them. They should be addressed if and when they are pursued further.
 In my judgment, therefore, the application of s 2 of the 1980 Act would result in the claims of each of the sample names being statute-barred and so failing. The same applies to all the claimants. Although Mr Plender has rightly cautioned against assuming that all claimants are in the same or no better position than the sample names, on this question the reasoning which leads me to the judgment I have expressed is applicable to all.
 It is the claimants submission that if, as I have otherwise held, English law provides without qualification for Francovich/Factortame claims to be time-barred six years after a claimant has suffered damage as a result of a failure to transpose the directive in question then the Community law principles of effectiveness and equivalence require amelioration of English law. Three routes to that end are put forward by the claimants. The first two involve the application of s 14A, either by way of the principle to be derived from the Marleasing case  ECR I-4135, or simply by analogy. The third is that losses suffered within the six-year period before proceedings were commenced should be recoverable even if earlier losses are not.
 The first question is, therefore, whether the application of s 2 of the 1980 Act to claims for failure to transpose a directive is an infringement of either of the principles of effectiveness or equivalence. Those principles require (see Fantask A/S v Industriministeriet (Erhvervsministeriet) at , above) that the substantive and procedural conditions imposed by domestic law must not be less favourable than those relating to similar domestic claims (equivalence) and must not operate so as to make it virtually impossible or excessively difficult to obtain reparation (effectiveness). Subject to these principles, it is for each member state to determine what conditions, including limitation periods, are appropriate to be imposed. Such periods do not themselves offend either principle, founded as they are on application of the fundamental principle of legal certainty: see Palmisani v Istituto Nazionale della Previdenza Sociale (INPS) Case C-261/95  ECR I-4025 (para 28).
 The claimants submit that English law does not provide an effective remedy because time can begin to run and expire before a claimant has knowledge he has suffered a loss or of a causal link between that loss and the failure of which he complains. That is true, but it is true of many, if not most, limitation periods. As Lord Scott of Foscote said in Hawards case  3 All ER 497 at , such periods must seek to strike a balance between the interests of claimants in seeking to pursue what may be meritorious claims and the interests of defendants in certainty. Section 14A is itself an example of the application of that balance in cases of the kind with which its provisions are concerned.
 I cannot see any principled ground of objection to the strict application of s 2 of the 1980 Act in the manner in which I have held it does apply. Time does not begin to run until damage has been suffered by the potential claimant. It is improbable that a claimant will be unaware of such damage before six years expires. In the case of failure to transpose a directive the breach is continuous; if, therefore, there is damage which is truly caused by such a failure at any time before proper transposition it is recoverable. The period of six years is substantial, longer indeed than the period which applies to claims for non-contractual liability against the Community: see art 46 of the Statute of the Court of Justice, which itself only runs from damage (Hartmanns case  ECR II-595). The question is not whether in a particular case the application of the period may work injustice but whether generally it causes injustice by making it virtually impossible or excessively difficult to obtain reparation. I do not think that test is met on the evidence relating to the claimants in this case.
 I have held that the true analogy in domestic law to Francovich/Factortame claims is a claim for breach of statutory duty not claims for damages for negligence. It follows that the principle of equivalence is not infringed: domestic and relevant Community law are subject to the application of the same time period without discrimination.
 The principle was stated in the Marleasing case  ECR I-4135 (para 8). It is that, because of the obligation upon member states to achieve the result envisaged by a directive and to take all appropriate measures to do so,
in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter
 The claimants submission is that s 14A of the 1980 Act is to be construed so as to extend to Francovich/Factortame claims because it is necessary to do so to achieve the purpose of the Insurance Directive. It follows from what I have already said that I think this, too, is a hopeless submission. So to construe s 14A does, I think, involve considerable violation to the language of the section read in context of the 1980 Act in which it appears (see -) but even if that is permissible (as it may be) I can see nothing in the directive or the other principles of Community law which require the court to perform such an exercise.
Conclusion so far
 It follows from what I have so far said that in my judgment the present claims are statute-barred and must also fail for that reason. Section 2 of the 1980 Act applies and none of the ways in which the claimants have sought to evade its application are effective to do so. Again, however, I have been encouraged to address the issues which would arise if s 14A were to apply to the claims. I will do so, albeit as succinctly as I can in the hope of not adding too much more to what is already a judgment of unacceptable length. It is, of course, to this issue that the facts I have set out are material. The defendant accepts (in agreement with the claimants) that if, by any of the ways put forward by the claimants, s 2 of the 1980 Act was inapplicable, then s 14A (applied with suitable adjustments) provides the appropriate analogy.
 Section 14A is quoted at , above and the most material provisions are repeated below. The alternative limitation period for which it provides in sub-ss 4(b) and (5) is three years from the earliest date on which the [claimants] first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action.
 The material provisions are sub-ss (6)-(10) which provide:
(6) In subsection (5) above &the knowledge required for bringing an action for damages in respect of the relevant damage means knowledge both-(a) of the material facts about the damage in respect of which damages are claimed; and (b) of other facts relevant to the current action mentioned in subsection (8) below.
 These subsections draw a contrast between facts and law. That may reflect the maxim that a person is deemed to know the law. Thus the reference to expert advice in sub-s (10) is advice on facts not law. But the contrast is not easily drawn. Subsection (8) requires knowledge that the damage was attributable to the act alleged to constitute negligence and that it was an act of the defendant, but sub-s (9) excludes knowledge that the act did as a matter of law, involve negligence. The contrast is yet more difficult, I think, when seeking to apply s 14A to the Francovich/Factortame cause of action. What are the acts or omissions of the member state which constitute the cause of action and what is excluded as a matter of law? And in any event to what extent, if at all, is a potential claimant to be deemed to know of (in this case) the Insurance Directive and the (assumed) failure properly to transpose it into the ICA 1982? I find these difficult questions to which there are, and such authority as there is provides, no easy answers.
 The leading authority on s 14A is Haward v Fawcetts (a firm)  3 All ER 497,  1 WLR 682, which followed and applied the decision of the Court of Appeal in Hallam-Eames v Merrett Syndicates Ltd (1995)  Lloyds Rep PN 178. The claim in Hawards case was by the purchasers of a company acting on the advice of the defendant accountant. The purchase was completed on 9 December 1994. The claim in Hawards case was brought on 6 December 2001. The claimants relied upon s 14A contending that the earliest date on which they had the relevant knowledge was May 1999. To quote the headnote ( 1 WLR 682):
knowledge for the purposes of Section 14A of the 1980 Act meant knowing with sufficient confidence to justify embarking on the preliminaries to the issue of a writ; that knowledge that the damage was attributable in whole or in part to the acts or omissions of the defendant alleged to constitute knowledge within Section 14A(8)(a) meant knowledge in broad terms of the facts on which the claimants complaint was based and of the defendants acts or omissions and knowing that there was a real possibility that those acts or omissions had been the cause of the damage; that the burden of proof had been on the claimants to show that the date when the first claimant had first known enough for it to be reasonable for him to investigate the possibility that the partners advice had been defective had been after 6 December 1998; that, whether or not the first claimant had before that date realised that the partner had not investigated matters sufficiently before giving his advice, he had known all the material facts as they had occurred and the causal connection between the partners advice and the damage had been patent and obvious; and that, accordingly, the claimants had failed to discharge the burden of proof.
 Lord Nicholls referred ( 3 All ER 497 at ) to some of the difficulties in s 14A to which I have referred but noted that they did not arise in Hawards case. So, too, did Lord Walker of Gestingthorpe (at  and ). Nonetheless, the practical approach to the overall question which the section poses is, I think, helpful. Lord Nicholls said (at ):
The relevant date was not when [the first claimant] Mr Haward first knew he might have a claim for damages. The relevant date was an earlier date, namely, when Mr Haward first knew enough to justify setting about investigating the possibility that [the defendants] advice was defective.
 Lord Scott (at ) described the requisite knowledge as knowledge of the facts constituting the essence of the complaint of negligence. So, too, did Lord Walker (at ), noting (at ), as did Lord Mance, an unusual feature of Hawards case that constructive knowledge was not there in issue. Lord Brown of Eaton-under-Heywood (at ) referred to knowledge of the substance of what ultimately came to be pleaded. Lord Mance (at ) commented on cases where the loss may be attributable to more than one cause that:
it must always be remembered that all that s 14A requires is knowledge that loss is capable of being attributed in whole or in part to the act or omission alleged to constitute a particular defendants negligence.
 What facts, then, are the essence of the present complaint, and when would a name have sufficient knowledge of those facts to justify setting about investigating the possibility that the government was responsible for the damage suffered?
 In seeking to answer the questions I have posed in the preceding paragraph I would first make some general points.
 First, the fact that knowledge of the facts on which the complaint is based is contrasted with knowledge that those facts amount or may amount in law to a cause of action was emphasised in Broadley v Guy Clapham & Co  4 All ER 439 and Dobbie v Medway Health Authority  4 All ER 450,  1 WLR 1234 in relation to the wording of s 14(1)(b) which mirrors the wording of s 14A(8)(a). The same contrast appears in Hallam-Eames v Merrett Syndicates Ltd  Lloyds Rep PN 178. To quote the headnote:
(3) A claimant did not have to know that he had a cause of action or that the defendants acts could be characterised in law as negligent or as falling short of some standard of professional or other behaviour, but he must have known the facts which could fairly be described as constituting the negligence of which he complained
 In my judgment, in this case, applying the analogy, the relevant facts for the purposes of s 14A(6), (7) and (8) are knowledge of the exposure to the losses and that the exposure was or might, wholly or in part, be capable of being attributed to the failure of the government to regulate or supervise Lloyds. That requires, as the defendant accepts, knowledge of the regulatory system in fact in place and that the government had a relevant role in it. But it does not require, or s 14A(9) applied by analogy does not require, knowledge that the regulatory failures of the government would or might give rise to a Francovich/Factortame claim for failing properly to transpose the Insurance Directive.
 Second, what is not required is knowledge of facts sufficient to bring a claim, although Mr Freeman, in his evidence, was keen to stress that there was insufficient basis for a claim to be properly pleaded prior to the judgment of the Court of Appeal in Society of Lloyds v Jaffray  All ER (D) 399 (Jul), and some of the claimants submissions focus on the time when a claim could first have been expected to be brought.
 Third, deemed knowledge of the law is, it seems, a principle of both Community and domestic law. But it is not, I think, clear how far it goes. I have referred (at , above) to the opinion of Advocate General Jacobs in Fantask A/S v Industriministeriet (Erhvervsministeriet)  All ER (EC) 1,  ECR I-6783 and the judgment of Ward LJ in Walker-Foxs case  EuLR 601 (at , above). The most recent discussion is to be found in the decision of the Court of Appeal in Its a Wrap (UK) Ltd v Gula  EWCA Civ 544,  All ER (D) 161 (May)  LS Gaz R 24. The issue was whether or not the statutory remedy against a shareholder, in s 277(1) of the Companies Act 1985, entitling the company to recover an unlawful distribution paid to a shareholder who knew or had reasonable grounds to believe that the payment was made in contravention of the Act, required knowledge or belief of only the relevant facts constituting the contravention or also the fact that the Act was contravened. Section 277(1) was designed to implement the Second EC Directive on Company Law (Council Directive (EEC) 77/91 (OJ 1977 L26 p 1)).
 The Court of Appeal held that the shareholder could not resist a claim because he did not know of the restrictions in the 1985 Act on making distributions.
 Arden LJ said (at ):
Directives also have to be interpreted in the light of the general principles of Community law: see Criminal proceedings against Kolpinghuis Nijmegen BV Case 80/86  ECR 3969. One of those principles is that a person is taken to know the content of Community law as soon as it is published in the Official Journal of the European Communities: see for example Friederich Binder GmbH & Co KG v Hauptzollamt Bad Reichenhall Case 161/88  ECR 2415 (para 19). Here the Community instrument was a directive and accordingly (art 16 not having created directly applicable rights) a person was not bound by art 16 until it was implemented in United Kingdom law. This has now happened by the enactment of primary legislation. Thereupon, the further presumption in English law that a person is presumed to know the law is brought into operation: for this presumption, see generally Halsburys Laws of England para 1324. Advocate General Darmon expressed the view at para 34 of his opinion in the Friederich Binder case  ECR 2415 that this presumption would arise in national proceedings in most member states. Accordingly, in my judgment the right approach to the interpretation of art 16 is to proceed on the basis that, when implemented, the general presumption that ignorance of the law is no defence will apply unless on a true interpretation of the directive it is excluded.
 Both Sedley and Chadwick LJJ also said that the shareholder must be taken to know the content of Community law.
 However, I do not find these statements conclusive or indeed easy to apply in the present context. In this case I am to assume that the Insurance Directive was not (unlike the Company Law Directive) transposed into English law. It was, of course, published in the Official Journal of the European Communities and Arden LJs words can be read as saying a citizen of the Community is therefore taken to know the content of the directive. That would, I think, include knowledge of any rights granted by the directive to individuals. But the words can, and indeed more naturally, I think, are to be read as requiring transposition of a directive before the English law presumption applies, and that, in such a case, it was the latter presumption which mattered. Of course a name is presumed to know the ICA 1982, but it does not necessarily follow that the name is also deemed to know that the ICA 1982 failed to grant him the rights to which he was entitled under the Insurance Directive and Community law. There is, as Ward LJ noted, a real artificiality about such presumptions perhaps all the greater in the present context. Nonetheless, if I had to decide the point, I would decide that the names are indeed presumed to know the law which in this case is said to give them a Francovich/Factortame cause of action. Were it not to be so, there would be the, to my mind, awkward dilemma, if I am right in my decision on grant of rights, and assuming, as I do, that the defendant has at least an arguable case on transposition, that the 1980 Act would require actual or constructive knowledge of something which proved to be wrong in law. There are, however, two other reasons which in my judgment make the point academic. First, as I have said (at -), the knowledge requirements of s 14A applied by analogy to such a claim involve sub-s (9) itself which I think makes irrelevant knowledge that the ICA 1982 failed to transpose the Insurance Directive such as to give rise to a Francovich/Factortame cause of action. The second reason is that on the facts it is my conclusion (as will be seen) that the names acting reasonably ought at least to have appreciated that such a cause of action was possible such as to lead to the step of seeking advice upon it.
 The next, and fourth, general point I would make is that it would be a serious concern if s 14A had the effect of making it easier for a claimant to rely upon an extended limitation period the more difficult or doubtful the potential claim was in law and, indeed, on the facts, with the consequence that the more hopeless a claim the longer the period in which to pursue it. The justification for certainty and the risks of injustice in trying stale claims may be all the greater in circumstances in which a defendant can say there was no reason even to anticipate a claim. That is why, consistent with its purpose (latent damage), I think the emphasis on s 14A is on knowledge of damage and the relevant expertise in sub-s (10) does not include legal expertise. It is the fact and knowledge of damage which is likely to and should trigger inquiry. In my judgment that supports the conclusions expressed in the previous paragraphs.
 The final general point I would make is specific to names in the circumstances in which they found themselves exposed to potentially massive and unheralded losses. Those circumstances were the subject of extensive public debate and media attention. They led to the formation of numerous action groups. Skilled legal advice was sought and available to those groups. There was extensive and expensive litigation. I have set out at inordinate length some, but even then only a fraction, of the history. Mr Plender has, as I have said, counselled against treating names as one. There may, of course, be some individual case which is truly to be distinguished, but it has not been identified and I think that any name who had suffered damage as the claimants define it (see ) must have been aware of it not long thereafter and was then in a position to seek advice and information either personally or, more realistically, through an action group, so as to explore what avenues of recovery might be available and that acting reasonably, the name should have done so. Indeed most names did just that. The action groups and individual names were in regular contact. Certainly, on the evidence of the sample names, I see no reason to distinguish between them. Many were deeply involved in pursuing claims. Those who were not were, and said in evidence that they were, content to rely on the action groups to consider pursuing whatever claims and fighting whatever battles were thought to be worthwhile in the hope all might benefit from whatever victories were achieved. That is true for both acceptors and non-acceptors of R&R. The one sample name who might be placed in a different category was Mr Villiers who said that by 1994 he had determined to do nothing more, had more or less written off his liabilities and was not a member of any action group. But I do not think it was, in terms of s 14A, reasonable for a name who had suffered damage as Mr Villiers had, simply to ignore the prospects of recovery and especially so when he was or at least should have been aware that others were very much involved to that end. Like, of course, all the other sample names, he was ready to join in the present claim when it was launched. Subsection (10) of s 14A has, I think, a significant bearing on the position of all names.
 I will now seek to summarise the evidence about the knowledge of the names largely and simply by reference to samples from the section of this judgment entitled Chronology and Facts.
 There are certain facts which are indisputable. By, at latest, 1992 the sample names and, it is conceded, numerous names (and in all probability all names) had suffered significant losses and knew that they had done so. A reading of the chronology demonstrates also that at latest by the time of the publication of the business plan in April 1993 (see -) it was apparent that the losses affected numerous syndicates, such as to call into question the future of Lloyds, and were the result of under-reserving and the exposed inadequacies of RITC. Allegations that the (or a) cause of the losses was regulatory failures by Lloyds were made in Society of Lloyds v Mason in 1993 (see  and ) and thereafter, finding their most refined form in Society of Lloyds v Jaffray in 1997 (see  and ). The fact of such failures was apparent from the market-wide nature of the problem and the need for R&R. The role of the DTI in regulation of Lloyds was under debate and criticism from 1994 onwards (see , , -,  and ). The possible relevance of Community law and the Insurance Directive as a basis for claims against both Lloyds and/or the government arose in Society of Lloyds v Clementson and Society of Lloyds v Mason (see  and ), was known to Mr Stockwell ( and ) and to others ( and ) including the existence of Francovich liability or at least the possible right to compensation (, ,  and ). Mr Freeman said he had been aware of the Insurance Directive since 1994 and by 1996 was aware of Francovich v Italy  IRLR 84,  ECR I-5357 and the possibility of obtaining compensation from the DTI. He said what was lacking was evidence. He believed then that the DTI was doing what the directive required it to do. Miss Stewart-Smith (an acceptor of R&R) was able on her own to formulate a petition to the European Parliament as she did. Finally, as I have found (at ), there is nothing in the decision of the Court of Appeal in Society of Lloyds v Jaffray which justifies the case that any significant new fact emerged then. What happened after the Court of Appeal could have happened before it. The facts were there and the law no different.
 In my judgment, these matters demonstrate, as Mr Friedman submitted, that prior to 3 September 1999 the names, (including Mr Stockwell in his capacity as representing action groups) who did address their minds to European requirements were in fact aware of their possible relevance to the alleged regulatory failures by the government which they believed had, at least in part, caused the losses. They were in a position to justify setting about investigating a claim against the government on that basis. Reasonable inquiries by others would have put them in the same position or, perhaps more realistically, others chose to leave to action groups, and in particular to Mr Stockwell, the pursuit of any worthwhile claim. That was reasonable of itself, but I think carries with it the consequence that they are no better placed than those on whom they relied.
 Against this body of evidence there is very little to be put into the scales. Mr Freeman said that, to the best of his knowledge (and he would expect to know) none of the long list of distinguished lawyers who advised the names from time to time put forward the possibility of a Francovich/Factortame claim before the decision of the Court of Appeal in Society of Lloyds v Jaffray. But that may be no surprise if this judgment is right. Nor do I think it material to the questions asked by s 14A.
List of principal issues
 Again, I do not think it necessary to address each of the questions or matters raised in para 8 of the list of principal issues. The claims, as pleaded, are wholly statute-barred. Section 2 of the 1980 Act applies and provides for that result. Even if, which in my judgment it does not, by one route or another s 14A of the 1980 Act is applicable by analogy, the sample names, and in all probability all the claimants, had or are to be taken to have had the requisite knowledge more than three years before their claims were issued and so the claims would also be wholly statute-barred on that hypothesis.
 The Insurance Directive did not grant any relevant rights to the claimants and the claims as pleaded are statute-barred. It follows that the claims fail and fall to be dismissed. I will hear the parties on the appropriate form of order and any other ancillary matters which cannot be agreed on a date to be fixed after this judgment, which was supplied to them in draft form on 27 October 2006, is formally handed down.
DISPOSITION: Claims dismissed.
LIST OF PRINCIPAL ISSUES
1. (Grant of Rights) Are the three conditions referred to in the judgment of the Court of Justice in Cases C-6/90 and C-9/90 Francovich  ECR I-5357 satisfied in the present case in relation to the Insurance Directive, viz:
1.1 Does the result prescribed by the Directive entail the grant of rights to persons in the position of the Claimants?
1.2 Is it possible to identify the content of those rights on the basis of the provisions of the Directive?
1.3 Is there a causal link between the breach of the States obligation and the loss and damage suffered by the injured parties?
2. The first trial is concerned only with the first and second conditions. The Court is invited to assume for this purpose that the Claimants will establish their pleaded case (as amplified by the Particulars of Causation and Loss served on 11 July 2005) on causation.
3. The Claimants assert that the question whether the first and second conditions are satisfied is an issue of law: the question is one of construction of the Insurance Directive read alone or in conjunction with Article 43 EC and/or the 1991 Accounts Directive and is unaffected by the facts of any individual claim. The Defendant says that, while it is primarily an issue of law, it includes factual matters as to the position of the Claimants and the nature and effect of business underwritten by way of reinsurance to close. The issue may be expected to raise essentially the following questions for the Court:
3.1 Are the provisions of the Insurance Directive relating to the system of regulatory supervision for insurance undertakings concerning authorisation, accounting procedures and the verification of the adequacy of their solvency and technical reserves intended, for the reasons given in paragraphs 23 to 28C and 81B to 87 of the Re-Re-Amended Particulars of Claim, to introduce a uniform set of provisions for all Member States to facilitate the exercise of the right of establishment? (It is common ground between the parties that the answer to this question is yes, but the issue is a necessary one which will have to be identified and ruled on by the Court.)
3.2 Do those provisions grant rights to individuals, and if so what rights? (The Claimants submit that they do grant rights to individuals for the reasons given in paragraphs 81B to 87 of the Re-Re-Amended Particulars of Claim. The Defendant does not admit that these provisions grant rights to insurers (paragraph 4(1)(c) of the Re-Re-Re-Amended Defence), and otherwise denies that those provisions grant rights to individuals or were intended to do so: Re-Re-Re-Amended Defence, paragraph 89. The Defendants case is that if the Insurance Directive does grant rights to any individuals, it grants to individuals who are direct insurers the right to establish themselves in a host Member State, alternatively in a host Member State and (if there is a sufficient cross-border element) in the Member State of their origin, where they meet the conditions prescribed by the Directive.)
3.3 If those provisions grant rights to individuals, do they grant rights to:_ Insurers;
Insured persons when insured by reinsurance or retrocession; or
Third parties (in whatever sense is contemplated by the second recital to the Insurance Directive);
and, if so, what rights? (The Claimants say that the Insurance Directive grants to them in each of those categories the rights referred to in paragraph 3.5 below. As noted above, the Defendant does not accept that the Insurance Directive granted any rights but, if there was a grant, it was a grant to direct insurers of the right to establish themselves in a host Member State, alternatively in a host Member State and (if there is a sufficient cross-border element) in the Member State of their origin, where they meet the conditions prescribed by the Directive.)
3.4 As regards the grant of rights to insured persons and third parties, these give rise to the following sub-issues:
3.4.1 Are the Claimants insured persons in the sense contemplated by the recitals to the Insurance Directive as alleged in paragraph 84A of the Re-Re-Amended Particulars of Claim? Or, by contrast as the Defendant contends, do the Claimants fall outside that term on the ground that any relevant insurance policies from which they benefited were policies of reinsurance or retrocession rather than of direct insurance (Re-Re-Re-Amended Defence paragraph 90A.2.)
3.4.2 What does the term third parties mean in the second recital to the Insurance Directive? (The Defendant contends that it means parties, other than the insurer and the insured, who stand to gain from the proceeds of insurance policies, such as injured road users. (The Claimants contend that it includes parties in the position of Lloyds Names.)
3.4.3 Does the term third parties include persons whose relevant interest was in one or more policies of reinsurance or retrocession rather than of direct insurance? (The Defendant contends that it does not include such persons.) (The Claimants, subject to the reservation that the character of the insurance written goes to the issue of Breach and not Grant of Rights (see below, paragraph 3.6), contend that it does include such persons.)
3.4.4 Are the Claimants third parties in the sense contemplated by the second recital to the Insurance Directive as alleged in paragraph 84A of the Re-Re-Amended Particulars of Claim? (The Defendant contends that the answer is no.) (The Claimants contend that the answer is yes).
3.4.5 If and to the extent that the Claimants are insured persons and/or third parties in the relevant sense, is the Claimants claim brought in that capacity? (The Defendant contends not, because the Claimants claim qua insurers or reinsurers in relation to transactions which they undertook in the market.) (The Claimants contend that the concept of capacity is not a relevant one in this context; and that the Defendants contention in any event wrongly conflates the issues of Grant of Rights and Causation, the better formulation of the issue being that in paragraph 3.5 below. However, if the question is a proper and relevant one, the answer is yes.)
3.5 If those provisions grant rights to persons in the position of the Claimants, what rights do they grant?
(The Claimants say that they grant the right to require of Member States that they shall prescribe and apply the uniform provisions set out in the Directive which are the matters of which complaint is made in the present case. The Claimants also add that issues of the type of loss suffered which are relied upon by the Defendant in this context relate to causation and/or remoteness and not to the grant of rights.)
(The Defendant says that if the Insurance Directive does grant rights, it grants to direct insurers the right to establish themselves in a host Member State, alternatively in a host Member State and (if there is a sufficient cross-border element) in the Member State of their origin, where they meet the conditions prescribed by the Directive. It does not grant to individuals the right to bring a Francovich/Factortame claim against a Member State (whether the Member State of their origin or a host Member State) for failure to prescribe and apply the uniform provisions set out in the Directive save when that failure restricts or prevents their freedom of establishment. Accordingly, such right if any as may be granted is irrelevant and/or insufficient because the Claimants claims (a) do not arise from any infringement of a right of freedom of establishment but from losses the Claimants incurred in transactions undertaken by them as insurers on the insurance market, and/or (b) arise from transactions undertaken by the Claimants qua reinsurers or retrocessionnaires and hence fall outside the scope of the Directive altogether.)
3.6 If the Insurance Directive does grant rights to the Claimants in respect of losses on transactions entered into by them in the course of carrying on insurance business:
3.6.1 Are such rights limited, as the Defendant contends, to that part of the insurance business which comprises direct insurance?
3.6.2 If so, is business arising through the underwriting of reinsurance to close to be treated as direct insurance for the reasons given in paragraphs 2.2.1 and 2.2.2 of the Amended Reply? (The Defendant contends that the answer to this question is no.)
3.6.3 Alternatively, for the reasons given at paragraph 2.2.3 of the Amended Reply is such business to be treated as direct insurance if when the reinsured risk was first underwritten at Lloyds it constituted direct insurance? (The Defendant contends that the answer to this question is no.)
(The Defendant regards questions 3.6.2 and 3.6.3 as concerning the Grant of Rights issue. The Claimants, however, view them as going to the question whether, if the answer to question 3.6.1 is in the affirmative, there has been a breach in the circumstances of this case, i.e. issue 4; alternatively to the question of causation of loss, issues 6 and 7).
3.7 Alternatively, should the Claimants have a right to seek damages in respect of their claimed losses on the basis that the absence of such a right would put at risk the full effectiveness and/or practical effect of the relevant provisions of the Insurance Directive on the basis of Case C-453/99 Courage v. Crehan  QB 507 and as alleged in paragraph 87A of the Re-Re-Amended Particulars of Claim? (The Claimants contend that the answer to this question is yes.) (The Defendant contends that the answer to this question is no.)
3A. (Identifiable Content) If and to the extent that the Insurance Directive grants any rights to the Claimants, is it possible to identify the content of those rights on the basis of the provisions of the Insurance Directive? (The Defendant does not accept that the answer to this question is yes.).
4. (Breach) Did any breach of the Insurance Directive occur? The parties agree that this is a mixed issue of law and fact. The issue may be expected to raise the following questions (in addition, the Claimants say, to the issue described at para. 3.6):
4.1 For the purposes of the obligations of the United Kingdom under the Insurance Directive as regards the carrying on of insurance business at Lloyds, is the relevant undertaking a Lloyds syndicate or is it something else?
4.2 To what extent did the relevant provisions of the Insurance Directive give Member States a margin of discretion as to the choice of form and methods which they considered appropriate to achieve the required results?
4.3 Did the Insurance Directive on its proper construction impose on the United Kingdom the obligations alleged in paragraphs 23A and 28A to 28C of the Re-Re-Amended Particulars of Claim and paragraphs 4.1 and 8 of the Amended Reply?
4.4 Did the United Kingdom breach any of the obligations under the Insurance Directive:-
4.4.1 by delegating to Lloyds part of its obligations as alleged in paragraphs 61 to 69 of the Re-Re-Amended Particulars of Claim and paragraphs 3.3 and 14 of the Amended Reply? Or
4.4.2 (if permission to amend is granted to make the allegations foreshadowed by paragraph 59.1 of the Re-Re-Amended Particulars of Claim) by failing to transpose the provisions of the Insurance Directive into domestic law? or
4.4.3 by reason of the alleged inadequacy of (a) the accounting system of Lloyds and the setting of reserves at Lloyds and/or (b) the Defendants supervision of these matters, as alleged in paragraphs 70 to 80 of the Re-Re-Amended Particulars of Claim and paragraphs 3.2, 5, 8.1, 8.2 and 16-19 of the Amended Reply and/or (c) the Defendants verification of solvency, as alleged in Paragraph 80A of the Re-Re-Amended Particulars of Claim?
5. (Seriousness) Was any breach of the Insurance Directive sufficiently serious to ground liability? It is agreed that this is a mixed issue of law and fact. That issue may be expected to raise the following questions:
5.1 Did the relevant provisions of the Insurance Directive confer a wide measure of discretion to Member States as to the manner in which their objectives were to be achieved, such that liability could arise if at all only if the alleged breach were sufficiently manifest and grave?
5.2 Are the matters alleged in the Re-Re-Amended Particulars of Claim at paragraphs 90.1 to 90.5 (q.v.), 92-93 (nature of Lloyds), 94 (risk coding and reinsurance), 95 (unlimited liability policies), 96 (accounting and reserving inadequacies), 97-98 (disclaimers of supervisory responsibility) and 98A (failure to transpose, if permission to amend is granted to make the allegations foreshadowed by that paragraph) made out; and, if and to the extent that they are, does it follow that any breach of the Insurance Directive was sufficiently serious to give rise to liability, or by contrast are the circumstances of any breach such that it is not to be regarded as sufficiently serious to give rise to liability?
6. (Causation) Is there a sufficient causal link between the alleged breaches of the Insurance Directive and the damage alleged to have been sustained by the Claimants? That is a mixed issue of law and fact, but likely to be primarily one of fact. It may be expected to raise - cumulatively or alternatively - the following questions:
6.1 Which, if any, of the losses alleged to have been suffered by the Claimants have they proven would not have occurred but for the alleged breaches of the Insurance Directive? The Defendant considers that that entails consideration of the following specific matters, but the Claimant disagrees since the Directive is binding as to the result to be achieved, whether or not also requiring a member State to take particular steps to achieve that result:
6.1.1 Bearing in mind the answers to questions 4.1 to 4.3 above, by what method or methods was the United Kingdom entitled to implement the relevant requirements of the Insurance Directive?
6.1.2 If the method in fact used by the United Kingdom was not amongst those methods set out in the answer to 6.1.1 above, what is the minimum extent (if any) to which the use of any of those methods would have resulted in increases in the reserves of the relevant years of account of the relevant syndicates?
6.1.3 Had those reserves been increased to the extent referred to in 6.1.2 above, what (if any) difference would this have made to (i) the extent to which each Claimant participated in subsequent years of account and (ii) the losses which each Claimant has allegedly suffered?
6.2 The Claimants formulate the test of sufficient causal link as follows: did any breach by the United Kingdom of the Insurance Directive materially contribute to the whole or to some part of the losses claimed by each Claimant?
6.3 The Defendant prefers the following formulation:
6.3.1 Were any such losses a sufficiently direct consequence of the alleged breaches of the Insurance Directive?
6.3.2 Were the alleged breaches an effective or dominant cause of the losses alleged?
7. (Losses) What losses, if any, has each Claimant proven to have flowed from the alleged breaches of the Insurance Directive? The parties consider that, so far as certain Claimant-specific issues arise on the Claimants case on limitation, then issue 7 should also include the identification of such, if any, losses as are not time-barred.
8. (Limitation) Are any of the Claimants claims time barred? It is agreed that the applicable limitation period is prima facie that prescribed by s. 2 of the Limitation Act 1980. However, on the Claimants case (paragraph 7.1 of the Amended Reply) there arise issues as to when that period starts to run and as to whether, even if the period has expired in relation to all or part of the claimed losses, the Claimants are nevertheless entitled to rely on the alternative limitation period prescribed by s. 14A of the 1980 Act directly or by analogy. The Claimants will develop the following case at the first sub-trial:
8.1 As a matter of Community law, on the basis of the Emmott line of jurisprudence, the 6-year period prescribed by the 1980 Act s. 2 does not begin to run until the provisions of the Insurance Directive have been fully and adequately transposed into domestic law (Amended Reply, para. 184.108.40.206). That did not occur until 1 December 2001 (commencement of the FSMA 2000 regime for insurance undertakings at Lloyds) at the earliest. So these proceedings are in time as regards all the loss claimed.
8.2 If that argument is rejected, then it becomes pertinent to consider when time prima facie began to run for the purpose of domestic law, and to go on to consider whether, on the basis of the Claimants other arguments, the running of time is nevertheless postponed from that point.
8.3 As regards the prima facie starting point in domestic law, the Claimants have conceded that, unless the running of time is postponed on the basis of the Emmott argument or the other bases set out at paras. 7.1.1 - 7.1.4 of the Amended Reply, their claims for the losses pleaded in the Re-Re-Amended Particulars of Claim stand barred by s. 2 of the 1980 Act , regardless of which of the points described in paragraphs 9(a) and (b) of the Re- Re-Re-Amended Defence is chosen by the court as the point at which their causes of action arose. The Claimants will contend (para. 7.1.5 of the Amended Reply) that neither of those is the correct prima facie starting point. Time did not begin to run until substantial loss was first suffered, and moreover that is the earliest possible moment: the Defendants breach was repeated or continuing so that subsequent loss suffered in consequence triggered the running of time afresh in respect of that loss. But in any event the Claimants contend on three further grounds - one of domestic and two of Community law - that the running of time is postponed beyond the prima facie domestic starting date.
8.4 As a matter of domestic law, the Claimants say (pursuant to para. 7.1.4 of the Amended Reply) that on an ordinary construction of 1980 Act s. 14A, the Francovich cause of action involves fault on the Governments part and should be treated as an action for damages for negligence. So time does not run against an individual Claimant until he acquired, or ought to have acquired, the necessary knowledge. Thus even if by 2 September 2002 (or such later date on which a Claimant became party to the proceedings) 6 years had expired from accrual of any cause of action, a Claimant may proceed if he did not acquire, and ought not to have acquired, the relevant knowledge until on or after 2 September 1999.
8.5 Alternatively, and again pursuant to Amended Reply para. 7.1.4, as a matter of Community law the principles of equivalence and effectiveness require that the running of time be postponed, by analogy with s. 14A, on comparable terms to those provided by that section.
8.6 If, on either of those bases, a knowledge-based test is engaged as a matter of law, the Claimants will invite the court to find that the Claimants did not acquire, actually or constructively, the necessary knowledge until a point after 2 September 1999.
8.7 The Claimants final Community point is that to apply the once and for all limitation approach to this case would produce a result incompatible with the principle of effectiveness. That principle requires that a separate domestic limitation period start to run in respect of each substantial tranche of loss caused by the continuing failure to implement (Amended Reply, para. 7.1.3). The demands for Equitas premium made by Lloyds pursuant to the R&R settlement (reached on 3 September 1996) amounted to new and distinct tranches of loss, as would a subsequent or future demand against a Claimant arising under, or out of the failure of, the Equitas scheme. Each triggers a fresh limitation period under 1980 Act s. 2, and the claim is brought in time as regards these losses even if statute-barred in relation to earlier tranches of loss.
9. The Defendant contests each of the bases on which the Claimants contend that the running of time is postponed. It contends that time began to run once and for all against each Claimant at one of the points described in paragraph 9(a) and (b) of the Re-Re-Re-Amended Defence, and each Claimants entire claim is accordingly statute-barred.
10. The dispute between the parties is predominantly one of law. However, some generic and Claimant-specific factual questions arise. First, the factual background is material to the question whether it is established that the effectiveness of Community law requires a departure from the prima facie position in domestic law. Second, if s. 14A (or a rule akin to it) is found to apply, then it will be necessary to consider what relevant knowledge individual Claimants acquired and when (paragraph 8.6). Third, if the court adopts the approach contended for at paragraph 8.7, then factual questions arise as to what losses were suffered by individual Claimants within the limitation period.
11. It is agreed that, with the exception of (a) the Claimant-specific issue described at paragraph 8.6, (b) any Claimant-specific issues arising under paragraph 8.7 and (c) the matter referred to in the following sentence, all the Limitation issues are capable of determination at the first sub-trial. It is common ground that the question of whether the Insurance Directive was effectively transposed into English law is not a matter for the first sub-trial. The parties consider that the sub-trial of Breach may be a suitable occasion for determining that question. The Claimants will submit, however, that the Defendant should set out its case on that matter so that the Court hearing the first sub-trial is aware of the parties rival contentions. The issue at paragraph 8.6, if it arises, may be finally determined for the sample Names at the first sub-trial (see paragraph 11 of the CMC Order of 22 February 2005). The parties agree that the manner in which that issue, and any Claimant-specific issue arising under paragraph 8.7, should be managed and determined in relation to the remaining Claimants will depend on the precise terms of the courts findings following the first sub-trial, and can be considered further at that stage. The parties consider that the sub-trial of quantum may be a suitable occasion for determining some or all of those questions.
12. The Claimants will contend that the burden of establishing that all or part of the claims of some or all the Claimants are statute-barred rests with the Defendant.