EUROPEAN Parliament President Pat Cox has rejected a bid by the assembly's legal affairs committee to take the European Commission to court over the Lloyd's of London affair.
The legal committee backed court action earlier this month, claiming that the Commission had failed to respond to MEPs' demands for an answer to a question concerning the UK's supervision of the market.
Deputies wanted the Commission to state whether it believed the UK had failed to supervise the market before a new regime entered into force two years ago.
A number of Lloyd's investors want compensation for huge losses they incurred after Lloyd's received a series of asbestos-related claims.
They allege that a proper audit in the market, in line with EU rules, would have revealed the potential losses, but was never carried out.
The Commission said its remit only concerns ensuring current rules are in line with the EU law.
However, Cox says the Parliament's legal service has advised him that the assembly needs to bolster its case before he triggers a European Court of Justice battle.
His spokesman David Harley said: "The advice Cox got is that the request is not sufficiently soundly based and that it would not be considered admissable by the Court. We asked them to go back and reformulate it with more solid arguments."
A Parliament legal expert said it was not good enough merely to ask the Commission a question.
He said deputies must vote on a new resolution explicitly stating that it demands an answer to the Lloyd's question and threatening legal action.
Diana Wallis, a UK Liberal MEP, said the legal affairs commitee "stands by its decision".
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