P J AIKEN & ORS v STEWART WRIGHTSON MEMBERS AGENCY LTD & ORS ("THE PULBROOK SYNDICATES") (1995)
QBD (Potter J)
10/2/95
INSURANCE - CONTRACT -
TORT
LLOYD'S NAMES LITIGATION
: REINSURANCE
Duties owed by
managing and management agents to Lloyd's Names.
Trial of a preliminary
issue in eleven consolidated actions by 378 Lloyd's Names who were members of
Lloyd's Syndicates Nos.333, 334, 335, 426 and 427 ('the Syndicate') for the
1985 underwriting year of account against the Syndicate's members agents, (1st
to 9th defendants in the lead action) and the Syndicate's managing agents (the
10th defendants in the lead action), Pulbrook Underwriting Management ('PUM'),
for breach of contract and negligence. The actions arose out of a contract of
reinsurance made on 18/9/81 which arbitrators found by a majority had been
lawfully avoided by Syndicate 418. The essence of the Syndicate's claim against
PUM was that PUM owed a duty of care in and about the management of the
Syndicate's underwriting at Lloyds and that PUM was in breach of that duty in
three respects corresponding to the three grounds of avoidance upheld by the arbitrators
in relation to the placing of run-off reinsurance with Syndicate 418.
HELD: (1) The Members
Agents owed a duty in contract (but not in tort) to all the plaintiffs, whether
by themselves or PUM to act with reasonable skill and care in relation to the
placing of the run-off reinsurance in September 1981. (2) PUM owed a duty in
tort to all of the plaintiffs to act with reasonable skill and care in relation
to the placing of the run-off insurance in September 1981. (3) The Members
Agents and PUM were each in breach of their respective duties by reason of
PUM's failure to disclose the three matters which it was held in the Interim
Award should have been disclosed. (4) If the three matters that should have
been disclosed, had been disclosed, run-off reinsurance would have been placed
on the same terms as it was in fact placed, save the premium would been US
$750,000. (5) Save for the 11 plaintiffs whose Underwriting Agency Agreements
were under seal (and save that the claims of Brusse And Finch have been
reserved for agreement or further argument), all of the plaintiffs' claims in
contract against the Members Agents in relation to run-off reinsurance were
statute-barred.
Decision accordingly.
LTL 20/2/95 : TLR
8/3/95 : (1995) 3 All ER 449 : (1995) 1 WLR 1281 : (1995) CLC 318
Document No.
AC0002078