14 December 1994
Times Law Reports
Queen's Bench Division
Regina v Chairman of the Regulatory Board of Lloyd's
Ltd, Ex parte Macmillan and Another
Before Mr Justice Macpherson of Cluny
(Judgment November 25)
Practice - loss review - assessing risk of
prejudice to litigation
Assessing risk of prejudice to litigation
Where a loss review was concurrent with litigation,
the court should ascertain on a balance of probability whether there was a
sufficient risk of prejudice to a party to the litigation to justify the
exercise of discretion to order the loss review to be stayed until the end of
the trial at first instance.
However, as the purpose of a loss review was not
disciplinary but was to track down reasons for losses and where the purpose of
litigation was to establish negligence or breach of statutory duty and recover
damages, there was no total overlap of issues to merit the sparing exercise of
the court's power to intervene.
Mr Justice Macpherson of Cluny so stated in the
Queen's Bench Division when dismissing an application for judicial review by
Roderick Macmillan and Stuart Thompson of a decision of the chairman of the
regulatory board of Lloyd's of London made on June 10, 1994 on behalf of the
Council of Lloyd's refusing to suspend the loss review of syndicate 80 of which
Mr Macmillan was the former principal underwriter and syndicate 843 of which Mr
Thompson was a former underwriter.
Mr Ian Hunter, QC and Mr David Joseph for the
applicants; Mr Richard Gordon, QC and Mr Steven Kovats for Lloyd's.
MR JUSTICE MACPHERSONsaid that in each case a
balancing exercise had to be performed. In some cases it might be in order for
the loss review to continue, in others where there was prejudice it should not.
His Lordship was unable to give more general help
other than to point to the relevant principles. The principles to be applied
came from a series of Court of Appeal cases.
The most recent was R v Institute of Chartered
Accountants in England and Wales, Ex parte Brindle (The Times January 12)
but the present case was not parallel with Ex parte Brindle.
A loss review was not itself disciplinary. Its purpose
was to track down the reasons for losses and to reveal the facts. The purpose
of litigation was to establish negligence or breach of statutory duty and to
recover damages. There was therefore no virtual eclipse of issues.
Many names were interested in the loss review and were
not interested in litigation and there were other agents involved in litigation
and not in the loss review.
The advanced stage of the loss review and the evidence
suggested that there was considerable public interest to conclude it because
the non-litigating names and Lloyd's were entitled to see it ended.
In the present case there were as yet no points of
claim, no detailed pleadings. The loss review would surely end long before
litigation was prepared for court and probably before any express allegations
had been put against the defendants.
Where the clash of proceedings was between litigation
and disciplinary proceedings the fact that the conclusions did not match might
lead to
unfairness. But that was not so in the present
situation.
Solicitors: Holman Fenwick & Willan; Mr Richard
Prior.