High Court rejects £ 1bn Lloyd's claim
Financial Times (London); Nov 9, 2006; p. 3
By Nikki Tait, Law Courts Correspondent
More than 1,000 wealthy investors in the Lloyd's of London insurance market yesterday saw their legal claim against the Treasury, potentially worth more than Pounds 1bn, thrown out by a High Court judge. The Lloyd's Names - individuals who use their wealth to back the underwriting activities of Lloyd's syndicates - were alleging that successive governments failed to implement properly a European Union directive dealing with insurance risk in the 1980s and 1990s. They claimed that if the market had been properly regulated by the government, substantial additional syndicate liabilities would have come to light - and that they would either not have joined Lloyd's or made smaller investments, and so avoided heavy losses. Names were hit particularly hard in the late- 1980s and 1990s when the market racked up huge losses on asbestos and pollution claims.
But the Treasury, which had responsibility for regulating Lloyd's before the task was handed over to the Financial Services Authority in 2001, strongly denied the investors' allegations. It maintained that the directive did not give the investors grounds for bringing their claims, and that, in any event, no breach of the directive had occurred. Among the hundreds of individuals listed as backing the "group litigation" challenge were two members of David Cameron's shadow cabinet - Dominic Grieve, shadow attorney-general, and Jonathan Djanogly, shadow trade and industry secretary - as well as numerous business figures. But this morning their claim came to an abrupt halt when Mr Justice Langley ruled that the EU insurance directive had not given the Names the rights necessary to allow them to bring the claims. He also found that the claims were time- barred. "It follows that the claims fail and fall to be dismissed," the judge said, at the end of a lengthy judgment.