LONDON firm Memery Crystal is acting for John Donner, the retired Lloyd's broker and underwriter, in a major legal action against the Society of Lloyd's and nine senior individuals in the market.
A writ has been served claiming breach of fiduciary duty. The action is based on a series of detailed allegations by Donner of negligence, malpractice and fraud against Names throughout the 1980s, when top officials, including three former Lloyd's chairmen, allegedly concealed information concerning the extent of asbestos liabilities.
Donner's allegations were contained in a submission already rebutted by Lloyd's and its lawyers Freshfields.
Donner said he regarded the move as potentially the “ultimate action”, drawing on claims and judgments in cases won by Names where “bad motive” and “concealment” have been proven, including the recent Merrett victory.
Lloyd's immunity against litigation in the Lloyd's Act 1982 will be no defence because his allegations of “bad motive, concealment and massive regulatory failure” amount to a fraud allegation, against which the Act is no protection, said Donner.
The 260 Names in the Donner Names Association (DNA) are expected to benefit if Donner wins this “test case”. The DNA is campaigning to bring in more Names. Donner said: “If this action gets through, then thousands of people out there will come with me.”
Richards Butler went to court last week as the Rose Thomson Young Names trial started. This case involves two claims totalling £300 million and alleging negligent underwriting of LMX business in 1989. City firms Cameron Markby Hewitt and Reynolds Porter Chamberlain are acting on behalf of the agents.