Storm clouds are finally lifting from Lloyd's of London after the embattled insurer reported record profits and successfully pushed through its rescue plan at meetings held last week.
Litigation by Names, many of whom faced financial ruin after the market's massive losses in the late 1980s, has subsided in the past year.
This has helped Lloyd's to put the past behind it and draw up plans which envisage a more important supporting role for corporate capital.
Many commentators believe that the days when Lloyd's relied almost exclusively on the private wealth of individual Names to sustain the market will soon be a thing of the past.
Lawyers point out that a number of important legal landmarks have been established by the courts during actions by disgruntled Names. These should help the market face the future with renewed confidence.
According to David Tiplady, insurance expert at DJ Freeman, the House of Lords Henderson and Merrett judgment revisited the issue of duty of care given by professional advisers to those they are advising. “The judgment clarified the law where it had been getting confused,” said Tiplady.
Another important case was brought and won by Names in the Gooda Walker Action Group which illustrated the responsibilities of underwriters.
It was also established that there were duties owed by a member's agent when advising a Name which syndicate to join, and the amount of funds to subscribe to each one.
The Gooda Walker case, brought on behalf of Names by Wilde Sapte's Philip Rocher, was one of the largest actions in legal history. The litigation involved 187 pages of schedules detailing losses to Names.
It is likely that action taken by Names alleging negligence and incompetence over the way their affairs were managed, helped to persuade the Lloyd's establishment to come up with a substantive rescue plan.
That said, the legal fireworks may not have run their course.
Members of the so-called Paying Names Action Group, are threatening to sue over being unfairly penalised by the £3.1 billion out-of-court settlement to compensate loss making Names. They object to the fact that Names who continued to trade during the crisis of 1987-92 are being forced to surrender £440 million of their profits from the last three years to finance the rescue package.
However, Lloyd's has demonstrated remarkable staying power. Leah Dunlop, insurance expert at Lovell White Durrant, said: “This is primarily because of its strong brand name and the fact that a claim on its insurance policy has never not been paid.”
That point is echoed by Michael Robin at Hammond Suddards who commented: “At the end of the day, Lloyd's has managed to hang on to most of its clientele. Moreover, the insurance cycle has now turned, and the market is making huge profits.”