The future for around 14,000 Lloyd's Names facing legal action by the Lloyd's corporation hangs in the balance as they await a major Court of Appeal judgment. Lloyd's is seeking to recover the solvency shortfall to cover its u2 billion losses.
The Appeal Court has reserved judgment on two separate but parallel cases which have been considered on preliminary issues of law.
Lawyers in the cases argue that Names John Clementson and Gian Carlo Allesandro Mason are not liable for Lloyd's losses.
The case could be even more significant for Names than the individual actions against underwriters, say lawyers watching the case.
One lawyer says: “If their lordships find for the Names, that of course will be of enormous significance.”
Should the appeal court finds in favour of the Names, then their cases will go to the Commercial Court. It is expected that the Names will take their case to the House of Lords as a further preliminary issues hearing if the court finds against them.
City firm SJ Berwin & Co is acting for Clementson, who is a lead case for the Writs Response Group, with over 1,000 Names. Epstein Grower & Michael Freeman acts for Mason.
A central defence for both Names is that Lloyd's central fund is in breach of Article 85 of the Treaty of Rome because it is allegedly competition-distorting.