Cloud hangs over Feltrim case

As the court case for Feltrim Names begins this week, it is still uncertain whether the plaintiffs will benefit from the judgment in the u504 million Gooda Walker victory.

Both Feltrim and Gooda Walker are LMX – London market excess of loss – spiral cases, involving the reinsurance of losses within the Lloyd's of London market.

While group actions in each class of case will be similar, it appears that they will be judged largely on the facts of each action. The Gooda Walker judgment, for example, contained little general principle and established liability only within the parameters of that case.

David Tiplady of DJ Freeman, who acts for about 4,000 Names in different groups says: “Gooda Walker is a tremendous fillip for Names, but I don't think last week solved a great deal. The judge was not condemning market practice, but that the underwriters got it wrong.”

Richard Slowe of SJ Berwin & Co, also acting for Names, says: “The judgment was very limited – it doesn't give guidance for other cases.”

He says: “The most useful aspect for Names is that it shows that Names have a genuine and legitimate case.”

But Phillip Rocher of Wilde Sapte, acting for the 3,096 Gooda Walker Names, says the judge said it was difficult to see how participating in the LMX spiral was compatible with competent underwriting. “This is more than just a fillip – it will eff-ectively be a template against which they can test underwriting in other LMX cases.”

The longtail cases on asbestosis and pollution, starting in February with Merrit 418, will have more principles in common.

SJ Berwin has just served writs for u450 million on behalf of 1,000 Names against Cuthbert Heath Underwriting Ltd, 70 members' agents and auditor Arthur Andersen. It is also handling the Writs Response Group's defence against Lloyd's claims against non-paying Names. A Court of Appeal judgment was imminent at the time of going to press.

Meanwhile DJ Freeman is awaiting judgment on the Syndicate 334 case, where 450 Names are claiming u80 million in losses.