There always has to be a twist. Just when you might have thought the Jaffray case – and with it the last of the Lloyd's litigation – was over, the Names once more tried to pull something out of the hat. The very day that Mr Justice Cresswell delivered his judgment, the Names – through their legal team More Fisher Brown and counsel Simon Goldblatt QC, Vincent Nelson and Gordon Nardell – suddenly sought to amend their pleadings to bring the Human Rights Act into play.
"Were we surprised?" asks a Lloyd's source rhetorically. "Not in the context of the Names trying to go down every single avenue they could." Freshfields Bruckhaus Deringer litigation partner Geoff Nicholas, who is representing Lloyd's in the case, adds: "It's the first major commercial case in which the Human Rights Act has been pleaded."
The application for leave to amend the pleadings, if the Names do not accept Lloyd's fresh settlement offer, will be heard in April this year. This new argument revolves around Section 14 of the Lloyd's Act of 1982, which granted Lloyd's statutory immunity. It means that Lloyd's, like the Bank of England or the Financial Services Authority, cannot be sued for negligence. But the Names argue that section 14 offends Article 6 of the European Convention on Human Rights, the right to a fair trail. "Section 14 has to be read and construed in a much more limited sense than was appropriate in the past," says Simon Goldblatt QC.
It is a dramatic twist to a case which is already dramatic enough. The Jaffray action – which concerned three sample Names who had not accepted the reconstruction and renewal (R&R) settlement – has assumed huge importance. Cresswell himself, who has presided over all the Names litigation since Mark Saville was promoted in the mid-1990s, described it as the last piece in the Lloyd's litigation jigsaw.
The question: did Lloyd's make misrepresentations that it knew to be untrue? And had such misrepresentations been communicated to the Lloyd's Names – and if so, when? The Names said that certain alleged representations derived from the brochures and global accounts made by Lloyd's to external Names, were false and fraudulent.
The trial began on 28 February 2000 and lasted 64 days. Even the bald statistics are telling – as part of the pre-trial process, Lloyd's disclosed some 60,000 documents, which is believed to be one of the largest disclosure exercises in the history of English civil litigation. There were 198 trial bundles and 40 witnesses gave oral evidence. In a 400-page judgment delivered on 3 November 2000, Cresswell found for Lloyd's, rejecting all of the Names' allegations.
The two primary legal teams have had long experience of Lloyd's-related litigation. More Fisher Brown in particular has acted for Names since the early days, and had scored a key victory for the Merrett Action Group.
Freshfields, which had not been involved in the first stage of the Names litigation against various syndicates, really started to get busy in the mid-1990s. Two members of the litigation team, Geoff Nicholas and litigation department head Jo Rickard, played a large part in the R&R proposals back in 1996.
Having used Lord Grabiner QC and Gordon Pollock QC for previous test cases where Lloyd's established the right to recover debts from the Names, the Freshfields litigation team realised that neither silk was available for the six-month trial. So Lloyd's and Freshfields beauty-paraded three QCs, finally picking Charles Aldous QC, head of 7 Stone Buildings (now merged with Michael Lyndon-Stanford QC's 13 Old Buildings) and Richard Jacobs QC of Essex Court Chambers.
Aldous was fresh from his exploits in OFT v Premier League. "Charles was the day-to-day leader – he did the oral opening and closing submissions and most of the cross examination," says Nicholas. Jacobs handled certain technical areas of the case, and helped draft the gargantuan written closing submission, which ran to 1,200 pages. The Freshfields team, meanwhile, consisted of Nicholas, Raj Parker, David Scott and, in a strategic capacity, Jo Rickard, client contact partner with Lloyd's.
On 21 December 2000, Lloyd's went back to court to make a settlement offer to the remaining Names. It argued that it "shared Cresswell's desire to reduce, if not eliminate, further litigation", and was making the offer in order to give the Names an opportunity to settle the outstanding liabilities.
So is Jaffray the last of the Lloyd's litigation? Cresswell has so far denied the Names leave to appeal, so Freshfields' victory for Lloyd's does not look about to be overturned. It may be that the Human Rights Act is the Names' new weapon. But as any litigator will tell you, you can never quite predict what an emotional client will do next.
The legal teams:
Lloyd's: Geoff Nicholas, Raj Parker, David Scott, Jo Rickard (Freshfields Bruckhaus Deringer); Charles Aldous QC (7 Stone Buildings); Richard Jacobs QC, David Foxton, Stephen Houseman (Essex Court Chambers).
The United Names Organisation: Jim Edwards (More Fisher Brown); Simon Goldblatt QC, Vincent Nelson (39 Essex Street); Gordon Nardell (6 Pump Court).
Other Names: Grower Freeman & Goldberg; Patrick Talbot QC, David Drake, Giles Richardson (Serle Court); David Craig (Devereux Chambers).