Names' action hinges on appeal

LAWYERS acting for thousands of Lloyd's Names are awaiting a crucial expedited Court of Appeal ruling following the first summary judgement victory for a Lloyd's agent against a Name last week.

It is hoped that the case will go to trial, when the full defence of Lloyd's Name Dr Andrew Higgins will be heard.

The case leaves the door open for a flood of actions against Names unwilling to cover losses in the Lloyd's market.

However, solicitor Michael Freeman, acting for Higgins, said: “It's an important period for Names, but we are confident the Court of Appeal will support its previous decision in the Clementson case, by finding it proper that this case should be dealt with by way of a full trial.”

The Higgins case follows similar summary hearings in the Clementson case, due for full trial in January. Higgins had a similar defence under European competition law.

However, the Higgins case focuses on Names' agreement with Lloyd's agents, while Clementson involves rules of the Lloyd's Corporation central fund.

In ruling that Higgins had no defence, Mr Justice Rix argued that the European defence used in Clementson – that the central fund agreement is void because it is allegedly anti-competitive under Article 85 of the Treaty of Rome – did not apply in Higgins.

The Lloyd's Names Association's Working Party said: “We are disappointed that once again we have to go to the Court of Appeal in order to establish a fundamental point of law. It appears that the lower courts have still not grasped the importance of European law.”

Freeman said he was “surprised” by the ruling. “We can see absolutely no difference between the argument focusing on the central fund and this argument focusing on the agency agreements.”

Dibb Lupton Broomhead partner Susan Dingwall, acting for managing agent Marchant & Eliot Underwriting, said this “significant ruling” upheld the “pay now, sue later” provisions in agency agreements.

Freeman said if the Higgins case failed, it meant “open sesame” for actions against Names. Lloyd's agents have another 350 writs ready to be served and more in the pipeline.