Lloyd's names fail in claim against government based on failure to implement insurance directive
| Published date | 09 May 2008 |
| DOI | https://doi.org/10.1108/13581980810869823 |
| Date | 09 May 2008 |
| Pages | 188-191 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL COMMENTARY
Lloyd’s names fail in claim against
government based on failure
to implement insurance directive
Joanna Gray
University of Newcastle upon Tyne, Newcastle upon Tyne, UK
Abstract
Purpose – The purpose of this paper is to report and comment on the Court of Appeal, Poole and
Others v. HM Treasury.
Design/methodology/approach – The paper outlines the facts surrounding the cas e and
comments on the ruling.
Findings – Lord Justice Buxton gave the only judgment in this appeal, with which his fellow judges
concurred, and he confirmed that the lower Court was right to dismiss the appellants’ claim based on
their interpretation of the 1973 insurance directive and the effect of the European Court of Justice
decision in Francovich.
Originality/value – The Court of Appeal, in this decision, confirms that the principles of European
law surrounding state liability are unlikely to be of much help to those who suffer such losses and see
them partly as a result of state or regulatory failure.
Keywords Legal decisions,Insurance, Underwriting
Paper type Research paper
Poole and Others v. HM Treasury (Court of Appeal: Civil Division: Lord Justices
Buxton, Jacob and Moore-Bick).
Date of decision: October 24, 2007.
Facts
The background to this Court of Appeal decision lay in the large-scale losses suffered
by many of the underwriting members (or “Names”) of the Society of Lloyd’s of London
insurance market in the 1980s and their subsequent attempt to recoup those losses.
The factual background to these losses and some of the earlier attempts by the
appellants in this action to recover those losses was summed up succinctly at the outset
of the judgment in this appeal given by Lord Justice Buxton:
The story of the Lloyd’s debacle has been told many times, [...]Put very shortly, a “name” by
joining a syndicate at Lloyd’s and thus becoming a person offering the services of an insurer
on the Lloyd’s market, accepts unlimited liability for his proportion of the obligations of the
syndicate incurred in the relevant year of account. These include, in addition to obligations
arising during the year in question, obligations incurred by the syndicate’s predecessors in
earlier years but not yet reported, which the syndicate has accepted by way of reinsurance of
the immediately preceding year under the practice known as re-insurance to close. At the
beginning of the 1980s it became apparent that per-sons insured by Lloyd’s syndicates were
faced with very substantial liabilities, in particular in respect of asbestos-related injuries,
many of them incurred many years previously but not until lately identified or reported. In its
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
JFRC
16,2
188
Journal of Financial Regulation and
Compliance
Vol. 16 No. 2, 2008
pp. 188-191
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980810869823
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