Lloyds TSB General Insurance Holdings Ltd and others v Lloyds Bank Group Insurance Co Ltd; Abbey National plc v Lee and others

Pages381-384
Date01 April 2001
Publication Date01 April 2001
DOIhttps://doi.org/10.1108/eb025091
AuthorJ Moore‐Bick
SubjectAccounting & finance
Journal of Financial Regulation and Compliance Volume 9 Number 4
Causal link emphasised between pensions
misselling and deficiencies in training
and supervision
Lloyds TSB General Insurance Holdings Ltd
and others v Lloyds Bank Group Insurance
Co Ltd; Abbey National plc v Lee and others
Queens Bench Division (Commercial Court): Moore-Bick J
Date of Judgment: 5th October, 2001
Reported at: [2001] 1 All ER (Comm) 13
FACTS
Private personal pension plans had been
represented and sold by representatives of
the two claimants in these conjoined
actions to members of the public as an
alternative to occupational pension
schemes. As is only too well known by
now these sales were in contravention of
the obligation to give 'best advice' under
the Financial Services Act 1986 and applic-
able LAUTRO Rules and Code of Con-
duct. Both claimants had as a consequence
incurred, in aggregate, considerable liabil-
ities in respect of their sales of private per-
sonal pension plans. Viewed individually,
however, the claims were modest in size
and did not amount to more than
£15,000. In view of the large total amount
the Lloyds TSB claimants sought to claim
under an indemnity policy issued by the
defendant in the first action which pro-
vided (inter
alia):
'Subject to the Limit of Indemnity, the
Underwriters shall be liable only for that
part of each and every third party claim
during the Policy Period which exceeds
the Deductible stated in item 7 of the
Schedule. The Deductible shall apply to
each and every third party claim and
shall be subject to no aggregate limita-
tion. If a series of third party claims shall
result from any single act or omission
(or a related series of acts or omissions)
then, irrespective of the total number of
claims, all such third party claims shall
be considered to be a single third party
claim for the purposes of the application
of the Deductible.'
The relevant clause in the policy held by
Abbey National was for all material pur-
poses the same in terms of its effect and
stated:
'If a series of third party claims shall
result from any single negligent act,
negligent error or negligent omission or
breach of statutory duty, or compliance
with a Restitutionary Order made under
the provisions of the Financial Services
Act 1986 (or a related series of negligent
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