Manning v Society of Lloyd's [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Mance J. |
| Judgment Date | 31 July 1997 |
| Date | 31 July 1997 |
| Court | Queen's Bench Division (Commercial Court) |
Queen's Bench Division (Commercial Court).
Mance J.
Anthony Grabiner QC and Joanne Wicks (instructed by Lloyd's of London) for Lloyd's.
Guy Philipps (instructed by Epstein Grower & Michael Freeman) for four names.
Graham Platt (solicitor) for two names.
The following cases were referred to in the judgment:
Lark v OuthwaiteUNK [1991] 2 Ll Rep 132.
National Westminster Bank plc v DanielWLR [1993] 1 WLR 1453.
Lloyd's insurance market — Reconstruction and renewal plan and settlement offer — Lloyd's offered names financial package to settle Lloyd's related litigation — Names returned acceptance forms with additions and alterations and covering letters — Whether additions etc varied terms of offer or were by way of clarification only — Whether variations constituted counter-offer accepted by Lloyd's.
These were applications by the Society of Lloyd's as plaintiff or counterclaiming defendant in four actions for summary judgment for declarations against individual members of Lloyd's to the effect that the member in question did not have the benefit of and was not subject to the liabilities of the Lloyd's settlement agreement.
As part of Lloyd's reconstruction and renewal plan, Lloyd's made a settlement offer to names which enabled names to accept, by returning an acceptance form, a financial package in return for settling their Lloyd's related litigation. The question was whether the relevant names had made any settlement agreement with Lloyd's: three names, “H”, “P” and “M” contended that by alteration to and/or a covering letter sent with the acceptance form they made counter-offers which Lloyd's accepted; “OH” contended that although he added additional words to the acceptance form and sent a covering letter the effect was still to accept the Lloyd's settlement offer on the terms on which it was made; “JC” and “PC” sent in acceptance forms with additions or adaptations which they said did not depart from or alter the terms of the settlement offer which they therefore accepted unconditionally. Lloyd's returned photocopies of the names acceptance forms stamped “received” and “acceptance” with the date in between. Lloyd's wrote to names informing them that conditional acceptances were not valid and inviting them to withdraw the conditions.
Held, giving judgment for Lloyd's:
1. In the cases of H, P and M, the return of the photocopy showing the stamp was at best equivocal and more readily understandable as a record for names' convenience. It was objectively incapable of constituting an acceptance of the name's counter-offer.
2. OH's response to the settlement offer was clearly not an unconditional acceptance. His response at best sought to accept subject to conditions and therefore did not in law amount to an acceptance. If his response constituted a counter-offer, Lloyd's did not accept it.
3. Even if words added to JC and PC's acceptances were too vague to represent a counter-offer capable of acceptance, they still amounted to a clear indication that the terms of the settlement offer were not acceptable and therefore a rejection of them. Further the acceptances were made “subject to” an accompanying letter and the effect of that was to qualify the acceptance.
Mance J: There are before the court applications by The Society of Lloyd's (“Lloyd's), as plaintiff or counterclaiming defendant in four actions, for summary judgment for declarations against individual members of Lloyd's. The declarations sought are in each case to the effect that the member in question does not have the benefits of, and is not subject to the liabilities of, any settlement agreement with Lloyd's (save, in the case of one member, a particular action group settlement agreement–“AGSA”).
The relevant names are in action 1997 Folio No. 131 Sir William John Colfox Bt and his son, Mr Philip Colfox, Mr Oliver Harris and Mr Nigel Hicks, in action 1997 Folio No. 1928 Mr Timothy Philips and in action 1997 Folio No. 1153 Mr Jan Manning.
The actions arise out of the Lloyd's reconstruction and renewal plan (“R & R”) designed to resolve severe problems caused by accumulated losses of some £8 billion reported in respect of the 1988–1992 underwriting years of account. The two central elements of R & R were (i) reinsurance of liabilities for the 1992 and prior years of account into a new reinsurance company, Equitas, and (ii) the settlement offer, which, in very broadest outline, enabled names at Lloyd's to accept a financial package in return for settlement of their Lloyd's related litigation.
In or about July 1996 names were sent a document entitled “Reconstruction and Renewal Settlement Offer”, a finality statement, an acceptance form and guidance notes. The settlement offer document is some 160 pages long, with a further 100 or so pages of appendices. Appendix 1 contained the “Settlement Agreement” expressed to be between Lloyd's and accepting names, Equitas, E & O insurers, underwriting agents, auditors, brokers, personal stop loss underwriters and others. Appendix 2 contained “Terms and Conditions of the Settlement Offer”. The presence of initial capital letters in these documents denotes a defined concept.
Appendix 1 provided by cl. 4.3 that each accepting name accepted the benefit of the amount if any set out in his finality statement to be applied to his benefit from the combined litigation settlement funds and/or debt credits and any part of the expenses refund payable to him or to any action group of which he was a member and the mutual covenants and agreements and other valuable consideration given by the other parties to the settlement agreement in full and final settlement of all of various defined categories of claim. These included, subject to stated but presently immaterial qualifications, claims arising out of, or in any way related to or connected with his recruitment to underwrite insurance business at Lloyd's, or his membership at any time of, or the management of one or more syndicates for the 1992 or any earlier year of account. Clauses 4.5 to 4.10 contain a series of express waivers and releases by each accepting name of all his claims against underwriting agents, brokers, Lloyd's (for itself and as trustees for other Lloyd's persons), Equitas and other parties to the settlement agreement.
Clauses 12.2 and 12.3 read:
“Disclosure
12.2 Each Party hereto acknowledges and agrees that, in relation to this Settlement Agreement and the making of the Settlement Offer:
(a) no Participant or Accepting Name owes any duty to make disclosure of any matter or any duty of care in respect of the making of any statement or representation;
(b) no Participant or Accepting Name shall be entitled for any reason whatsoever to rescind, reform or avoid or otherwise howsoever to terminate or cancel this Settlement Agreement on the grounds of any misrepresentation, misstatement or non-disclosure;
(c) without prejudice to sub clause (b) above, no Participating or Accepting Name shall have any liability whatsoever for any misrepresentation, misstatement or non-disclosure; and
(d) any Claim howsoever arising out of, or in anyway related to or connected with, any of (a) to (c) above is hereby waived and released.
This clause 12.2 shall not exclude any liability for fraudulent misrepresentation.
Parties
12.3 As from the date on which the conditions in Clause 2.1 are fulfilled, Lloyd's will maintain a list of the parties to this Settlement Agreement, which will be amended from time to time to include any Name or other person who may become a party pursuant to any of clauses 12.4, 12.5 or 12.7, and such list shall be available for inspection with the consent of the Solicitor to the Corporation at Lloyd's to any person with a legitimate interest therein (including any Participant or Accepting Name).”
Clause 12.20 reads:
“Whole Agreement
12.20 This Settlement Agreement sets out the entire agreement and understanding of the Participants and the Accepting Names in respect of the matters referred to in this Settlement Agreement and they acknowledge that they have not entered into this Settlement Agreement in reliance upon any representation, warranty or undertaking which is not expressly set out or referred to in this Settlement Agreement. The Settlement Agreement will be dated the date on which Lloyd's first receives a Form of Acceptance from an Accepting Name. Notwithstanding any other provision of this Settlement Agreement, the terms and conditions of the Settlement Offer set out in Appendix 2 to the Settlement Offer Document shall constitute part of the terms of this Settlement Agreement. In the event that there is any inconsistency between this Settlement Agreement and the terms and conditions of the Settlement Offer set out in Appendix 2 to the Settlement Offer Document, this Settlement Agreement shall prevail and be determinative of the rights and obligations of the parties hereto.”
Schedule 1 defined debt credits as meaning, in respect of each accepting name, any amount offered to him as so described and set out in his finality statement. The background is that Lloyd's had indicated that it would assist those who wished to accept the settlement offer, but were unable to do so through lack of means. A procedure was established whereby names were, by dates which were extended to 31 May (or in some cases 15 July) 1996, able to apply for relief on this ground by way of additional debt credits, known as tranche 4. Names were notified of any tranche 4 debt credits in their Finality Statements or at all events before the time limit for acceptance. The benefit of debt credits was restricted for certain categories of names, including active underwriters of syndicates with exceptionally large losses and directors or partners of managing agents responsible for such syndicates or of members' agents where the average member's loss was exceptionally large. The R & R document explained:
...
To continue reading
Request your trial
-
Society of Lloyd's v Fraser
...& Eliot Underwriting Ltd [1996] CLC 301 [1996] CLC 301 House of Spring Gardens v WaiteELR [1991] 1 QB 241 Manning v Society of Lloyd's [1997] CLC 1411 [1997] CLC 1411 Missouri Steamship Co, ReELR (1889) 42 ChD 321 Pezim v British Colombia (1994) 114 DLR (4th) 385 Ralli Bros v Compania Navie......