Society of Lloyd's v Leighs
| Jurisdiction | England & Wales |
| Judge | Saville,Ward,Phillips L JJ |
| Judgment Date | 31 July 1997 |
| Date | 31 July 1997 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Saville, Lord Justice Ward and Lord Justice Phillips
Lloyd's litigation - names rejecting renewal plan - names still liable to pay premiums
Lloyd's names who rejected the reconstruction and renewal plan by Lloyd's for the voluntary global settlement of claims in respect of business written in or before 1992 were, nevertheless, liable to pay premiums pursuant to a reinsurance and run-off contract concluded as part of that plan.
The Court of Appeal so held in a reserved judgment dismissing the appeals of the defendant names, Geoffrey Lyon, Dennis Leighs and David Wilkinson, against decisions of Mr Justice Colman in the Commercial Court of the Queen's Bench Division on February 20 and April 24 giving summary judgment for the plaintiffs, the Society of Lloyd's, and declaring that the names were liable to pay premiums pursuant to a reinsurance and run-off contract concluded as part of the society's reconstruction and renewal plan which the names had rejected.
215 Canadian names, who had also rejected the plan, intervened in the actions, which were test cases.
Mr Simon Goldblatt, QC and Mr Vincent Nelson for the names; Mr Anthony Grabiner, QC, Mr Richard Jacobs and Mr David Foxton for Lloyd's; Mr Alan
Lenczner, QC of the Ontario Bar, and Mr Craig Orr for the Canadian names.
LORD JUSTICE SAVILLE, giving the judgment of the court, said that the appeals raised fundamental questions as to the efficacy of the complex scheme under which the Society of Lloyd's had set out to resolve the avalanche of litigation that had been threatening to destroy the Lloyd's market and many who traded in it.
That scheme, the reconstruction and renewal plan, involved a voluntary global settlement of claims of various descriptions made by and against names in respect of business written in or before 1992 coupled with a reinsurance and run-off contract, in the nature of a global reinsurance to close, with a group of companies formed specifically for that purpose: the Equitas contract.
Lloyd's had purported to procure that all names with actual or potential liabilities in respect of non-life business written in or before 1992 were party to the Equitas contract.
If Lloyd's had succeeded in that, names who had declined to take part in the reconstruction and renewal settlement were, none the less, liable to pay premiums for the reinsurance cover provided by Equitas. Equitas had assigned the right to such premiums to the society.
The Equitas contract
Each of the names had entered into a standard form agreement with the society, the general undertaking, which included an undertaking by the name to comply with the...
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