Investors in Lloyd's of London who refused to accept the settlement agreement offered last fall suffered a blow in their attempt to avoid paying money Lloyd's says they owe for reinsurance.
Lloyd's announced Thursday it had won a summary judgment in the English High Court giving them the go-ahead to pursue two Names, or investors, who have refused to pay their premiums to Equitas, the reinsurer set up to take over old Lloyd's liabilities.The court has effectively ruled that those Names who did not accept the settlement offer under Lloyd's Reconstruction and Renewal plan, which included the formation of Equitas, are still obliged to have their losses reinsured by Equitas. They are therefore liable to pay the premiums.
Lloyd's spokesman Andrea Hurst said Lloyd's had served 302 Names with 509 writs demanding payment so far; with a further 513 writs for 354 Names issued, but not served.
Christopher Stockwell, chairman of the Lloyd's Names Associations Working Party, said there were still two more issues to be dealt with in the case. ''I don't think it moves Lloyd's on one jot,'' he said. ''What it does show is that Lloyd's has the power to appoint a substitute agent and make financial contracts on (investors') behalf without their consent. I should think Names would appeal it. It's an extraordinary situation.''
Philip Holden, head of Lloyd's financial recovery deparment, said Lloyd's pursuit of non-acceptors who had not paid would be ''vigorous and effective.''