Lloyd's of London has welcomed a decision by the U.S. Supreme Court to refuse to hear an appeal filed by 93 investors, or Names, on a case revolving around whether or not Lloyd's can be sued in U.S. courts. Under the so-called Forum Selection clause included in the agreement signed by all new and ongoing Names since 1987, any disagreements were to be resolved in the English courts. But many U.S. Names, who lost a disproportionate amount in the disastrous period of huge losses at Lloyd's, have been trying to bring cases against the insurance society in the United States.
The American Names Association, which represents about 1,000 of the 3,000 Names in the United States, however, claims Monday's decision doesn't affect the much larger case in California, Richards vs. Lloyd's of London, and Leslie vs. Lloyd's of London in New Orleans, which are still pending.In that case, the 9th U.S. Circuit Court of Appeals in March reversed a lower court ruling, effectively giving U.S. Names permission to sue in U.S. courts. But this ran against the findings of five other Circuits, pointed out Nick Doak, spokesman for Lloyd's, Wednesday. ''And the Supreme Court has declined four times now to hear further appeals on the issue,'' he added, referring to Monday's decision in the case ''Allen vs. Lloyd's of London.''
''If the 9th Circuit goes against five others, one wonders if they are following the same law,'' he said, arguing that the 9th Circuit's position on the issue would have bearing on the Richards case in terms of weight of legal opinion. Jeffrey C. Peterson, executive director of the ANA, said the reversal in the Allen case was ''narrowly focused on procedural irregularities,'' and doesn't particularly overthrow the Ninth Circuit opinion.
However, in August last year, when the case came up for hearing in Virginia, Lloyd's admitted it was important enough to threaten its crucial Reconstruction & Renewal program; and the Securities and Exchange Commission submitted a ''friend of the court'' opinion saying that it thought the U.S. courts an appropriate forum for the dispute.