Law Report: Duty of care is owed to names: Arbuthnott v Feltrim; Deeny v Gooda Walker; Henderson v The Merrett Syndicates - Court of Appeal (Sir Thomas Bingham, Master of the Rolls, Lord Justice Hoffmann and Lord Justice Henry), 13 December 1993.

Underwriting agents of Lloyd's names, whether members' agents or managing agents or both, owe a duty of care to their names to exercise reasonable care and skill in the conduct of underwriting business.

The Court of Appeal unanimously dismissed appeals by underwriting agents of Lloyd's names from Mr Justice Saville's decision on 12 October 1993 that the underwriting agents owed a duty of care to their names.

A Lloyd's name was not a professional underwriter and appointed an underwriting agent to conduct the underwriting on his behalf. The underwriting agents, known as members' agents, were appointed under an underwriting agency agreement. The underwriting was done on behalf of the name through a syndicate of which the name, with others, was a member. Syndicates were managed by managing agents who employed a professional underwriter. The underwriting agent might be both the member's agent and managing agent, or only the member's agent but appointing a managing agent under a sub-agency agreement.

Before 1987 there was no prescribed form of agreement between name and underwriting agent, but agreements were of a uniform standard. From 1987, under Lloyd's by-laws, a standard form of agency agreement became mandatory.

Bernard Eder QC and Colin Edelman (Oswald Hickson Collier) for Merrett members' agents; Bernard Eder QC and David Foxton (Elborne Mitchell) for Feltrim members' agents; Bernard Eder QC and Christopher Butcher (Elbourne Mitchell) for Gooda Walker members' agents; Anthony Temple QC and John Rowland (Reynolds Porter) for Merrett managing agents; John Rowland (Clifford Chance) for Feltrim managing agents; Anthony Boswood QC and Stephen Moriarty (Moore Fisher Brown; Richards Butler) for the Merrett names and Feltrim names; Geoffrey Vos QC and David Lord (Wilde Sapte) for Gooda Walker names.

SIR THOMAS BINGHAM MR said that the first issue concerned the liability of managing agents to names before 1987. Although managing agents who were not also members' agents had control and management of the underwriting, the agent was not absolved from the duty ordinarily binding on any professional agent to exercise reasonable care and skill. Any successful claim against the agent in negligence would have to show a failure to show the standard of skill and care reasonably to be expected of such an agent at the time and with the knowledge that he had or should have had.

The managing agents owed a tortious duty to the names to take reasonable care not to cause them economic loss. It was not easy to think of a non-contractual commercial relationship in which a duty of care more obviously ought to exist than the relationship of managing agent and name.

Where the managing agents were also members' agents and therefore in direct contractual relations with names, the argument that the contract governed relations between them and regulated the duty of care so that the court would not impose a concurrent duty of care in tort should be rejected. The names did not rely on the law of tort to provide a duty more extensive or far-reaching than the contractual duty, even though the names gained the benefit of a more advantageous limitation period.

Under the post-1987 agreements, members' agents who were not also managing agents were prevented from carrying out the underwriting but had a comprehensive power to delegate. Under the plain meaning of the agreement the members' agents did undertake to conduct on behalf of the name the underwriting business of the name, including the functions which the managing agents performed.

If any underwriting transaction was conducted without reasonable care and skill, it would not avail members' agents to demonstrate that other underwriting transactions were properly conducted. Mr Justice Saville's rulings would be affirmed.

Ying Hui Tan, Barrister

Arts and Entertainment
Characters in the new series are based on real people, say its creators, unlike Arya and Clegane the Dog in ‘Game of Thrones’
tv'The Last Kingdom' embraces politics, religion, warfare, courage, love and loyalty, say creators
Arts and Entertainment
Unless films such as Guardians of the Galaxy, pictured, can buck the trend, this summer could be the first in 13 years that not a single Hollywood blockbuster takes $300m

film
Arts and Entertainment
Miley Cyrus has her magic LSD brain stolen in this crazy video produced with The Flaming Lips

music
News
peopleThe Game of Thrones author said speculation about his health and death was 'offensive'
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
The new film will be shot in the same studios as the Harry Potter films

books
Arts and Entertainment
Duncan Bannatyne left school at 15 and was still penniless at 29

Bannatyne leaves Dragon's Den

TV
Arts and Entertainment
The French economist Thomas Piketty wrote that global inequality has worsened

books
Arts and Entertainment
David Tennant and Benedict Cumberbatch

TV
Arts and Entertainment
Ben Affleck plays a despondent Nick Dunne in David Fincher's 'Gone Girl'

film
Arts and Entertainment
Pete Doherty (L) and Carl Barât look at the scene as people begin to be crushed

music
Arts and Entertainment

tv
Arts and Entertainment
Pete Doherty and Caral Barat of The Libertines performs on stage at British Summer Time Festival at Hyde Park

music
Arts and Entertainment
Ariana Grande and Iggy Azalea perform on stage at the Billboard Music Awards 2014

music
Arts and Entertainment

theatre
Arts and Entertainment
Zina Saro-Wiwa

art
Arts and Entertainment
All-new couples 'Come Dine With Me'

TV
Arts and Entertainment

TV
Arts and Entertainment

TV
Arts and Entertainment
Black Sabbath's Ozzy Osbourne
musicReview: BST Hyde Park, London
Arts and Entertainment
Ed Gamble and Amy Hoggart star in Almost Royal burning bright productions
tvTV comedy following British ‘aristos’ is accused of mocking the trusting nature of Americans
Arts and Entertainment
Sassoon threw his Military Cross into the Mersey
booksAn early draft of ‘Atrocities’ shows the anti-war sentiment was toned down before publication
Arts and Entertainment
Actors and technicians on the march against changes made by Hollande
theatreOpening performances of the Avignon theatre festival cancelled as actors and technicians walk out
Arts and Entertainment
Kanye West performed in a chain mail mask at Wireless Festival in Finsbury Park
Rapper booed at Wireless over bizarre rant
Arts and Entertainment

They're back, they're big – and they're still spectacularly boring

film
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
    Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

    Hollywood targets Asian audiences

    The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
    Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

    Grindr founder Joel Simkhai: 'I've found love on my dating app'

    Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
    Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

    Is it time to ditch autocorrect?

    Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
    10 best girls' summer dresses

    Frock chick: 10 best girls' summer dresses

    Get them ready for the holidays with these cool and pretty options 
    Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

    Westminster’s dark secret

    Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
    A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

    A History of the First World War in 100 Moments

    Dulce et decorum est: a life cut short for a poet whose work achieved immortality
    Google tells popular music website to censor album cover art in 'sexually explicit content' ban

    Naked censorship?

    The strange case of Google, the music website and the nudity take-down requests
    Howzat! 8 best cricket bats

    Howzat! 8 best cricket bats

    As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
    Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

    David Luiz falls from leader figure to symbol of national humiliation

    Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil