Former Gooda Walker underwriter 'told to keep quiet': Court hears of pressure exerted to understate loss suffered by names

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The Independent Online
A FORMER Lloyd's underwriter told the High Court yesterday that senior colleagues in the Gooda Walker syndicates suggested he keep quiet about the scale of their losses in the late 1980s.

In an emotional outburst, Anthony Willard - underwriter for the Gooda Walker syndicate 299 until his resignation in the spring of 1989 - said: 'When anybody mentioned we must take the commercial decision, in my usual flippant way I would say, 'You mean lie'. That sort of thing did not go down well.' Mr Willard was giving evidence in the case brought by 3,095 names - investors in the Lloyd's insurance market - against their members' agents. These are the firms that placed them on the heavily loss-making Gooda Walker syndicates.

Mr Willard said Derek Walker, the senior Gooda Walker underwriter, had suggested he agree to a transfer of pounds 1m into syndicate 299 from another syndicate, to help 299 meet its expenses, without reporting the transaction to the auditors.

He said the conversation took place following the July 1988 Piper Alpha oil rig disaster, one of a series of catastrophes between 1988 and 1990 that brought huge losses. Syndicate 299 alone lost pounds 30m as a result of Piper Alpha.

Mr Willard said Anthony Gooda, chairman of Gooda Walker, asked him to write an 'upbeat' letter to his names early in 1989. 'I was not able to write a sufficiently optimistic letter for those names,' he said. Soon afterwards he resigned.

He told the court Mr Walker had been in charge of the underwriting. 'Mr Walker was the engine and Mr Gooda the bodywork.'

Mr Willard was also questioned by Geoffrey Vos QC, representing the names, about Stan Andrews, underwriter on Gooda Walker syndicate 298. Mr Willard said he had expressed doubts about Mr Andrews' business to Mr Gooda and Mr Walker several times in late 1988.

Mr Willard said he thought Mr Andrews could have misled the Gooda Walker board and the names about syndicate 298's level of losses following the Piper Alpha explosion.

The names are seeking pounds 629m damages from 71 members' agents who placed them with four Gooda Walker syndicates specialising in catastrophe reinsurance. The Gooda Walker syndicates' losses are estimated at about pounds 1bn.

The hearing is expected to last several more weeks.