Gooda Walker faces underwriter action

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LEGAL action is under consideration this weekend against former managers of the Gooda Walker Lloyd's underwriting agency, following publication of a critical 1,500-page internal report by the Lloyd's authorities on Friday, writes John Moore.

Any action will be launched on behalf of an action group representing nearly 3,000 underwriting members whose affairs were managed by Gooda Walker and who have been hit by pounds 700m worth of losses. Its solicitor, Wilde Sapte, is preparing a case for litigation against the agency's former managers and other companies in Lloyd's which introduced members to Gooda Walker.

Kieran Poynter, a partner with Price Waterhouse, was commissioned by Lloyd's last year to investigate the circumstances surrounding the exceptional losses at Gooda Walker. He concludes in the report that there was no evidence 'of impropriety of a dishonest nature' in the events leading to the losses.

He also says that 'Lloyd's had properly administered the relevant regulatory requirements relating to the Gooda group'.

The Poynter report is critical of the agency structure at Gooda Walker and aspects of its management, and the level of disclosure and risk assessment practice at Lloyd's.

However, the report dismisses allegations that there was a conspiracy between underwriters at Gooda Walker and insurance brokers, which brought business to the syndicates.

Underwriting members had alleged that business traded between one Gooda Walker insurance syndicate and another was designed to generate extra commission for the brokers and fees for the underwriters.