Lloyd's agents set to appeal against Gooda Walker award

LLOYD'S of London agents have decided to appeal against a court judgment earlier this month in which more than 3,000 Gooda Walker names were awarded damages estimated at up to pounds 500m.

The appeal is to concentrate on the approach Mr Justice Phillips proposed for assessing the damages, according to Clyde & Co, the solicitors acting for the agents' errors and omissions insurers.

This suggests the agents are much more hopeful of reducing the scale of the damages than overturning the judge's decision that the agents acted negligently. Michael Clayton, a solicitor at Clyde, confirmed the emphasis would be on the amount to be paid.

The judgment did not put a figure on the damages but it gave detailed guidance on how to calculate the amount. The names said this could bring them pounds 500m - 80 per cent of the amount they claimed - but the agents believe the sum will be much lower.

The aggrieved names - members of the market - reacted angrily to the appeal.

Michael Deeny, chairman of the Gooda Walker action group, said: 'A three-month trial produced overwhelming evidence of gross negligence and Mr Justice Phillips gave an impeccable judgment in this case. There is certainly no prospect of our judgment being reversed on negligence.'

He warned that the agents and their insurers were taking a considerable risk in trying to reduce the damages award. The court was most likely to either maintain the approach of Mr Justice Phillips or to increase the damages, he said.

Mr Deeney also accused the agents and their insurers of a deplorable waste of the resources of Lloyd's syndicates, because spending further millions on legal fees neither helped ruined names nor the society as a whole. The appeal showed an 'irresponsible disregard for the best interest of Lloyd's'.

The names are to go to court next Friday for the next stage in the legal battles that still surround the judgment. They will be asking for a date to be set for a hearing of their request for an interim payment of damages, before the full amount is assessed.

As a result, the agents are to ask the court to determine whether they can claim any interim payment from their insurers, and to sort out technical points relating to interest payments and other matters.

The names are also facing an attempt by Lloyd's to change the market's trust deeds so that court damages will have to be used to cover debts to syndicates. This is expected to lead to another round of court actions.

Meanwhile, Colin Hook yesterday stepped down as chairman of the Feltrim action group - whose pounds 600m action against Lloyd's agents started this week - because he is to become managing director of Ivory & Sime, the Edinburgh fund managers. Damon de Laszlo is to take over the chairmanship.