The angry members crowded into the Royal Geographical Society's hall in Kensington, London, yesterday to hear legal advice from Anthony Boswood QC, the barrister who gained a pounds 116m out- of-court settlement for members of Lloyd's on another troubled syndicate.
In a 50-page legal opinion, Mr Boswood criticised the financial assumptions made by Merrett Underwriting Agency Management, the group looking after syndicate 418, into which the stricken Lloyd's members were grouped. He was also critical of the differing types of treatment that numerous underwriting members received as they participated in the syndicate.
Mr Boswood said that there would be a good case for legal action against the Merrett agency and other agents who introduced members to the syndicate.
Mr Boswood was equally critical of the former Ernst & Whinney, the accountancy firm, which gave an opinion that the accounts of the Merrett syndicate gave a 'true and fair view'.
The losses have arisen on 11 run-off reinsurance contracts, designed to assume the liabilities of other Lloyd's syndicates.
The 11 Merrett contracts largely took on liabilities arising from asbestosis and pollution damage risks.
Mr Boswood suggested there was evidence to show that the Lloyd's authorities were concerned about the level of asbestosis liabilities in the early 1980s but did not encourage adequate reserving at the time in order not to cause panic in the market.