Leaders of the five biggest Lloyd's action groups yesterday met representatives of all litigating members, seeking a breakthrough in efforts to support the rescue plan for the insurance market.
The five-man committee, representing 75 per cent of aggrieved members, is seeking a mandate to negotiate for all such members a final settlement to litigation and acceptance of a compensation plan.
Sources close to the talks said this indicated a new readiness among the main action groups to push the rescue plan forward towards a settlement. The committee of five - Michael Deeny, of the Gooda Walker group; Damon de Laszlo, of Feltrim; John Mays, of Merrett; Christopher Messer, of Janson Green; and Alan Porter, of Devonshire - have severed links with the umbrella group, the Lloyd's Names Association Working Party, chaired by Christopher Stockwell.
The split among names, and the attempt by the leading five to assert their leadership, suggests a growing realisation that a settlement needs to be reached, partly because of concerns about the escalating costs of litigation. There are also worries that should Lloyd's collapse next year, a real possibility without a settlement, members would suffer harshly at the hands of receivers.
Should the leading groups succeed in winning the mandate an important mechanism will be in place for negotiating the settlement part of the pounds 6bn recovery plan, sources said.
The mandate will be limited to negotiating the principle of the settlement. How the compensation package is eventually to be shared out will be individually negotiated between Lloyd's and the 50-plus members' action groups.
There are also indications that some auditors of loss-making syndicates are seeking to become part of a global out-of-court settlement. Action groups have said that even if they settle with Lloyd's, they will pursue auditors for negligence.
Senior partners of some auditing firms have made private overtures to be brought into negotiations. An eminent City personality has taken on the role of go-between with auditors and the leading action groups. Lloyd's management is also negotiating with the leading action groups about obtaining a sizeable contribution from the market's professionals - brokers, members' agents and managing agents - to an overall compensation package.
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