Lloyd's in new cash call: Gooda Walker members face demand for another pounds 157m despite SFO investigation

A NEW row erupted yesterday at Lloyd's of London as 3,000 underwriting members were told that they would have to pay a further pounds 157.7m from their private wealth to help meet the liabilities of a group of insurance syndicates currently under investigation by the Serious Fraud Office.

Underwriting members are also angry that the latest cash demand includes personal expenses of pounds 69.5m. These relate in part to foreign exchange losses on the settlement of insurance claims, an interest rate burden, and the delay in some members meeting the cash demands.

In the worst financial disaster to hit the insurance market, the 3,000 members, who include Paul Marland, Conservative MP for West Gloucestershire, Viscount Rothermere, the Earl of Carlisle and Lady Rona Delves Broughton, are to be asked to contribute from their own fortunes to help stricken insurance syndicates once managed by the Gooda Walker underwriting agency.

So far they have been required to pay pounds 553m, and only pounds 70m of that remains uncollected. The latest demand for cash by the caretaker underwriting agency, GW Run-Off, represents an additional amount.

Ken Randall, a director of GW Run-Off, warned yesterday that yet another pounds 145m would be required from members in order to meet the insurance claims falling on syndicates 164, 290, 295, 296, 298, 222, 1187, 299, 297, and 387 once managed by the Gooda Walker agency, which went into liquidation two years ago. Total losses of the syndicates total pounds 900m.

In April the Independent disclosed that Mr Randall had sent a detailed report into how the losses arose at Gooda Walker to the Serious Fraud Office, after he found evidence that past profits of some of the syndicates may have been 'significantly enhanced' by business transactions.

Michael Deeny, chairman of the Gooda Walker Action Group, which is seeking financial help for the members, said: 'It is absolutely scandalous for Lloyds's to try and extract pounds 157m from ruined names (the members) in a case under investigation by the Serious Fraud Office. This further demand is intolerable.'

Mr Randall said that his company, Randall Insurance Services, which is assisting in running off the liabilities of the Gooda Walker syndicates, is charging a total of pounds 275,000 for its services. Another group, City Run-Off, which is dealing with claims administration, has been charging pounds 600,000.

Mr Deeny is leading the biggest legal action in Lloyd's 305-year history, against companies operating in the market over the events that led to the losses.

He said: 'Our criticisms are aimed at the ruling council of Lloyd's, not at GW Run-Off. Our campaign is against Lloyd's'

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