Lloyd's names warned of legal action 'boomerang'

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NAMES on Gooda Walker syndicates, among the worst affected by losses at Lloyd's, will be caught by a 'boomerang effect' if they carry out their threat to sue, the insurance market's errors and omissions underwriters said yesterday.

Some of the Gooda Walker syndicates that insured against the natural catastrophes of 1989 also underwrote syndicates that were insuring members' agents against damages claims.

So if Lloyd's names win in court they will have to pay up through the agents' insurance, anyway. They would 'feel much more pain than they currently feel', said the steering committee in a document released by David Rowland, chairman of Lloyd's. He said the underwriters were concerned that names had not had a clear description of the true situation.

The Lloyd's Names Association Working Party called the release of the document a last-ditch attempt to rescue a settlement offer rejected by the membership of all but one of the names' action groups.

The Macmillan action group also said Lloyd's had admitted that the revised settlement offer to its members was wrongly calculated.