Lloyd's poised to defeat names in High Court 'refusenik' case

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The Independent Online
Lloyd's of London looks poised to win a critical High Court battle with over 600 "refusenik" names who owe the insurance market pounds 130m. Victory in a 10-month legal struggle would allow Lloyd's to proceed against names and then pay off a big part of an expensive pounds 300m loan facility. A final two-day hearing starts this morning with judgment expected by the end of next week.

The 616 names, individuals who traditionally invested in Lloyd's, have refused to provide cash owed to Equitas, the pounds 11.7bn reinsurance vehicle created by Lloyd's to take on the market's pre-1992 losses. They are part of a wider but dwindling group of investors who have refused to pay. A Lloyd's victory would effectively mean the end of mass resistance in the UK.

They allege they were defrauded because Lloyd's recruited them into the market in the early 1980s without warning that huge losses from asbestosis were about to hit insurance profits.

A spokesman for Lloyd's was optimistic about the chances of success. "We have an excellent case. The only thing that would prevent a victory is if the defendants can prove there is an error in the documents which calculate the amount each name must pay. We are sure they will not."

Even high-profile defendants such as John Pascoe admit that defeat looks likely. Last night he said: "I will not be able to pay anything like the pounds 500,000 Lloyd's claims I owe them and how would I ever be able to afford pounds 6m to launch a fraud suit? Names have been totally shafted by Equitas and the current judicial process."

In another twist, the defendants are expected to argue that Mr Justice Tuckey is compromised because his brother in law Jeremy Hardie, chairman of WH Smith, was active in Lloyd's for many years.