Lloyd's settlement to benefit litigants
Tuesday 13 February 1996
Lloyd's of London plans to pay the bulk of its global settlement fund to those names who have caused it the most problems through litigation. Conceding that it had not been possible to be fair to all names, Lloyd's said yesterday that three-quarters of the pounds 2.8bn of debt forgiveness and credits will go to those who have fought hardest and been most successful in the courts.
There were also strong hints from senior Lloyd's insiders that the pounds 2.8bn pot of funds for helping names achieve the settlement could well be larger by the time the final individual bills are sent out in late May. Lloyd's is also keeping in reserve the option of taking out a loan in the market, based on future profits at the insurance market, which could be used significantly to increase the settlement fund. This would have the effect of sharply easing the payments many names must pay to end their liabilities at Lloyd's.
Names were quick to point out yesterday that the settlement fund in its current state is inadequate, and especially the pounds 800m of credits from the pounds 2.8bn that is specifically aimed at buying off litigation. "We do say, and we are absolutely categoric about this throughout the names action group community, that they must increase the pounds 800 litigation fund. As it stands it just cannot work," said John Mays, leader of the Merrett names action group and a member of the committee that has been advising Lloyd's on how to distribute the settlement funds among all the 34,000 names.
Names will be given at the beginning of next month the first estimates of their individual bills to Equitas, the giant re-insurance company being set up to take over all Lloyd's old, heavily loss-making policies. Under the settlement, they will be able to write a final cheque, covering all their liabilities, and walk away. The purpose of the pounds 2.8bn is to buy off litigation, and to reduce the cost for most names of achieving finality.
Under the principles of distribution unveiled yesterday, all of the pounds 800m will be reserved entirely for actively litigating names. Those who already have won judgements, such as names on the Gooda Walker action group, could expect to see around 35 per cent of their Equitas cost covered while those early on in the litigation process might receive only 10 per cent. Lloyd's said that any names who are professionals in the market, and responsible for "demonstrable misconduct", will be excluded from assistance.
Of the pounds 2bn debt forgiveness funds, a substantial amount will be directed towards the hardest hit names.
8 Between pounds 300 and pounds 500m is to relieve names who suffered disproportionately high losses
8Between pounds 200 and 300m is to reduce the cost of the Equitas bills.
8 Between pounds 1.1 and 1.3bn is being used to place a cap of pounds 100,000 on Equitas bills. Some 9,000 names face bills around this cap. Lloyd's said it hoped to establish a mechanism so that the debt credits went more to names who really need the money rather than names who have the means but had withheld payment in the past.
8 Finally, pounds 100 to 150m is to assist names who cannot pay their finality bill.
Under the current settlement offer, some 5,000 names will get money back; 16,000 will find their Equitas bill covered by the funds all names have deposited at Lloyd's. The final 35 per cent will need to find money up to the pounds 100,000 maximum.
- 1 Disney heiress Abigail disowns her share of family profits in West Bank company
- 2 The secret report that helps Israel hide facts
- 3 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 4 Israel's propaganda machine is finally starting to misfire
- 5 HSBC closes bank accounts belonging to Muslim clients in the UK
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Disney heiress Abigail disowns her share of family profits in West Bank company
'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
HSBC closes bank accounts belonging to Muslim clients in the UK
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...
£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...