Lloyd's to hunt for assets abroad: Middleton reveals tough line on collecting pounds 1.3bn of outstanding debts

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The Independent Online
THE Lloyd's insurance market is to search out assets hidden abroad by members as part of a tough new line on collecting pounds 1.3bn of outstanding debts.

Peter Middleton, chief executive, confirmed a new debt collecting committee would be set up, chaired by Bernard Bradford, former head of debt recovery at National Westminster Bank.

Mr Bradford's job at the bank was to chase up bad debts owed by failed companies, and he was renowned for his expertise at finding assets hidden abroad.

The committee will oversee a new financial recovery department headed by Philip Holden, a partner in Dibb Lupton Broomhead, the solicitors. A former Rugby league player, he is a specialist in locating hidden assets, for which he earned the nickname 'the Rottweiler.'

Mr Middleton made clear that one of the reasons for bringing in outside professionals to collect debts was that they had experience of finding hidden assets. This was the first time Lloyd's had encountered the problem, he said.

As part of a comprehensive reorganisation of the way Lloyd's deals with members - or names - who fail to pay up, the unpopular hardship committee, chaired by Lady Archer, is to be wound up.

But she is to be a member of the new committee chaired by Mr Bradford. David Rowland, chairman of Lloyd's, said the hardship procedure would be kept as it was, but applicants would be referred by the new committee.

Mr Rowland said there was an element of distaste and even horror for many names in dealing with something called a hardship committee. The aim was to make it easier to negotiate without commitment to the hardship procedure, which ties names down for life.

But there was concern that professional debt collectors would frighten elderly members and put on pressure to get a deal.

Tom Benyon, director of the Society of Names, asked for assurances that this would not happen. Mr Middleton said: 'It would be unforgiveable if there were any evidence of people knocking down doors and terrifying old women.'

Mr Rowland said debt recovery would be supervised very carefully and there was no intention of putting bailiffs in. Payment for debt collection would be by flat fees with no incentive arrangements.

Asked what sanction Lloyd's had if members refused to negotiate, Mr Rowland said: 'Ultimately we might have to take action in court.'

He also said names who were suing their agents for damages remained liable to pay in the meantime.

The pounds 1.3bn represents cash calls on members that have not been paid. It has fallen by pounds 1bn since June but most of the inflow is from names continuing to underwrite.

The balance is likely to be from names no longer underwriting, of whom there are about 14,000.

Lloyd's also said corporate members would be allowed to own up to 25 per cent of managing agents and it was looking at how they could go to 100 per cent.