Lloyd's to seek deal on cases in pipeline: Ruling on negligence welcomed by names planning new lawsuits

LLOYD'S of London is expected to bring forward new proposals for an out-of-court settlement of all outstanding litigation following yesterday's landmark ruling that investors hit by the losses of the Gooda Walker syndicates were victims of negligence.

Michael Deeny, chairman of the Gooda Walker action group, said: 'It's a great day for Gooda Walker names. This judgment represents salvation for many.' Ian McClelland, another Gooda Walker name, said: 'There is no euphoria today. This has been about survival.'

Solicitors for the group estimated the names could be awarded more than pounds 500m when the damages are finally settled. The 3,096 names bringing the case had claimed pounds 629m, and the cumulative losses of the Gooda Walker syndicates had reached pounds 998m by the end of 1993.

Clyde & Co, solicitors acting for the insurers which will foot the bill, said their clients had not yet decided whether to appeal.

Mr Justice Phillips said the underwriters of the Gooda Walker syndicates had not carried out their duties competently. The names were entitled to losses they had suffered because the syndicates had inadequate reinsurance cover against big disasters such as the Piper Alpha oil-rig explosion.

The result was welcomed by other groups of Lloyd's names. The scale of the award, however, raised fears that the money available to compensate other names would be exhausted early.

Mr Deeny said: 'Other names should be encouraged because nobody has gone all the way to a judgment before.'

Lloyd's said it welcomed anything that clarified the situation for members.

The award of damages will be claimed from insurers providing 'errors and omissions', or professional liability, cover for the Lloyd's agencies defending the Gooda Walker action. Mr Deeny said details of the cover were confidential but he thought there would be enough available to meet most of the award. But Clyde & Co, for the liability insurers, said many agencies had 'no or insufficient insurance cover to respond to the awards now likely'.

The total amount of errors and omissions cover is estimated to be pounds 1bn. A second adverse judgment might absorb all that and more. A case brought by Feltrim names against their agents is due to begin on 17 October. If they win too, there would be little money left.

Many participants in the market believe the judgment will prompt another attempt by other aggrieved names to reach settlement with their insurers. A pounds 900m settlement offer put forward by Lloyd's last year was rejected as inadequate by names, but a clear judgment could allow the insurers to make a bigger offer.

Val Powell, chief executive of the Association of Lloyd's members, said the judgment made it clear there was no advantage to the E&O insurers in fighting more cases through the courts. 'The judgment gives enough leeway for everyone to negotiate,' he said.

John Alexander of accountants Pannell Kerr Forster, acting as liquidator for a number of members' agents, said he would have to consider settling with litigating names.

Charles Sturge, editor of Chatset, an independent Lloyd's analyst, thought a settlement would be in the interest of other names. He said: 'Names further down the queue should take a settlement as soon as possible.' Mr Deeny said the Gooda Walker action group intended to sue Littlejohn Frazer, the auditors of the syndicates, for more than pounds 100m. Any award in this suit would come from the auditors' separate professional liability insurers.

Christopher Messer, chairman of the Jansen Green names' action group, said he was not concerned about there being no money left for names in later cases. 'We will make a substantial claim against our auditors,' he said.

Another dispute is expected with Lloyd's when the names know the amount they will recover. Lloyd's is likely to claim that the money must be used to pay the Gooda Walker losses.

Names say they have already paid since Lloyd's has drawn down their deposits. Tom Benyon, chairman of the Society of Names, said: 'Why should the architects of the disaster have first snort at the trough?'

(Photograph omitted)

View From City Road, page 25

The judgment in detail, page 26

Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
Arts & Entertainment
Martin Freeman as Lester Nygaard in the TV adaptation of 'Fargo'
tv
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
VIDEO
Sport
Jonathan Trott will take a second break from cricket after suffering a repeat of the stress-related illness that forced him out of the Ashes tour of Australia
sport
Life & Style
life
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Arts & Entertainment
Ian Anderson, the leader of British rock band Jethro Tull, (right) and British guitar player Martin Barre (left) perform on stage
musicJethro Tull frontman leads ‘prog rock’ revival
Arts & Entertainment
Back in the suit: There are only so many variations you can spin on the lives or adventures of Peter Parker
filmReview: Almost every sequence and set-up in The Amazing Spider-Man 2 seems familiar from some earlier superhero film
Life & Style
Father and son: Michael Williams with son Edmund
lifeAs his son’s bar mitzvah approaches, CofE-raised Michael Williams describes the unexpected joys he’s experienced in learning about his family’s other faith
Sport
Gareth Bale dribbled from inside his own half and finished calmly late in the final to hand Real a 2-1 win at the Mestalla in Valencia
sport
Arts & Entertainment
Who laughs lass: Jenny Collier on stage
comedy... writes Jenny Collier, the comedian whose recent show was cancelled because there were 'too many women' on the bill
News
House proud: keeping up with the Joneses now extends to children's playhouses
newsLuxury playhouses now on the market for as much as £800
News
news
Life & Style
Stir it up: the writer gets a lichen masterclass from executive chef Vivek Singh of the Cinnamon restaurants
food + drinkLichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines
Extras
indybest
Arts & Entertainment
Ken Loach (left) and Mike Leigh who will be going head to head for one of cinema's most coveted prizes at this year's Cannes Film Festival
filmKen Loach and Mike Leigh to fight it out for the Palme d'Or
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Telesales & Sales Support Apprentice

£221.25 per week: QA Apprenticeships: This company is a well established Inter...

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit