Lloyd's ultimatum

The Lloyd's of London insurance market is set to give squabbling brokers, agents and auditors a two week ultimatum to contribute up to pounds 500m more to a pounds 2.8bn compensation package to settle a rack of lawsuits with loss-making names.

The troubled market cleared a major hurdle to survival on Friday with provisional authorisation from the Department of Trade and Industry for its Equitas rescue plan.

Market sources say the deadline is now needed in order to complete computer processing for final liability statements to 34,000 names, which are due out by the end of May.

This weekend names, thousands of whom have been effectively bankrupted by pounds 8bn of losses from 1987-92, welcomed the DTI's move. But they warned Lloyd's would still have to come up with more than pounds 500m extra in compensation if action group members are to vote in Equitass' favour.

"Large groups of names are indicationg that the present settlement package is unacceptable. The worst hit names will have no hesitation in turning it down since they are better off continue litigating," said leading names representative Christopher Stockwell.

Mr Stockwell chairs the Lloyd's Names Associations' Working Party, an umbrella organisation for groups who have won a series of actions over negligence by Lloyd's agents and auditors.

The body sent out nearly 6,000 questionnaires canvassing opinion after Lloyd's sent out indicative statement of final bills for Equitas earlier this month. Around 50 per cent had replied and were nearly two to one against accepting the settlement as it stands, Mr Stockwell said.

Lloyd's is currently trying to secure a pounds 100m contribution from brokers, another pounds 200m from agents and pounds 200m from auditors to increase the compensation package.

Nicholas Verey of Lloyd's advisers Lazards is handling talks with the auditors, while Lloyd's chairman David Rowlands and chief executive Ron Sandler are liaising with agents and the London Insurance Brokers Committee.

"Everybody's playing poker, but the settlement can only increase. We know we can get pounds 2.8bn," a Lloyd's spokesman said. "But talk of up to pounds 4.5bn is not only unrealistic, it's stupid."

Mr Stockwell is currently proposing a 2 per cent levy on the future market to raise over pounds 4bn over 15 years, pounds 1bn of which could be released immediately to names.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones