Up to 300 underwriting members, whose affairs were managed directly by the Gooda Walker agency or Gooda and Partners, have submitted a statement of case to Lloyd's legal panel, headed by Sir Michael Kerr, in which they make a range of allegations against the Gooda Walker companies.
Operating through the Gooda Walker Direct Names Association, the members are seeking to have their contracts with the Gooda Walker agencies set aside. They are seeking damages.
Earlier this year Lloyd's set up its legal panel in an effort to reach a settlement with underwriting members who are suing hundreds of companies in the market over losses of pounds 5.5bn that have flooded into the community over the past three years. A further pounds 1bn worth of losses is expected to be reported next year.
In all 3,000 other underwriting members who were introduced to Gooda Walker through numerous other agencies face pounds 925m worth of losses. Some 2,144 underwriting members are suing the Gooda Walker agency and 66 companies operating at Lloyd's.
Last month the Serious Fraud Office launched a formal investigation into the affairs of Gooda Walker after receiving a report from caretaker managers of the agency which suggested that members had been lured to join insurance syndicates after profits had been massaged. The practice is alleged to have misled potential members.
Sir Michael Kerr and his legal panel are trying to resolve the legal dispute by attempting to make a settlement to the members based on the seriousness of their individual cases.
The money would come from errors and omissions insurers, which insure Lloyd's companies against suits for damages.
However, since errors and omissions insurers have only about pounds 690m at their disposal, many experts fear that members may get back as little as 10p in the pound to cover their losses.
Fernanda Herford, an actress who is leading the Gooda Walker Direct Names Association and has lost up to pounds 1m from her involvement with the agency, said that the association's case was generally recognised 'even at Lloyd's' to have great merit.
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