Lloyd's members lose £1bn court action

Former Lloyd's of London investors have lost a lawsuit over the alleged misregulation of the insurance market and failed to win £1bn of compensation from the UK Government.

The High Court in London yesterday dismissed a class action-style claim brought against the Treasury by about 1,1000 wealthy individuals, known as Lloyd's Names, who backed the insurance market's underwriting activities. They sued the Government for inadequate regulation of the insurance industry after their investments were wiped out in the 1990s and early 2000s. At the time, the Treasury acted as the market's watchdog before passing the baton to the FSA.

The High Court judge, Justice Gordon Langley, ruled that the Names did not have the right under an EU directive on insurance to sue the Government in a class action and that their claim for compensation had expired.

The Treasury welcomed the High Court ruling and said it would seek to recover as much as it could of its legal costs, which it estimated at about £2m, from the Names. They include the Conservative politician Dominic Grieve, who is the shadow Attorney General. Lawyers for the investors said they may appeal against the judgment.