Two Lloyd's of London Names, private investors in the insurance market who have been saddled with huge asbestos claims, have been given a reprieve from bankruptcy.
Heather Adams and Richard Carter were granted a stay on the bankruptcy orders from Lloyd's for debts totalling about £500,000 on Wednesday.
Mrs Adams and Mr Carter, who is 80 and still working after being wiped out by his Lloyd's losses, were left last week to face the bankruptcy courts, after losing a court battle over the debts. They failed to convince a High Court judge that Lloyd's was claiming arbitrary amounts from them that were riddled with errors.
However, because the pair are party to a lawsuit coming before the High Court in March, they have been allowed to escape bankruptcy for the time being. Mrs Adams and Mr Carter are part of a group of former Names that is suing Lloyd's for "misfeasance in public office", the same charge laid against the Bank of England for failing to prevent the collapse of BCCI. They claim Lloyd's, which is incorporated through its own Act of Parliament, did not govern itself properly. Bankruptcy laws allow someone who is party to another suit that could wipe out their debts a stay until the case is settled.
"We are tremendously relieved," Ken Adams, Mrs Adams' husband, said yesterday. "We can at least have some breathing space over Christmas."
At least 15 Names committed suicide in the 1990s in the face of their Lloyd's losses and a number have since been made bankrupt. The vast majority of Names reached a settlement with Lloyd's in 1996, but Mr Carter and Mrs Adams, who together have already paid about £750,000 to Lloyd's, said they could not afford any more.
Lloyd's has been successful in the UK courts so far in dismissing allegations of fraud and impropriety. A case is also being brought in Europe against the British Government, claiming it breached EU insurance laws over Lloyd's.Reuse content