The time has come for the pipe of peace at Lloyd's

"With peace breaking out even potentially liable auditors are trying hard to clamber aboard the settlement wagon, rather than face years of litigation".
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The Independent Online
It is looking increasingly as if Lloyd's really is going to pull it off. The deal taking shape is still in its infancy, and its complexity is enough to cause the shakes. But, behind the scenes, there are numerous signs that important pieces of the settlement and rescue package are moving into place. Far more revealing than the upbeat talk from Lloyd's management, which must always carry an extra burden of proof, are signs of a significant shift in thinking among the leading litigating names.

They, too, appear to be driven now by the realisation that a settlement needs to be achieved or everyone will be worse off. Yesterday's meeting between the five biggest members' action groups, seeking a mandate to negotiate a settlement on behalf of all aggrieved investors, could be something of a watershed. With legal fees threatening to cost pounds 1m a week once the litigation juggernaut really starts rolling, the offer of a once and for all cap on past liabilities begins to become relatively attractive.

That being said, there is still clearly a way to go. Most action groups are still determined to obtain a much better balance in the pounds 2.8bn debt forgiveness and compensation package on offer, notably from the Lloyd's professionals, who so far appear to have got off lightly. Work has also yet to begin on one of the most difficult issues of all - division of the spoils. But there seems this time to be a real desire and will to overcome the obstacles. With peace breaking out even potentially liable auditors are trying hard to clamber aboard the settlement wagon, rather than face years of litigation. The Lord Chancellor's Office too is firmly pressing for an end to litigation. With 16 cases pending, Lloyd's is threathening to clog up the courts for years to come.

It would be unrealistic to expect that everyone will be willing, come the day, to reach for the peace pipe. If the five big chiefs do finally lead their followers into the reservation, there will no doubt be some aggrieved braves, perhaps led by Christopher "Crazy Horse" Stockwell, still holding out in the hills. But history, as we know, was not kind to them.

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