The House of Lords, dismissing an appeal, finally confirmed that members' agents are contractually liable for negligent underwriting by Lloyd's syndicates. And, in a separate action, the High Court ruled that agents are also liable if they place their names on inappropriate syndicates, involving greater risks than their clients anticipated.
Establishing these principles will give hope to many impoverished members of Lloyd's.
But it is not a let-off for the market as a whole. The assets of the members' agents themselves would scarcely make a dent in losses that run into billions. Most of the cash will have to come from the agents' errors and omissions insurance which, to a very large extent, is provided by Lloyd's insurance syndicates - and the names that belong to them.
Neither is it a let-off for the Gooda Walker names, who face enormous legal bills and a long and expensive fight to show they were the victims of negligence. Lawyers are still set to be among the biggest beneficiaries of the court actions. There was a lot wrong with the spurned compensation offer from Lloyd's, but it might yet be shown to have been the better path.Reuse content