Writs add to battle over who foots Lloyd's bill

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The Independent Online
The latest squabbles over who ends up footing the bill for the £8bn losses at the Lloyd's insurance market hit the courts last week with the issue of two more writs.

In a potentially very large case, some Lloyd's underwriters are suing Carritt & Partners, the Lloyd's broker, for what they allege were acts of negligence, breach of duty and misrepresentation.

Carritt sold personal stop-loss policies to names on behalf of a group of 13 Lloyd's syndicates and London market companies.

These policies are designed to cover names, who have unlimited liability, in the event their losses at Lloyd's exceed pre-determined limits.

However, the Lloyd's underwriters claim that due to an oversight by the brokers the Lloyd's syndicates ended up with more of a share of the losses than they had anticipated.

Philip Hooley, a partner with the underwriters' solicitors, Clyde & Co, said: "The amounts involved are at least tens of millions of pounds and perhaps higher."

The case means that Lloyd's brokers are increasingly finding themselves as piggy in the middle in the Lloyd's saga as they find themselves sued over the losses from all sides. Just before Christmas the Gooda Walker Action Group issued writs against some of their brokers.

The second writ to be issued was by Alec Sharp, the leading underwriter on Lloyd's syndicate 839.

Last week's writ adds a list of 48 defendants to an existing action that is due before the Court of Appeal in March.

Mr Sharp was one of the underwriters who footed the bill for the £170m Outhwaite settlement in March 1992.

This settlement was reached after names had started legal action, claiming Mr Outhwaite had been negligent in his underwriting.

Mr Sharp's share of the bill was £7.3m.

The defendant insurers deny any liability to Mr Sharp, claiming that other insurers are liable instead.

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