Lang sues Lloyd's for pounds 1m loss

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The Independent Online
THE President of the Board of Trade, Ian Lang, goes to the High Court this week to sue the troubled Lloyd's of London insurance market over personal and family losses estimated at almost pounds 1m.

Mr Lang, whose department has supervisory control over Lloyd's, joins more than 1,000 other "Names", including a clutch of Conservative MPs, in the latest of a series of cases that threatens the future of the 300- year-old market.

All were members of the Rose Thomson Young (RTY) Lloyd's syndicate, which lost up to pounds 428m on the Piper Alpha oil rig, Exxon Valdez oil spill and other catastrophes because of alleged negligence on the part of underwriters and Lloyd's agents.

Other Tory politicians involved include Sir Richard Body, now president of the Names' action group, "cash-for-questions" MP David Tredinnick, and Lords spokesman the Earl of Arran. "We believe we have a strong case because we have been the victims of gross negligence in the way underwriting was conducted," the RTY action group chairman, Ian Chalk,said.

In July, to avoid conflicts of interest, Mr Lang delegated responsibility for Lloyd's to his junior minister, Anthony Nelson, but the case will still embarass the Government because the DTI is Lloyd's ultimate regulator. Leading Lloyd's members also allege a conspiracy of silence between the market and the DTI in the1980s over huge asbestos liabilities that ruined thousands of Names.

On Friday, former broker John Donner issued a writ against nine top officials, including three former Lloyd's chairmen, alleging deliberate concealment of asbestos losses. Names are also understood to be building a dossier for possible future action against the market and DTI themselves.

Altogether 51 Conservative MPs are thought to have suffered losses at Lloyd's, many without Mr Lang's family fortune behind them. Unlike other Names, none has been made bankrupt, fuelling suspicion of secret understandings to preserve the Tory majority:a bankrupt MP may not serve in the Commons. Lloyd's dismisses all the allegations as "conspiracy theories".

Mr Lang's individual losses are estimated at up to pounds 835,000 on the basis of his participation in nine open syndicates, where losses continue to roll in. He worked as a Lloyd's underwriter and was once an RTY director. Losses by Tory politicians on RTY are estimated at pounds 1.85m, out of a possible pounds 20m plus for all MPs across the market.

Lloyd's racked up total losses of pounds 8bn from 1987-1992 and a pounds 5.9bn survival plan is currently stalled amid lawsuits and market squabbles.

Courts have granted awards of up to pounds 1.64bn so far over negligence by Lloyd's agents and auditors, threatening the rescue as key contributors balk at stumping up money while lawsuits go on.

Any eventual deal would have to be sanctioned by Mr Lang's Department of Trade and Industry, which is responsible for Lloyd's solvency and has allowed it to scrape through so far, despite the huge losses.

"We believe there's a deal between Lloyd's and the DTI that they won't bring the Government down through bankruptcies and the DTI won't bring Lloyd's down," said one Name.

Mr Lang was on a visit to the US last week and not available to comment.

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