Law Report: Lloyd's names' actions can proceed: Arbuthnott and others v Feltrim and others; Deeny and others v Gooda Walker Ltd and others - Court of Appeal (Sir Thomas Bingham, Master of the Rolls, Lord Justice Steyn and Lord Justice Hoffmann), 30 July 1993
The Court of Appeal dismissed appeals by the agents of Lloyd's names against Mr Justice Saville's decision on an issue of construction arising from the agreements between the names and the agents.
The plaintiffs, Lloyd's names, claimed damages against their agents for breach of contract in the conduct of underwriting for four syndicates. The names and agents were parties to a standard agency agreement. The agents claimed that clause 9 of the agreement precluded a name from bringing an action when the damages sought related to a cash requirement made on the name for underwriting liabilities which had not been met.
Bernard Eder QC and David Foxton; Bernard Eder QC and Simon Bryan (Elborne Mitchell) for the appellant agents; Anthony Boswood Qc and Stephen Moriarty (Richards Butler) for the names in the first action; Jonathan Mance QC and David Lord (Wilde Sapte) for the names in the second action.
SIR THOMAS BINGHAM MR said the scheme of the clause was clear and sensible. The duty of the name to pay sums required by the agent without prevarication was stated clearly. That reflected the overriding need to ensure that funds were available for prompt settlement of the claims of those who had insured or reinsured at Lloyd's. But that need did not require that names should forgo all rights to complain of negligent underwriting where there were still calls outstanding and unpaid.
Courts would never construe words in a vacuum. To seek to construe any instrument in ignorance or disregard of the circumstances which gave rise to it or the situation in which it was expected to take effect was pedantic, sterile and productive of error. Construction was a composite exercise, neither uncompromisingly literal nor unswervingly purposive: the instrument must speak for itself, but it must do so in situ and not be transported to the laboratory for microscopic analysis.
Lord Justice Steyn, agreeing, said that the agents' interpretation led to the extraordinary result that if the agent ruined a name by negligent underwriting, so that the name could not pay the cash call, the contract breaker or tortfeasor went scot-free. That result was inimical to the interest of policyholders and the Lloyd's market.
Lord Justice Hoffmann also concurred.
Ying Hui Tan, Barrister
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Professional big game hunter Ian Gibson crushed to death by elephant during hunt
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
Migrants crossing the Mediterranean: Pope Francis joins calls for EU action on boat refugees
Yemen crisis: Meet the child soldiers who have forsaken books for Kalashnikovs
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Isis in Afghanistan: Group claims responsibility for Jalalabad suicide bombing that killed 35
The only black face in the Ukip manifesto is on the page about overseas aid
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...
£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...
£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...
£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...