A Name loses game, set but not yet match: Buster Mottram, former British tennis star, on the frustrations of being in a loss-making Lloyd's syndicate

Share
Related Topics
I am surprised that the Lloyd's AGM did not break out into a brawl. Only effective stage-management by Lloyd's prevented this - it seems the only thing they can regulate. All the ingredients were there for a bust-up to happen: anger, desperation and, more importantly, the belief held by many Names that we are victims of negligence, possible fraud and a conspiracy by the working Names to rip off the outsiders.

Dispassionate analysis of the facts would appear to bear this out. As a ruined Name myself, my feelings fluctuate daily between worry for the future and the desire for recompense from those who have caused these problems. I have been in flux for a couple of years now; it is like living in a permanent state of bereavement. Almost weekly I receive correspondence about something or other to do with Lloyd's. Most of it is standard information circulars or notification from one of the many action groups I am involved in.

Sometimes I get letters from the Names' agent, threatening dire consequences and legal action if the money is not forthcoming. In the same breath, with the utmost consideration, the agency informs me that there will be nothing to worry about if I come to an accommodation with Lloyd's. How thoughtful of them.

Dealing with all this correspondence is exhausting and time-consuming. I have lost count of the hundreds of letters that I have written to action group secretaries, lawyers, accountants and agents, as well as the thousands (this is no exaggeration) of telephone calls made. And, of course, with every letter that I write, there is the inevitable response that needs filing, cross-referencing and in some cases replying to.

These bureaucratic demands on their own are just about endurable, though they would test the patience of Job. It is the sense of hopelessness and guilt that is so destructive. One mulls over in one's mind the stupidity of ever getting involved with Lloyd's. The sense of demoralisation is compounded by smug comments made by Names not in this plight and others who are not members at all, yet profess to have rejected the opportunity of joining due to their foresight and objection to unlimited liability. Schadenfreude?

These complacent sentiments really get you down. The 'I told you so' syndrome and comments such as 'You were aware of the risk you were running' only make one feel worse, while suggesting that they were either very smart or extremely lucky. I have lost count of the times I have said to people that unlimited liability was explained to me by my agent as theoretical: 'Like a meteor hitting London - an act of God, nothing more serious than that.'

I was introduced to my agent, Kingsley Underwriting Agencies (now renamed Lime Street Underwriting Agencies) by a member of Wimbledon, as many of my tennis compatriots were. In 1983, the man buttonholed me in one of the bathrooms after I played my match at Wimbledon, and proceeded to explain the benefits of membership. Human nature being what it is, with that lure of apparent easy money, one became mesmerised by the Lloyd's myth and sought to know more about it.

He then took me up to Lloyd's to meet Mr Robin Kingsley (another Wimbledon member) and chairman of Kingsley Underwriting Agencies. His agency has now gone into bankruptcy (I believe that this was the only Names' agency to do so). Its affairs are in the hands of receivers, who are scrutinising his conduct and that of his directors.

Only time will tell if the Names are liable under their underwriting agreements to pay the policy holders if negligence is proven. Lloyd's would have you believe that is the case and that the Names are responsible for the residue of the losses beyond the errors and omissions cover. Well, they would say that, wouldn't they? Perhaps, as with the 'pay now, sue later' provisions of the underwriting agreement, the commercial court will overrule Lloyd's in this regard, too. But if the Names directly on these syndicates aren't responsible for the losses, who is?

There have been rumours of a 'market solution' to alleviate the misery of the worst-hit Names, but nothing serious has been put forward. The Lloyd's business plan introduced recently sets out a completely new strategy for the organisation but does not address these problems. Implicit in it is an admission of its failure as a regulator and that it has permitted its Names to be ripped off by 'wide boys' and the negligent. According to the plan: 'Lloyd's current problems are in large measure self-

inflicted - underwriting standards for some syndicates were too low for too long . . . Members have been rightly critical of our performance . . . Market practitioners must not profit at the expense of the society as a whole.'

Ninety-five per cent of the 'catastrophe losses' affecting Lloyd's in 1988 fell on 12 syndicates and, in 1989, 79 per cent fell on 14, according to the Walker Report on Lloyd's organisation. I, unfortunately, am in several of them. Sir Patrick Neill, who investigated the ill-fated Feltrum Syndicates, summed it up in his report in October 1992, when he stated that 'the reinsurance spiral operated in the event of a catastrophe so as to negate the basic principle of insurance, which is a spreading and sharing of risk, and instead focused the losses on to a few.'

Mr Justice Saville, the high court judge in charge of the commercial court, went one step further, questioning whether the spiral was insurance at all. Underwriters, despite being warned as far back as April 1988 about the time-bomb ticking beneath them in the event of a catastrophe, continued to reinsure themselves with one another, creating a massive spiral in the event of a disaster. Will this be judged by the courts to be a violation of agents' fiduciary care under the underwriting agreement to their Names?

Lloyd's do not even claim any defence in this matter; they negated their regulatory role. Remarks made in the Lloyd's business plan and various reports confirm what had been suspected and alleged for a long time, that Lloyd's had failed in its duty of regulation. Yet they do nothing to put right the wrongs of the past. No wonder one resorts to litigation as the only method of breaking this impasse. I understand now what Ian Hay Davison (deputy chairman and chief executive of Lloyd's from 1983 to 1986) means when he stated that he found it wasn't a case of just one rotten apple in a barrel at Lloyd's but that the whole barrel was tainted.

I have learnt that there are many irregularities, a lot of deceit, secrecy and insider dealing in the Lloyd's market. How else can one explain the more favourable position that working Names have enjoyed over the external Names over a 10-year period? I would advise anyone considering joining to think again.

(Photograph omitted)

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Account Manager

£20000 - £35000 per annum: Recruitment Genius: This full service social media ...

Recruitment Genius: Data Analyst - Online Marketing

£24000 - £35000 per annum: Recruitment Genius: We are 'Changemakers in retail'...

Austen Lloyd: Senior Residential Conveyancer

Very Competitive: Austen Lloyd: Senior Conveyancer - South West We are see...

Austen Lloyd: Residential / Commercial Property Solicitor

Excellent Salary: Austen Lloyd: DORSET MARKET TOWN - SENIOR PROPERTY SOLICITOR...

Day In a Page

Read Next
 

Letter from the Deputy Editor: i’s Review of the Year

Andrew Webster
RIP Voicemail?  

Voicemail has got me out of some tight corners, so let's not abandon it

Simon Kelner
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all