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

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

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

Ashdown Group: Marketing Manager (B2B) - Romford - £40,000 + car

£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...

Ashdown Group: Helpdesk Analyst - Devon - £20,000

£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Day In a Page

Read Next
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month  

General Election 2015: Politics is the messy art of compromise, unpopular as it may be

David Blunkett
File: David Cameron offers a toast during a State Dinner in his honour March 14, 2012  

Vote Tory and you’re voting for the rich to get richer and the poor to get poorer

Mark Steel
General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'