Court rejects latest challenge to Lloyd's

Lloyd's of London yesterday fought off an eleventh hour legal challenge to the rescue plan for the troubled insurance market by embittered investors, writes Magnus Grimond. After just 15 minutes deliberation, Lord Justice Brooke threw out a case brought in the English High Court by the Paying Names Action Group for a judicial review of the recovery proposals. The group said the plan was unfair to those names who have continued to settle their debts to the market.

Lord Justice Brooke said he had no jurisdiction to entertain the case in public law and even if he had jurisdiction, he would have dismissed the case on grounds of delay and on grounds of merit.

"Lloyd's has not acted perversely or irrationally", the judge said, and he will give the reasons for his decision today. The judgment will come as a bitter blow to the group, which had to have the date of the hearing delayed from Monday in order to gather the money to mount the action.

The 33,500 names world-wide have until 28 August to accept or reject the recovery plan.

The judicial review was the last British legal hurdle facing Lloyd's ahead of the 28 August deadline by when all names world-wide must agree to the recovery plan. A lawyer at Warner Cranston, which has been acting for the group, said that it was too early to say what the action group would do next. Either side can appeal.