Gooda underwriter says he warned of significant losses: Counsel for Lloyd's names says risks were not made clear
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Your support makes all the difference.DEREK WALKER, a former Gooda Walker underwriter, told the High Court yesterday he had warned for many years that investors on his Lloyd's syndicate could make significant losses.
Mr Walker said he had told the members' agents responsible for placing names - the individual investors in Lloyd's - that losses on his syndicate 290 could reach 200 per cent of its capacity.
Geoffrey Vos, counsel for a group of Gooda Walker names claiming damages against their members' agents, suggested that Mr Walker had not made the possibility of huge losses clear.
Mr Vos read statements made under oath by four members' agents in a case recently won by another Gooda Walker name, Michael Sword-Daniels. They said Mr Walker had not issued a warning or mentioned the danger of 200 per cent losses before 1989, while an expert witness said members' agents never imagined such big losses were possible.
Syndicate 290's cumulative losses for 1989 reached 386 per cent of capacity, and total losses of seven Gooda Walker syndicates for 1988-90 were approaching pounds 1bn by the end of 1993.
Mr Vos also read a 1983 letter to names from Tony Gooda, chairman of Gooda Walker, which said the syndicates 'would not make them a fortune but would not lose them a fortune'.
Mr Walker said he had tried to protect a third of his syndicate's aggregate exposure by buying reinsurance. He agreed, under cross- examination, that this was not consistent with earlier statements he had made.
Mr Vos pointed out repeated references in the annual reports of syndicate 290 to the strength of the reinsurance programme. For example, in 1984 the accounts had said there was 'substantial cover to protect the syndicate against catastrophe'. In 1988 the report said losses from the October 1987 windstorm 'should be contained within our reinsurance'.
The case continues today. Mr Walker's testimony is expected to be followed by that of Stan Andrews, another former Gooda Walker underwriter.
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