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Lloyd's loses to 'radicals'

John Eisenhammer Financial Editor
Wednesday 17 April 1996 23:02 BST
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Lloyd's of London's hopes of putting off a court hearing that could seriously upset its settlement plans were dashed yesterday when Lord Justice Scott sided with radical names.

The hearing begins today and is expected to last until early next week, despite a concerted attempt by Lloyd's and moderate names to have the matter put off for fear it will disrupt the recovery plan negotiations in their crucial final stage.

The hearing centres on the legality of changes made by Lloyd's to so- called Premium Trust Deeds, which meant that any money won by litigating names would have to be used first to pay off all losses at the insurance society. Government approval for this change was given only on the condition that Lloyd's have its legality tested in the courts.

However, with the negotiations on the global settlement to Lloyd's problems fast nearing their deadline, and the recent news that the society has increased by pounds 300m its pounds 2.8bn offer to names, a deal was struck between the society and the majority of names' representatives to put off the legal test hearing. "There was a strong feeling among most names that we did not want anything that could unnecessarily jeopardise the settlement," a leading name said.

But radical names, some of whom are determined to scupper the settlement, reacted angrily, and argued to Lord Justice Scott that the hearing should proceed. Yesterday, he announced his agreement with that line of argument.

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