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Lloyd's rejects inquiry

John Eisenhammer Financial Editor
Wednesday 06 September 1995 23:02 BST
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Financial Editor

Lloyd's of London yesterday dismissed demands for a full-scale independent inquiry into allegations of a cover-up within the insurance market of the massive scale of asbestos claims.

On the advice of Freshfields, the City law firm, Lloyd's said the substantial documentation provided by John Donner, a member of Lloyd's and a former members' agent, "failed to produce any material to substantiate or support his allegations and theories".

Mr Donner has for some time alleged that Lloyd's insiders in the late 1970s and early 1980s failed properly to disseminate to the market mounting evidence of the potentially devastating losses associated with asbestosis policies in the US. It is further alleged that unknowing new Names were recruited to Lloyd's syndicates carrying ruinous asbestosis liabilities in order to spread the loss burden.

Thousands of Names suffered huge losses, even bankruptcy, after a rush of asbetos claims in the US. An earlier inquiry in 1989 by four Lloyd's Council members found Mr Donner's initial submissions unsubstantiated. In response to new evidence, Lloyd's asked Freshfields to re-examine the allegations. The law firm's findings were supported by Gordon Pollock, a leading counsel.

"There is no evidence in Donner, and nor am I aware of any other information which could point to the conclusion of a conspiracy," said Sir Alan Hardcastle, chairman of Lloyd's self-regulatory body.

Mr Donner, however, said he "will continue to work to reveal the true responsibility for losses at Lloyd's".

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