Allegations of fraud against Lloyd's of London were this morning rejected by the High Court in London...Allegations of fraud against Lloyd's of London were this morning rejected by the High Court in London.
The allegations examined during the case, known as the Jaffray case after the Name Sir William Jaffray, were made by a small number of Names and relate to the period 1978-88.
Judge Mr Justice Cresswell said that there had been no fraud or misrepresentation by Lloyd's and that members of the Committee of Lloyd's, against whom the allegations had been made, had at all times acted honestly.
He added that he found certain witnesses for the Names and aspects of their evidence "unsatisfactory".
In response to the ruling Lloyd's chairman Max Taylor said: "This is a landmark decision that closes a distant and troubled chapter in Lloyd's history. With the case behind us we can get on with the business of running the world's foremost specialist insurance market.
"For five months during the trial, the Names were given every opportunity to air their grievances in court. It has been thorough, lengthy and exhaustive process culminating in the judgement we were always confident we would receive.
"Allegations that have been made on and off for a decade by disgruntled Names have been utterly disproved. The judge made it very clear from the beginning that this would be the last opportunity for Names to raise these allegations. The terms of this judgement mean that the Human Rights Act issue being raised by the Names are completely irrelevant to this case."
For most of the Names involved, the action was a counter claim to Lloyd's own proceedings against them for debt recovery relating to the 1996 restructuring of Lloyd's following losses of £8.1bn sustained during the years of 1988-92. These included disasters such as the Exxon Valdez oil spill, the destruction of the Piper Alpha oil rig and US asbestosis claims.
At the time 95% of Names accepted Lloyd's settlement offer to cap any future losses they might suffer through a new Government approved reinsurance programme, Equitas.
As part of the settlement Names were required to pay a premium to Lloyd's to reinsure their liabilities. The UK courts decided those who rejected this settlement could have their debts registered against them which Lloyd's could enforce.
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