Overview

 

A group of elderly people are being victimised because of failings by people in whom they placed their trust and whom betrayed them and refuses to admit responsibility, apologise, and remove charges from their homes.

In a Parliamentary Enquiry, The Honorable Diane Abbott MP said:

". . . if the gentlemen at Lloyd's were "East Enders" dealing in used cars, they would have been behind bars now for fraud, misrepresentation of assets and trading while insolvent."

In the 1980s, Lloyd's totally lost the plot and this led to massive losses. They tried to hide a very serious problem, while continuing to recruit new investors.

Lloyd's claim that there was a rigorous audit was a lie; in fact there was none at all.

Most investors were rescued after paying a substantial fee.

This petition concerns a small group of investors who lost so much that they could not afford to pay continuing demands for cash, and charges were taken over their homes, in my case, now more than £141,000.

Following a legal action by investors against Lloyd's, Judge Sir Peter Cresswell said: "The catalogue of failings and incompetence in the 1980s by underwriters, managing agents, members agents, and others (established by judgements of the court, by disciplinary hearings, and other means) is staggering. External Names were the innocent victims of the failings and incompetence"

Since £8 billion was lost solely by Lloyd's own incompetence, it is grossly unfair and shameful that they continue to demand money from investors, most of whom are now elderly. I believe that the charges on the homes of investors should be removed and written off and Lloyd's should apologise.

 

For More Information:

 

The Lloyd's of London File

http://www.time.com/time/europe/lloydsfile/index.html

 

Affidavit of Ian Hay Davison March 4, 2005:

http://www.truthaboutlloyds.com/litigation/Affidavit%20of%20Ian%20Hay%20Davison.htm

 

Affidavit of Roger Bradley:

http://groups.google.com/group/alt.lawyers/browse_thread/thread/264dd0b27b3a64bc

 

Lloyd's Of London Falling Down

http://www.time.com/time/magazine/article/0,9171,996199-1,00.html

 

 

 

 

 

More Detail Than You Can Shake A Stick At Below!

 

So What's It All About?

 

The Lloyd's of London insurance market wrote many policies insuring employers in the USA against injury to their workers. Many were exposed to asbestos, and when they became ill they sued. By 1980 there were so many claims that Lloyd's set up in secret an Asbestos Working Party. In 1982, accountants wrote to Lloyd's saying that putting a figure on claims for asbestos injury was "an impossibility". Syndicate accounts were not managed properly, resulting in large losses being passed on to new Names joining syndicates in later years, totally unaware of the certainty of massive losses; Lloyd's was actively recruiting new Names without telling them of the asbestos problem. Between 1989 and 1992, the market lost £8 billion and in the following years many Names lost many times their original investment.

A rescue was organised but to escape further losses Names had to pay a premium into the rescue vehicle, Equitas but about 1,000 Names, who could not afford to pay into Equitas, had to join a special scheme, Hardship. Instead of paying into Equitas, a charge was imposed on our homes, in my case currently more than £141,000. I began underwriting with capital of £100,000 and by 1994 my losses were more than £500,000!!!

 

The Jaffray Fraud Trial

In 2000, a group of Names sued Lloyd's, alleging fraud. The action failed, but in his judgement Judge Sir Peter Cresswell said: "The catalogue of failings and incompetence in the 1980s by underwriters, managing agents, members agents, and others (established by judgements of the court, by disciplinary hearings, and other means) is staggering. External Names were the innocent victims of the failings and incompetence"

Furthermore:

"The 'recruit to dilute' fraud allegations were heard at trial in 2000 in the case Sir William Jaffray & Others v. The Society of Lloyd's, and the appeal was heard in 2002. On each occasion the allegation that there had been a policy of 'recruit to dilute' was rejected: however, at first instance the judge described the Names as the innocent victims [...] of staggering incompetence and at appeal the Court found that representations that Lloyd's had a rigorous auditing system were false ([item 376 of the judgment:] [...] the answer to the question [...] whether there was in existence a rigorous system of auditing which involved the making of a reasonable estimate of outstanding liabilities, including unknown and unnoted losses, is no. Moreover, the answer would be no even if the word 'rigorous' were removed.) and strongly hinted that one of Lloyd's main witnesses, Murray Lawrence, a previous Chairman had lied in his testimony ([item 405 of the judgment:] We have serious reservations about the veracity of Mr Lawrence's evidence [...].)."

When the names appealed, the Court of Appeal went further, saying that there had been misrepresentation in the brochures sent to prospective Names. Lloyd's claimed to have an effective audit , when in fact there was none.

 

From the affidavit of Ian Hay Davison, Lloyd's Chief Executive, dated March 4th 2005:

 

"It seems to me that it was well known and understood at the time by Committee Members who had any involvement with asbestos syndicates that those syndicates were not reserving to ultimate. It follows that they must have known and understood that their accounts and hence the Lloyd's Global Accounts were not accurate and did not contain reasonable estimates of outstanding liabilities. They must have known and understood that at the time and therefore those figures and reserves were fraudulently calculated. I do not believe that this can be attributed to mere negligence. I am quite certain there has been a great deal of negligence at Lloyd's but the build-up of knowledge on the asbestos problem during the 1980s was clearly inexorable and in the wake of the Neville Russell and Murray Lawrence and Randall letters, which required a detailed and comprehensive regulatory response from Lloyd's that did not happen, I can only conclude that there was a deliberate agreement amongst certain key members of Lloyd's, including in particular Sir Peter Green and Murray Lawrence, to conceal from me and others the seriousness of the asbestos problem. If it was [*53] not a deliberate decision to exclude nominated and external members of council from full knowledge of the problem, there was certainly the turning of a blind eye to what we were not being made aware of and the inconsistencies between what was known about the defective/inadequate/non-existent audit system and the claims in the brochures sent to Names. The consequence was that the figures shown to joining and renewing Names from 1983 onwards were basically a fraudulent misrepresentation of the financial position of the syndicates and of Lloyd's. The dust jacket of my book says "when I joined Lloyd's I had announced my decision to pick out the rotten apples....but it was not as simple as that...the barrel itself appeared to many observers to be infected". That was my view in 1987, formed principally from my observations in relation to baby syndicates, rollers, and the appalling lack of understanding of agency obligations. Today I am certain that it was rotten to the core and that the losses that the Names suffered in the 1990s, whether from the cumulative build up of under reserving for asbestos, or through the participation in the Spiral Syndicates which so focussed Lloyd's losses, were the product of regulatory failure at Lloyd's as well as of the negligence and incompetence of particular agents. I believe much of that regulatory failure was due to deliberate concealment of known facts and information by, among others, Peter Green, Murray Lawrence, David Coleridge and others."

 

Berkshire Hathaway buys Equitas

National Indemnity, owned by Berkshire Hathaway, has bought the rescue vehicle Equitas in a novation, so the vast majority of Names ruined can now safely forget all about Lloyd's, in the secure knowledge that no further claims can be made against them. But the Hardship Names are still chained to Lloyd's with the worry of onerous charges on their homes.

The charges on the homes of Hardship Names arose solely because of incompetence and failings on the part of Lloyd's, its false claims to have an audit, and its failings as a regulator.

 

Conclusion

Although legal action for fraud failed, it would certainly have succeeded had the claim been for misrepresentation. Therefore, Lloyd's action in pursuing Names for alleged debt to the present day and maintaining charges on the homes of Hardship Names is morally wrong and deeply shameful. Lloyd's arrogance is reinforced because of its position as a major currency earner for Britain; hence no politician or journalist will support our cause. But writing off the charges would cost less than £100 million, compared with Lloyd's current Central Fund value of £3 billion.