21/09/03 - Business section
Names feud could wreck £30bn claim
Lisa Buckingham, Mail on Sunday
THEY have lost more money than most people see in a lifetime. They have spent years in gruelling court cases seeking billions of pounds in compensation.
But now the Names - former investors in the Lloyd's of London insurance market - have started to turn on each other.
As MEPs in Brussels this week step up the pressure on the European Commission for details of the British Government's alleged failure to regulate Lloyd's properly, localised spats between the Names have erupted into all-out war.
The Names, who operate through a bewildering array of action groups, are at loggerheads about the best way to seek compensation. If successful, this could reach an astonishing £30 billion, according to some estimates.
Together with his supporters, John Pascoe, now bankrupted because of his Lloyd's debts, has been pressing the EC to rule that Britain failed to regulate the market in accordance with European insurance directives.
Such a judgment, he argues, could open the way for the Names to return to court in the UK to seek compensation.
He has produced crucial documents showing that auditors at Lloyd's admitted they could not arrive at the legally required 'true and fair view' of the finances of the market during the Eighties and early Nineties.
This was because no one was able to hazard even a wild guess about how big the market's likely losses from asbestosis claims would be.
If the market was not properly audited, Pascoe argues, Names --who stood to lose everything --were recruited on false grounds.
Another Lloyd's campaigner, Christopher Stockwell, who followed other action groups to Brussels with a claim on behalf of his members, has, however, launched fresh legal action in Britain.
This suit, which he argues has gained ground after a recent case in which a judge said there had been fraud in the market in the Nineties, is now being used by Britain and Brussels to frustrate Pascoe's action.
On the one hand, Britain argues that Stockwell's writ is invalid because it has been lodged too late. However, it also claims that the writ means the whole issue is sub judice and therefore it should not be forced to reveal details of its regulation of Lloyd's, nor produce copies of its four-year correspondence with the EC.
The 1,100 Names in Stockwell's action group have each been charged £700 towards costs. They have also been told they will have to pay a further £1,000 if they want their names removed from the writ.
But a mystery player has now entered the battle. Using the pseudonym 'Madrid', this group is appealing to Stockwell's Names to come off the writ in an attempt to scupper the lawsuit.
Madrid has found an ingenious way for unhappy Names to pull out of the Stockwell action without having to pay the £1,000.
One person sympathetic to Pascoe's action said: 'Stockwell's writ is the stumbling block. He's persuaded people to sign up, even though a lot of them would immediately have to hand over any compensation to Lloyd's.'
Stockwell admits his Names are being targeted, but rejects suggestions that if he drops his writ the Government will compensate Names by Christmas as 'naive' and 'barking mad'.
Mad or not, the Names sense they are running out of time in their attempt to claw back their huge losses. The increasingly vicious battle between them shows every sign of becoming more bloody.