(1) FREDERICK ENOCH PRICE (2) MARGARET ANN PRICE v SOCIETY OF LLOYD'S (1999) 

QBD Commercial Court (Colman J) 22/10/99 

INSURANCE - COMMERCIAL - FINANCIAL - TORT  LLOYD'S NAMES : R&R MARKET SETTLEMENT : EQUITAS REINSURANCE PREMIUM : FINALITY STATEMENTS : STATEMENTS OF ACCOUNT : QUANTUM : CALCULATION : MANIFEST ERROR : DEBT CREDIT : DUTY OF CARE : FAILURE TO CLOSE DOWN OR INTERVENE IN SYNDICATES : ERRORS AND OMISSIONS RISKS : SOLVENCY MARGINS : HARASSMENT : PROTECTION FROM HARASSMENT ACT 1997 : DOUBLE COUNTING 

The claimants had no real prospect of succeeding on their various challenges to the quantum of their respective finality statements as part of the Lloyd's R&R settlement agreement, and no real prospect of successfully defending the defendant's counterclaim for the amounts shown due on those statements. 

Applications by the claimants and the defendant arising out of the quantum of the claimants' respective finality statements and statements of account issued as part of the R&R market settlement. The claimants' principal allegation was that the amount of the Equitas reinsurance premium contained in those statements was overstated due to manifest error, but a number of other claims were also advanced. The defendant denied liability and counterclaimed for the amounts due under the statements. Each party applied for summary judgment on its own claim and an order for the summary dismissal of the claim of the other. The claimants' case as to manifest error was, in essence, that there was a clear disparity between the premium reduction applied to their syndicate as opposed to that applied to other syndicates, principally Feltrim and Gooda Walker, and that the only explanation for this disparity was manifest error. By clause 5.10 of the Equitas reinsurance contract the calculations as to the quantum of the reinsurance premium were to be conclusive, in the absence of manifest error. The claimants also alleged that: (i) they had not been given their "share" of the overall premium reduction in their debt credits; (ii) the defendant had failed in its duty of care to them by not closing down or intervening in their syndicates; (iii) the defendant had unjustifiably reduced their solvency margins in its calculation of liabilities for errors and omissions risks; and (iv) the defendant had committed the tort of harassment against the second claimant. 

HELD: The claimants were precluded from going behind the stated figures unless they could show an arguable case that the figures were obviously wrong. Society of Lloyd's v Fraser (1998) CLC 1630 considered. The claimants' case that something must have gone wrong with the reserve and premium calculations was exactly the area of investigation that clause 5.10 was designed to exclude. Their point was not arguable. The defendant did not owe the claimants the duty of care contended for.

Society of Lloyd's v Clementson (1994) TLR 16/11/94 established that there was no implied term in the membership contract that Lloyd's would exercise reasonable skill and care or act in good faith in relation to the regulation of the market. In any event, to make good a claim for damages for breach of contractual, common law or statutory duty, it was necessary to establish that Lloyd's acted in "bad faith" under s.14(3) Lloyd's Act 1982. The conduct of the defendant in trying to collect as much as possible of what it claimed was due from the second claimant as a Name bound by the R&R market settlement was not arguably calculated to cause her mental or physical harm either under the Protection from Harassment Act 1997 or at common law. Khorasandijan v Bush (1993) 3 WLR 476 considered. 

Action dismissed. Judgment for the defendant on the counterclaim. 

Frederick Price in person and for the second claimant. Mark Templeman and James Collins instructed by Lloyd's legal services department for the defendant. 

LTL 26/10/99 (Unreported elsewhere) 

Judgment Approved - 22 pages