Current Law Cases

Scope	Lloyd's; discharge of members' obligations; whether entitled to reimbursement
Case	Society of Lloyd's v Clementson (No.1)
Court	(QBD) Queens Bench Division
Jurisdiction	UKEW
Judgment	December 16, 1993
Judges	Saville, J.
Legislation	Lloyd's Act 1982 s.14; Supply of Goods and Services Act 1982 (c.29) s.13; Treaty of Rome 1957 Art.85
Reported
Reference	Times, January 11, 1994
Abstract	L sought reimbursement from C and M, members of Lloyd's, whose underwriting liabilities they had discharged from the central fund. Preliminary issues which arose included the nature of the agreement between L and its members, whether there was a duty under s.13 of the Supply of Goods and Services Act 1982 whether L was guilty of anti competitive practices under the Treaty of Rome 1957 Art.85 and whether immunity under the Lloyd's Act 1982 s.14 distorted competition. Held, L was entitled to reimbursement from members who had failed to meet their underwriting commitments. The general undertaking between L and its members ensured that members were bound by the society's rules. The agreement was a contract into which no further rights and obligations could be implied. L, moreover, did not supply a service within the meaning of the Supply of Goods and Services Act 1982. In discharging the obligations of its members L did not engage in economic activity, nor was the claim for reimbursement likely to distort competition contrary to Art.85. As far as L's regulatory responsibilities were concerned, s.14 of the Lloyd's Act 1982 provided L with a measure of immunity, the absence of which would distort competition rather than otherwise.
Subject	Insurance
Keywords	Insurance, Competition law, Liability, Lloyds, Names
Counsel	For L; V V Veeder Q.C. and Peter Duffy. For C; Michael Burton Q.C., Paul Griffin and Nicholas Green. For M; Anthony Hooper Q.C., Craig Orr and Nicholas Green
Solicitors	For L; John Mallinson; For C; S J Berwin & Co. For M; Michael Freeman & Co
Joined cases	Society of Lloyd's v Mason