Current Law Cases

 

Scope

Lloyd's; obligation to pay into Central Fund; Fund operations as decision of an association of undertakings; arrangements not competitive restriction between Member States

Case

Society of Lloyds v Clementson (No.3)

Court

(QBD (Comm Ct)) Commercial Court

Jurisdiction

 

Judgment

May 7, 1996

Judges

Saville, J.

Legislation

Treaty of Rome 1957 Art.85

Reported

[1997] L.R.L.R. 175; [1996] 5 Re L.R. 215; [1996] C.L.C. 1590

Reference

Times, May 14, 1996

Abstract

C, a Name at Lloyd's, was obliged by his agreement with Lloyd's to provide sums of money to the Central Fund. Lloyd's sued him under the terms of that agreement. C contended that the arrangements for the Central Fund and their by laws were contrary to the Treaty of Rome 1957 Art.85(2).

 

Held, giving judgment for Lloyd's and dismissing C's counterclaim that the conduct of insurance business fell within Art.85 of the EC Treaty. Lloyd's was an association of undertakings within Art.85 and its decisions as to the withdrawal of funds from the Central Fund were "decisions of an association of undertakings" within Art.85. The relevant markets were the worldwide marine, aviation and reinsurance markets. The Central Fund arrangements had not had a direct or indirect influence, whether actual or potential, on the pattern of trade between Member States. The Central Fund arrangements did not have as their purpose the restriction or distortion of competition between Member States. C's losses were not caused by any of the matters of which he complained.

Subject

Insurance

Keywords

Fraud, Letters of credit

Counsel

For C: Jeremy Lever Q.C. and Richard Slowe. For Lloyd's: Gordon Pollock Q.C., Paul Lasok Q.C. and Richard Jacobs

Solicitors

For C: SJ Berwin & Co. For Lloyd's: Freshfields

Cases cited