By Peter Chapman
MEPS are free to trigger an official inquiry into allegations that the Lloyd's of London insurance market lacked proper oversight for more than 20 years.
European Voice has learned that the European Parliament's legal service has advised a probe can go ahead - even though critics say it would be sub judice because a UK court is also currently examining the affair.
The UK's former permanent representative to the EU, Sir Nigel Sheinwald, wrote to Parliament chiefs in the summer to warn that setting up a formal probe would be a clear breach the EC Treaty.
UK Socialist MEP Michael Cashman echoes his view.
But Roy Perry, the Tory MEP pushing for an inquiry into the UK government's regulation of the market, said the way is now clear for fellow deputies to back his call at next week's plenary in Strasbourg.
"We have had a legal opinion from the legal service marked 'confidential'," he told this newspaper.
"Let's just say I am still quite confident and see no reason why we should not start a committee of inquiry."
Perry said the inquiry's remit would be targeted to avoid any direct conflicts with that of the UK case.
The Parliament's petitions committee has already voted in favour of Perry's report, which called for a probe into the Lloyd's affair if the European Commission failed to act against London.
That now looks to be the case.
Ruined investors who lodged complaints with the EU executive have now been told that the Commission is ready to end its investigation because a new law covering the regulation of Lloyd's is fully in line with European rules. But Perry argues that the matter should not be dropped.
He believes investors suffered in the past because EU rules approved in the early 1970s, which require a proper audit, were not respected.
Many investors - known as 'names' - were bankrupted when a flood of asbestosis claims started to hit Lloyd's.
The market's huge asbestos liabilities should have been uncovered by an audit, claims Perry.
Under the terms of Perrys report, MEPs would launch the probe if the Commission fails to issue, by 15 November, a detailed statement accounting for alleged failings between 1978 and 2001, when the new improved Lloyd's regime entered into force.
"Lloyd's and the UK government say they have nothing to hide. I say if they have such a robust defence, citizens and members have to see what it is," he said.
Parliament President Pat Cox has indicated he will support a committee of inquiry if the majority of MEPs vote for one next week - and if Perry can muster a signature from a quarter of the assembly's 626 members.
"Parliament's procedures provide for the establishment of a committee of inquiry should this be considered necessary," said Cox, adding that he is "following this issue personally".
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