P J AIKEN & ORS v STEWART WRIGHTSON MEMBERS AGENCY LTD & ORS ("THE PULBROOK SYNDICATES") (1995)
QBD (Potter J) 10/2/95
INSURANCE - CONTRACT - TORT
LLOYD'S NAMES LITIGATION : REINSURANCE
Duties owed by managing and management agents to Lloyd's Names.
Trial of a preliminary issue in eleven consolidated actions by 378 Lloyd's Names who were members of Lloyd's Syndicates Nos.333, 334, 335, 426 and 427 ('the Syndicate') for the 1985 underwriting year of account against the Syndicate's members agents, (1st to 9th defendants in the lead action) and the Syndicate's managing agents (the 10th defendants in the lead action), Pulbrook Underwriting Management ('PUM'), for breach of contract and negligence. The actions arose out of a contract of reinsurance made on 18/9/81 which arbitrators found by a majority had been lawfully avoided by Syndicate 418. The essence of the Syndicate's claim against PUM was that PUM owed a duty of care in and about the management of the Syndicate's underwriting at Lloyds and that PUM was in breach of that duty in three respects corresponding to the three grounds of avoidance upheld by the arbitrators in relation to the placing of run-off reinsurance with Syndicate 418.
HELD: (1) The Members Agents owed a duty in contract (but not in tort) to all the plaintiffs, whether by themselves or PUM to act with reasonable skill and care in relation to the placing of the run-off reinsurance in September 1981. (2) PUM owed a duty in tort to all of the plaintiffs to act with reasonable skill and care in relation to the placing of the run-off insurance in September 1981. (3) The Members Agents and PUM were each in breach of their respective duties by reason of PUM's failure to disclose the three matters which it was held in the Interim Award should have been disclosed. (4) If the three matters that should have been disclosed, had been disclosed, run-off reinsurance would have been placed on the same terms as it was in fact placed, save the premium would been US $750,000. (5) Save for the 11 plaintiffs whose Underwriting Agency Agreements were under seal (and save that the claims of Brusse And Finch have been reserved for agreement or further argument), all of the plaintiffs' claims in contract against the Members Agents in relation to run-off reinsurance were statute-barred.
LTL 20/2/95 : TLR 8/3/95 : (1995) 3 All ER 449 : (1995) 1 WLR 1281 : (1995) CLC 318
Document No. AC0002078