14 December 1994

Times Law Reports

Queen's Bench Division

Regina v Chairman of the Regulatory Board of Lloyd's Ltd, Ex parte Macmillan and Another


Before Mr Justice Macpherson of Cluny


(Judgment November 25)


Practice - loss review - assessing risk of prejudice to litigation


Assessing risk of prejudice to litigation


Where a loss review was concurrent with litigation, the court should ascertain on a balance of probability whether there was a sufficient risk of prejudice to a party to the litigation to justify the exercise of discretion to order the loss review to be stayed until the end of the trial at first instance.


However, as the purpose of a loss review was not disciplinary but was to track down reasons for losses and where the purpose of litigation was to establish negligence or breach of statutory duty and recover damages, there was no total overlap of issues to merit the sparing exercise of the court's power to intervene.


Mr Justice Macpherson of Cluny so stated in the Queen's Bench Division when dismissing an application for judicial review by Roderick Macmillan and Stuart Thompson of a decision of the chairman of the regulatory board of Lloyd's of London made on June 10, 1994 on behalf of the Council of Lloyd's refusing to suspend the loss review of syndicate 80 of which Mr Macmillan was the former principal underwriter and syndicate 843 of which Mr Thompson was a former underwriter.


Mr Ian Hunter, QC and Mr David Joseph for the applicants; Mr Richard Gordon, QC and Mr Steven Kovats for Lloyd's.


MR JUSTICE MACPHERSONsaid that in each case a balancing exercise had to be performed. In some cases it might be in order for the loss review to continue, in others where there was prejudice it should not.


His Lordship was unable to give more general help other than to point to the relevant principles. The principles to be applied came from a series of Court of Appeal cases.


The most recent was R v Institute of Chartered Accountants in England and Wales, Ex parte Brindle (The Times January 12) but the present case was not parallel with Ex parte Brindle.


A loss review was not itself disciplinary. Its purpose was to track down the reasons for losses and to reveal the facts. The purpose of litigation was to establish negligence or breach of statutory duty and to recover damages. There was therefore no virtual eclipse of issues.


Many names were interested in the loss review and were not interested in litigation and there were other agents involved in litigation and not in the loss review.


The advanced stage of the loss review and the evidence suggested that there was considerable public interest to conclude it because the non-litigating names and Lloyd's were entitled to see it ended.


In the present case there were as yet no points of claim, no detailed pleadings. The loss review would surely end long before litigation was prepared for court and probably before any express allegations had been put against the defendants.


Where the clash of proceedings was between litigation and disciplinary proceedings the fact that the conclusions did not match might lead to

unfairness. But that was not so in the present situation.

Solicitors: Holman Fenwick & Willan; Mr Richard Prior.