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He is among roughly 300 who once underwrote insurance at Lloyd’s‚ but refuse to pay mandatory settlements made in 1996 after billions in asbestos claims nearly toppled the market.
Jeffrey Peterson‚ president of the American Names Association‚ a group that has fought Lloyd’s‚ did not return calls for comment.
The association’s Web site charges that American investors were sought out in the 1980s to help absorb losses some at Lloyd’s anticipated but kept from investors.
British court‚ however‚ rejected a civil fraud suit in 2001.
At present‚ more than 97 percent of underwriters‚ known as names‚ have made settlement payments‚ according to Melanie Batley‚ a spokeswoman for Lloyds.
Unlike traditional investments‚ which cost buyers no more than they’re willing to risk‚ Lloyds investors faced unlimited liability when Mullin joined in 1987. After losing billions‚ Lloyd’s began in 1994 accepting limited liability investors.
Created in 1688‚ Lloyd’s is charged by Parliamentary Act with regulating its own insurance market.
Calling underwriters “names” is a throwback to the slips of papers passed around cafes frequented by wealthy aristocrats in the 17th century‚ when underwriters agreed to insure ships by signing their names‚ said Batley‚ reached by telephone in London.
But Mullin finds fault with the venerable insurer image Batley presents.
“We found out‚ disputably‚ that they were cheating the names by not advising us of asbestos liability that they had and consequently where we should have been making money we ended up losing it‚” Mullin said‚ adding that he’d lost more than a million dollars. He refused to pay a 1998 judgment entered against him in British Court.
In March of 2003‚ the U.S. District Court for the Eastern District of Pennsylvania found in favor of Lloyd’s. Mullin’s appeal of the summary judgment was rejected in a May 5‚ 2004 opinion.
Among other issues‚ Mullin argued that accepting the English judgment was “repugnant” to the state.
Third Circuit Judge John R. Gibson disagreed‚ writing that “a cause of action for breach of contract is certainly not repugnant to Pennsylvania public policy.”
Mullin said there are no further appeals to his case‚ though petitioning to reopen it was still a possibility.
Batley‚ however‚ said that it was time Mullin and others pay up.
“The remaining non-paying names have court judgments against them and there is no dispute about their obligation to pay‚” she said in an e-mailed statement.
