Society of Lloyd's v Laws & Ors

On 17^th April 2003, I gave Judgment on the application of various Names for permission to amend their case to pursue a claim against Lloyd’s in negligent mis-statement, statutory misrepresentation and in a number of other ways. As summarised in paragraph 216 of that Judgment, permission to amend was refused for all Names applying, save for a limited number of Names who fell into the categories described in sub-paragraphs xiii and xiv of that paragraph. Their applications to amend to plead negligent misstatement were adjourned pending the provision of particulars in accordance with paragraph 16 of the Order I made on 23^rd May 2003.

In paragraph 216, sub-paragraph xiii, I said this:

“In consequence of the above the only claims which have any realistic prospects of success and for which permission could be given are those brought by Names who have previously notified the Court of a claim for negligent misrepresentation made in the Brochure which was made to them after 11.10.1981 and was relied on by them in concluding arrangements with Lloyd’s and underwriting arrangements with Agents prior to 23.7.1982 when the 1982 Act came into force. If those Names who have pursued such claims did not have the requisite knowledge under section 14A of the 1980 Act more than 3 years prior to the issue of the writ or claim form in their respective actions, they may be able to pursue those claims further, provided always that their claim is not barred by section 14(B) of the 1980 Act.”

Following a further hearing on 23^rd May 2003, a list of Names who potentially fell into this category was finalised by me and the Order of that date provided that particulars should be given by them in accordance with paragraph 216, sub-paragraph xv of my Judgment of 17^th April. The Order required such Names who did not wish to pursue their applications for permission to amend to plead negligent misrepresentation to inform Lloyd’s Solicitors by 29^th May 2003. With regard to those who did wish to pursue them, Lloyd’s was to conduct a proportionate search and disclose copies of specified types of documents relating to the Names’ commitment to join Lloyd’s or to underwrite on syndicates. Once Lloyd’s had made disclosure the Names were to provide particulars verified by a statement of truth of:

“(5)

……………………………….

(a)

The date of any operative representation.

(b)

The dates on which it is alleged that, prior to 23 July 1982 but no more than fifteen years before the date when time stopped running against them (as identified in columns 3 or 4 to the schedule to the judgment: “the End Date”), an operative representation was relied upon.

(c)

The dates on which, in reliance upon any operative representation, they concluded legally binding arrangements with Lloyd’s and/or their Agents, including proper particulars of all such arrangements and the dates on which they were concluded.

(d)

Their case that they did not, more than 3 years prior to the End Date, have the requisite knowledge as defined in the judgment, including paragraphs 127, 128 and 214 of the judgment namely that there had been a history of under-reserving and a history of inadequate provision for RITC over many years at Lloyd’s.

(e)

The identity of any Names’ action group, or other Names’ association (including the Association of Lloyd’s Names and the Society of Names) which they joined more than 3 years before the End Date, identifying the group or association concerned and the date when the Name joined.”

The application was restored for this hearing before me with draft amendments which went beyond the form of the Re-Re-Re-Amended Points of Defence and Counterclaim previously produced in the name of Mr Laws (upon which I ruled in my earlier Judgment) with the additional particulars ordered on 23^rd May 2003. There were two elements to these additions. The first was the pleading of the quantum of the loss of three Names as a result of the decision in the Court of Appeal in the Society of Lloyd’s v Janet Ann Bowman [2002] EWCA Civ. 1886, which required such particularisation in order for me to determine at this hearing whether or not the three Names in question had realistic prospects of success in pursuing a Counterclaim for damages equal to or in excess of the amount demanded by Lloyd’s in a Statutory Demand. Each demand represented a sum awarded by a Court judgment in respect of Equitas premium due from the Names. The second element had nothing to do with any Order of the Court and involved additional areas of claims or facts put forward. I was not prepared to consider these as part of this application, which was, as outlined above, intended to be a restored application for the draft amendments considered by me at the earlier hearing. Issues regarding restitution, deliberate concealment, misfeasance in public office, breach of EC Directives and breach of Statutory Duty are not therefore before this Court for consideration. A plea advanced in paragraph 11 of the particulars to the effect that the whole process of underwriting would have ceased if Lloyd’s had corrected its misrepresentations also falls outside the scope of these applications.

The Names applied to the Court of Appeal for permission to appeal my decisions of April and May 2003. The Court of Appeal heard those matters in December 2003, together with the Appeal in the Bowman litigation to which I have just made reference. The Court granted permission to appeal on the Human Rights Act point, on the issue arising under section 35(5) of the 1980 Limitation Act, on the question of the date when the Lloyd’s Act came into force and to the 12 Names who did not advance Brochure claims to contend that they fell within the category of Names described in paragraph 216 (xiii) of my Judgment. It also appears from paragraph 80 of the Judgment that permission to appeal was given on the question whether claims under the Misrepresentation Act 1967 fell within section 14A of the Limitation Act 1980 but paragraph 99 appears to refuse permission on that point. Permission to appeal was refused on all other grounds and, where permission was granted, the Court went on to hear the appeals and dismissed them.

In paragraphs 41 to 51 of my Judgment, I decided when the cause of action arose for the Names. This was not the subject of any Appeal and represents the basis upon which the current applications must proceed. I held that the point where loss could first be held to have been suffered by a Name was the point at which the Name was bound to Lloyd’s or entered into an agreement with his agent to underwrite. This held good for both initial joiners and for Names who continued for each succeeding year. Loss was caused to each Name when he or she joined or remained in Lloyd’s or became committed, as a matter of law, to the Agent underwriting on his or her behalf. It is the point of entry into these arrangements that is therefore critical in determining the point at which the cause of action arose.

In paragraphs 95 to 109 I held that the requisite knowledge which the Names needed, in order to bring the claim for the purposes of section 14A of the 1980 Limitation Act, was knowledge of the representation and its falsity. Because of the form of the representation, the falsity of it could be seen when the Names knew that there had been a history of under-reserving and a history of inadequate provision for RITC over many years, representing a systemic failure in Lloyd’s auditing. The point is set out in paragraphs 103, 106 and 108 – 109. This was summarised at paragraph 127 following discussion of the evidence as to the actual knowledge of Names.

In consequence of the provisions of section 14B of the 1980 Limitation Act and section 14 of the Lloyd’s Act, as set out in paragraph 216, sub-paragraph xiii of the Judgment, there is a small “window” for any Name who can show that he has a realistic prospect of success in establishing that an operative misrepresentation was made to him or her in a Brochure within 15 years of the issue of the writ in his/her action and that this was relied on by him or her in concluding arrangements with Lloyd’s and/or underwriting arrangements with Agents prior to 23^rd July 1982. Since the cause of action arises at the point of conclusion of such arrangements which are binding upon the Names, those arrangements would have to be concluded within that window in reliance upon a representation which was first made within the window (for example by being read in that period) or which continues uncorrected during that period (having been made earlier).

The appropriate test is set out in paragraphs 28-31 of my Judgment and paragraphs 10 and 11 of the Judgment of the Court of Appeal. It can be summarised as requiring the Court to determine whether or not the case which the Names wish to advance by way of amendment has a real prospect of success or is properly arguable or whether there is some other compelling reason why there should be a trial. In assessing this I bear in mind that it is not appropriate to conduct a mini-trial without discovery and oral evidence.

30 Names (the UNO Names) were represented by Grower Freeman and Mr Callman of Counsel. In addition, two Names appeared in person, namely, Mrs Strong and Mrs Reisz. A number of other Names had previously been represented by More Fisher Browne and did not notify Lloyd’s Solicitors of any intention not to pursue their application for permission to amend. When represented by More Fisher Browne, papers were submitted relating to their applications but they were not represented at the hearing before me. Their applications are therefore dealt with on the basis of the materials put before the Court by those Names, taking into account all the arguments put forward by Mr Callman on behalf of the UNO Names and those of Mrs Strong and Mrs Reisz. In the case of the latter two Litigants in Person, I also take into account all the other arguments put forward on behalf of any Name.

The various Names who renew their applications were put into four categories for the purposes of consideration.

Before dealing with each category of Names, a number of preliminary points should be made in the light of the submissions advanced by the parties. Mr Callman for the UNO Names submitted that Lloyd’s had failed to make proper disclosure of documents in accordance with the Court’s Order because it had not produced documents which were once in the hands of members’ Agents and Managing Agents, such as syndicate lists. He further maintained that Lloyd’s must, through the LPSO, have had copies of such syndicate lists signed by individual Names. This does not seem to have been raised in any correspondence prior to the hearing and I saw little basis for such a contention. Nonetheless, I required Lloyd’s to produce evidence to show what had and had not been done and what documents did or did not exist in their possession. This resulted in a witness statement from Mr Demery of Lloyd’s who explained that Lloyd’s had procured extensive searches and had disclosed all the relevant documents in their hands and those of LMAS which they had found, as required by my Order, and that LPSO never had syndicate lists.

LMAS was established by Lloyds to handle the members’ agency functions for those non underwriting Names who would otherwise not have a members’ agent for the purpose of the run-off of their business. In such capacity, LMAS had received such documents as the previous agents had delivered to them.

Mr Callman contended that the Court should take account of the possibility of documents coming forward in the future from third parties which would assist his clients and that unless the Court could decide that it was virtually certain that no such documents would emerge, his clients’ case could not be held to be so unarguable that permission to amend should not be given.

I am satisfied that Lloyd’s have carried out a proportionate search in accordance with my Order and disclosed copies of the documents available to them which exhibit or record the dates when the relevant Names became members of Lloyd’s or entered into commitments to their Agents. Lloyd’s could be expected to have membership documents in their power whereas, so far as Agency documents are concerned, they inherited such documents from the Agents only when LMAS took over such documents from the prior Agents. They obtained such documents as were made available in those circumstances. It seems that out of 180 members’ Agents, only 5 have survived and a vast quantity of documents has disappeared. It is clear that Lloyd’s have not been selective in their production of documents since, in the case, of Dr Woyka and Mr Drysdale, two of the earliest joiners, Lloyd’s has produced syndicate lists signed by them in the autumn of 1981 which assist those Names’ cases. In many if not most cases, however, it has not been possible for Lloyd’s to produce these documents.

Furthermore, whilst accusing Lloyd’s of failure to make disclosure, the Names have failed to produce documents of the critical kind themselves. This may be understandable given the passage of time but it ill lies with them to complain that documents which they signed in connection with their relationship to their Agents (and to Lloyd’s) have not been found by Lloyd’s.

At the end of the day, what I have to decide is whether or not each of the relevant Names has a realistic prospect of success in pursuing the claim for which amendment is sought, taking into account the possibility that other documents may emerge which might throw light on the position advanced by those Names and by Lloyd’s. It was emphasised that the Names would go to great lengths to obtain documents from Agents in order to make good their case but the paucity of documents which the Names have produced so far does not assist them in that argument. Since the date of my Order in May of last year, the Names have had the better part of eight months and have so far produced very little indeed to the Court, whether from their own documents or elsewhere. This may be because they have made no efforts, because such documents do not assist or because there is very little to be obtained even when such efforts have been made.

Equally, the Names maintain that I should take into account the fact that further evidence is obtainable, both in the shape of evidence of fact from Agents and those who could give evidence of market practice at Lloyd’s, which would throw light upon the usual practice adopted and the timing of it in relation to the commitment of Names to underwriting arrangements with their Agents. As yet, virtually the only evidence which has been produced (apart from documents obtained by Lloyd’s) has been that of the Names themselves or those representing them. There is however the possibility that evidence could be adduced to show some sort of practice, whether generally in the market or restricted to certain Agents as to the date in the year when syndicate lists were agreed and the Names became committed to underwriting, whether for the first time or for subsequent years. Indeed I had evidence from Mr Freeman, Mr Thomas Everard and from Mr Kingsley on this point.

I made it plain in my previous Judgment and the Order which followed that adequate particularisation of the case of each Name was required in order to ascertain whether or not they fell within the relevant window. To do so, the Names were required to specify the date of any operative representation, the date of reliance thereon and the dates of concluding legally binding arrangements with Agents and with Lloyd’s all within the window. Almost without exception, the Names have failed to set out any specific dates at all in respect of each of these elements. For the most part, where any statement covers these aspects, it does so by reference to a phrase such as “during the autumn”, “during the winter” or “during the autumn/ winter”. The only agency documents which have been produced showing the date of signature of syndicate lists have emanated from Lloyd’s. The Names, almost without exception, have failed to produce any documents which assist on the critical point as to when underwriting arrangements were concluded for the 1982 or 1983 years. In circumstances where particularisation was required and eight months have passed since the Order which I made, general statements of the kind made by Names are of limited value. It is not good enough for Names, seeking permission to amend, to make general assertions unsupported by any specific evidence or documents which suggest that they might fall within the window, whilst relying on the possibility of an exceptional agreement to syndicate lists after the start of the underwriting year and/or the possibility of documents becoming available from Agents (mostly in liquidation) and/or evidence from Agents to establish their case that they do fall within the window. To succeed in an application there must be some legitimate basis put forward for the assertion that the cause of action arose within the window applicable to the individual Name. Whilst a likelihood that key documents or evidence would be forthcoming could present a good reason why there should be a trial, this argument carries limited weight when no evidence is produced to demonstrate the likelihood of such documents or evidence being forthcoming or of any effort to obtain them.

Bearing in mind the possibility of availability of further documents and further evidence, I have to decide the application before me on the basis of the evidence that has been adduced, in order to determine whether or not each relevant Name has a realistic prospect of success in pursuing his or her amended case. In a number of instances, there was very little documentation to show the point at which the Name became committed to underwriting. Where a Name was a joiner, the position was ameliorated to some extent by Lloyd’s ability to show the date upon which each member became a member of Lloyd’s, since, as a matter of law, by virtue of the Lloyd’s Acts, no Name could underwrite at Lloyd’s prior to becoming a member of Lloyd’s. Any arrangements made with the Agents prior to that could only be conditional upon the Name being elected as a member. It was argued on behalf of the Names that election was a mere formality and that there was a need for factual and expert evidence as to the date when underwriting arrangements were concluded. It was accepted that the Names’ and Agents’ signature of syndicate lists bound the Name but it was said that the election of Names to Lloyd’s did not conclude the issue for new joiners.

Mr Callman argued that there was no relevant loss and that no cause of action arose when the Name became committed to his/her agent to underwrite and that this only accrued when the members’ Agents agreed with the Managing Agents on the Names’ participation. It was also maintained on the basis not only of paragraph 41 of my earlier Judgment but by reference to a paragraph which appeared in most of the statements produced by the Names that underwriting arrangements for continuing members were often not completed until some time after the start of the new underwriting year.

As to the latter point, the evidence before the Court was that the normal practice was for suggested syndicate lists to be sent out by the Agents following the publication of the previous year’s syndicate results. This would usually be in the last half or last quarter of the year with a view to discussion and agreement on the list prior to the end of the year. Usually this agreement took place before that date, because the Syndicates were writing business with effect from January 1^st and the composition of the Syndicates should have been complete by that stage, but there were occasions, particularly in the early 1980s when arrangements were not concluded prior to the commencement of the new underwriting year.

Mr Freeman’s evidence as to the signature of syndicate lists, which are crucial in this respect was as follows:

“It might happen that for a number of reasons the member did not sign the syndicate list until nearly the end of the calendar year [prior to the year of underwriting] and technically, and sometimes in practice, the Members’ Agent would accept the signed syndicate list up until December 31^st in any year provided of course that capacity remained available at the syndicates listed by the Members’ Agent.”

The evidence of Mr Kingsley, who as a member of UNO, was not unfriendly to the Names’ case, was that his usual practice was to send out suggested syndicate lists in October and November and that typically the Names would be signing such lists in November and December, but sometimes the time table slipped.

Whilst there was evidence from Mr Kingsley and Mr Thomas Everard to the effect that, on occasions, lists were not completed until after the new year, this was plainly very much the exception to the rule. Self evidently since business was written by syndicates with effect from 1 January of each year, there was a compelling need for everybody (including Members’ Agents, Managing Agents and Names) to know the identity of those Names who constituted the syndicate for that year. If this did not occur and syndicates were not fully constituted, the placement of business by brokers was in jeopardy and Agents would not be able to subscribe risks with any certainty as to the identity and syndicate share of the insuring Names. Whilst it clearly did happen that formal arrangements were not concluded before the end of the preceding year, this can only have happened in a small fraction of cases and, in order to rely on such an exceptional case, there would have to be some evidential basis for asserting that this is what happened in any particular case.

Furthermore, in the context of the making of representations to continuing members, it is the Names’ case that the representations originally made to Names in Brochures provided to them when they joined, continued as representations throughout their time at Lloyd’s and that they relied upon those representations when committing themselves to underwrite for each succeeding year. In these circumstances, the continuing Name decided, in reliance upon representation, not to resign from Lloyd’s (which could not be effective until his underwriting years of account were closed), not to become a non-underwriting member of Lloyd’s for the ensuing year and/or to commit to underwriting in the following year whether by remaining in the syndicates to which he had previously belonged or by altering his participation in syndicates and the limits to which he wrote.

Some matters are clear as issues of principle. The first is that the point at which the Name became committed to underwriting is the point at which, in accordance with ordinary contractual principles, a concluded contract was made by the Name with his underwriting agent. I have already held this to be the case in paragraphs 43-50 of my earlier judgment.

Notwithstanding considerable argument on the point, it is clear that under the pre 1987 system as described in Henderson v Merrett [1995] 2AC 145 and as exemplified in the form of Agency agreement annexed to the decision of Saville J at first instance in that case [1994] 2 LLR 193 (all agency agreements adopted an essentially similar structure), the members’ agent undertook to underwrite for the Name on the syndicates specified in the schedule to the agreement and delegated that authority to sub agents where the actual underwriting for those syndicates was carried out by others. The only commitment that the Name ever undertook was to his own agent- he had no contractual relationship with the subagent to whom the underwriting power might be delegated.

Loss was first caused to the Name and his/her cause of action arose when he or she concluded arrangements with Lloyd’s or her agents with immediate liability for fees and any liabilities that the agent might assume on his/her behalf. The election to Lloyd’s for a joiner is therefore a key point when loss is suffered and a cause of action arises and the signature of syndicate lists by the Name and his agent is therefore a key point for continuers for the same reason.

The decision of the Name to join Lloyd’s or to underwrite in reliance upon any representation was a necessary precursor to the conclusion of any such arrangement with Lloyd’s or an agent, but the decision does not amount to the conclusion of any such arrangement.

So far as concerns continuing representations to continuing Names, it is arguable that a representation made originally to a Name in a Brochure prior to joining Lloyd’s could constitute a continuing representation upon which that Name could rely in entering into fresh arrangements for an ensuing underwriting year, rather than opting out of such arrangements (and becoming a non-underwriting member of Lloyd’s) or tendering a resignation from Lloyd’s which could only be effective once the Names’ accounting years were closed. In each case however the cause of action can only be constituted at the point at which the underwriting arrangements were concluded for the year in question since this represents the point at which the Name became committed to the course of action to which he or she would not have become committed, if the continuing representation not been made or continued or if it had been corrected. There is therefore no material difference in the point at which the cause of action arises, however the Name’s claim of reliance is expressed, whether by reference to a decision to continue or a decision not to opt out. The signature of syndicate lists by the Name and his agent is the point where an agreement to underwrite on those syndicates in the relevant year is made.

I indicated at the outset of the hearing that, on the basis of the statements of the Names which I had read, there were triable issues of fact which arose in relation both to questions of reliance and questions of the knowledge of the Names for the purposes of section 14A of the Limitation Act 1980.

As pointed out by Mr Callman for the Names, however many inconsistencies there are in the evidence of the Names on questions of knowledge and reliance, these are questions of fact involving the subjective state of mind of the Names so that, if a prima facie case is raised, it is very hard to see how it can be said that the Name has no realistic prospect of success on it. There may be room for considerable scepticism about the evidence adduced, particularly in the light of other evidence from the Name or in the light of documents placed before the Court but these are issues of fact which would ordinarily be appropriate for exploration in cross-examination and oral evidence at trial. It is only therefore in clear cases that I would feel able to conclude that a Name had no realistic prospect of success on such points and such evidence would have to emerge from the Name himself or herself or be so clear on the documents that the prima facie evidence put forward by the Name could be rejected in the same way as when determining a claim for Summary Judgment.

Once an issue of limitation by effluxion of time has been raised in response to a claim, the burden of establishing that the claim is in time, falls on the person making the claim. This must be as true for the 15 year time bar presented by section 14B of the 1980 Act as for the 6 year period under section 2. With a long stop provision of this type, the rationale for imposing that burden on the claimant is stronger than that for the primary period of limitation, even though the question of burden of proof under section 14A is much more complex.

As mentioned above, there are no relevant Names who were joiners for the 1982 year against whom Writs were issued in 1996, although category ii) involves Names who did join for 1982 and against whom Writs were issued in 1997. There are nine Names who fall into this first category but Mrs Jones has provided no particulars and I have already dismissed her application. In the case of each of the other Names, the Writs in question were issued on either 10^th October 1996, 15^th October 1996 or 25^th October 1996 so that the relevant window in which a representation operated, reliance was placed and underwriting arrangements made, so far as each is concerned, runs from the appropriate date in October 1981 through to 23^rd July 1982.

In the case of Dr Woyka and Mr Drysdale, Lloyd’s concedes that there are contemporaneous documents which indicate that there is an arguable case in relation to the conclusion of legal arrangements to underwrite for 1982 within the window. In the case of Mr Drysdale, there is an application to Lloyd’s to start a new class of business and join additional syndicates dated 22^nd October 1981 and approved by Lloyd’s Membership Department on 28^th October 1981. This set out the syndicates for which Mr Drysdale was to underwrite in 1982 and was signed by Mr Drysdale and his Agents. The form included the rubric “we confirm that where applicable the member has been provided with the requisite information regarding the above syndicates and that the underwriting Agency agreements will be signed by 31^st December or within 30 days of the approval of the underwriting arrangement change.” In the case of Dr Woyka there is a syndicate list dated 18^th November 1981 signed by Dr Woyka and his members’ Agent setting out the allocation of his premium limit (with effect from 1^st January 1982) to the syndicates specified on the document. In both cases Lloyd’s was right to concede that these two Names have an arguable case that underwriting arrangements were concluded within the window. A further point arises in relation to Mr Drysdale in relation to the question of reliance, to which I will revert.

In the case of the other six Names, there is an absence of contemporaneous documents in the materials put before the Court to demonstrate in any definitive way the date upon which underwriting arrangements were concluded for 1982.

Mr Allard

As set out previously, once the fifteen year time bar has been raised as an issue and is seen to be prima facie applicable, the position on such a long stop date must be the same, so far as concerns the burden of proof, as that for a six year period under section 2 of the Limitation Act. The burden must therefore be upon the person who asserts that the claim is in time to establish that it truly is. At the stage of seeking permission to amend however all that has to be shown is that there is a realistic prospect of successfully establishing this. Notwithstanding the statement of truth in relation to the draft amended pleading, the only material which can be considered as genuine evidence as to the conclusion of legal arrangements for underwriting appears in paragraph 3 of Mr Allard’s statement. It would be open to a Judge to accept the statement made in paragraph 3 in the absence of evidence to the contrary, given the normal practice of agreeing syndicate lists in November or December, as sufficient on the balance of probabilities to show that such arrangements were concluded after 25^th October 1981 and before 23^rd July 1982. In these circumstances Mr Allard has met the test for amendment in relation to the conclusion of underwriting arrangements.

Mr Garrow

For the same reasons as I have given for Mr Allard, given the usual practice of agreeing syndicate lists in November or December, Mr Garrow satisfies the criteria for leave to amend, in relation to the conclusion of underwriting arrangements.

Mr Hardman

In the absence of evidence to the contrary, although the supporting evidence is vague in the extreme, given the normal practice of agreeing syndicate lists in November or December and the comments of his agent in the letter of November 1982, Mr Hardman does, in my judgment, have a realistic prospect of successfully establishing that legal arrangements to underwrite were made within the window.

Mr Ranald

With considerable reservation, but in the light of the normal practice as to the date when syndicate lists were agreed, I accept that Mr Ranald has done enough in his statement to raise a prima facie case that arrangements to underwrite were made after 10^th October 1981 and in the absence of any evidence to the contrary, permission to amend is given.

Mr Remillard

In these circumstances for much the same reasons as for the other Names in this category, and given the usual practice, I hold that Mr Remillard has met the test for amendment in relation to the conclusions of his underwriting arrangements.

Mr Wilkinson

For the same reasons as for others in this category, and given the normal practice, Mr Wilkinson has satisfied the criteria for permission to amend so far as concerns the conclusion of arrangements for underwriting.

Mr Foxton on behalf of Lloyd’s submitted that the terms of paragraph 7 of Mr Allard’s statement, Mr Garrow’s statement and Mr Wilkinson’s statement which were all to the effect that it was not until the late 1980s or early 1990s that it was explained that they might have inherited liabilities from before they had become members that had not been properly reserved at the time, meant that they were saying that they had sufficient knowledge for section 14A purposes by the early 1990s. In the case of the first two Names, I find that this is nothing like enough to satisfy me that, in circumstances where the draft amended pleading, backed up by a statement of truth, asserts insufficient knowledge until R&R, they have no arguable case on this point. In the case of Mr Wilkinson he additionally states in an Affidavit in the Bankruptcy Court that it was in 1991 that his financial adviser advised him that he was becoming concerned about problems at Lloyd’s and specifically about asbestos claims which had not been correctly accounted for. It was in consequence of this and discussions with his Agents that he tendered his resignation to Lloyd’s on 3^rd August 1991. Once again, this is not sufficient to conclude the issue against Mr Wilkinson and I find that he has therefore an arguable case on this point also.

For much the same reasons, paragraph 8 of Mr Remillard’s statement does not conclude the issue against him. In that paragraph he says that he was told of losses for the 1981 year only in 1984 and saw the deterioration each year thereafter which resulted in his loss of confidence in what he had been told and his resignation at the end of 1987. In the light of the other materials, he has an arguable case on this point as does Mr Hardman who referred to his discussions with his Agents in the Spring of 1982, being unable to reconcile the meaning of the wording in the Brochure with the inheritance of liabilities of previous closed years in Lloyd’s. He therefore resigned in 1985 because of his concerns on the matter although he subsequently rejoined Lloyd’s in 1988. Whilst there is much force in the points Lloyd’s make about Mr Hardman’s position in particular and the other Names also in this respect, I cannot conclude that they do not have a realistic prospect of establishing that they did not have the requisite knowledge for the purposes of section 14A prior to R&R.

Lloyd’s refer to a statement made by Mr Drysdale and say that it is not realistic that he could succeed in establishing reliance on the Brochure in the face of that statement. There is the usual pleading of reliance, backed up with a statement of truth. There is however nothing in his Affidavit of 1^st July 2003 to show that he read the Brochure, appreciated that any representation was made in it about the Lloyd’s auditing system or relied upon it. He refers to reassurances by his Agent about the system of Lloyd’s and in particular the auditing system.

More importantly, in answer to a questionnaire sent to him by his Solicitors, he gave the following answers on 4^th July 2003:-

Question a) “Do you remember seeing the Lloyd’s Brochure before you agreed to become a member of Lloyd’s? If so, who did you receive it from? When you were given the Brochure was it given to you on the basis that it was to help enable you to make your decision whether to become a member? If not, then on what basis?”

Answer a) “Do not remember seeing Brochure”

Question c) “Did you realise at the time you received it that the Brochure was an important document which had in it important information and that you were expected to read the Brochure and take it seriously?”

Question d) “Did you read the Brochure at the time and do you specifically remember doing so? If not, would it have been your usual practice to read a document like this? If so, then please state fully what your usual practice was in connection with documents like this?”

Answers c) and d) “No. All my Lloyd’s affairs were handled by David Evers, before joining and once a member. I was told not to bother.”

Question e) “Do you recall reading the specific passages about the auditing systems Lloyd’s had in place involving the making of a reasonable estimate of outstanding liabilities, including unknown and un-noted losses? By un-noted losses the Court of Appeal was referring to losses which had not been reported by the Insured to the syndicate. If not, would it have been your usual practice to have had read a document such as this thoroughly?”

Answer e) “I do not recall this.”

Question “In respect of subsequent Brochures received, please also answer c) and e) above in respect of the subsequent Brochures”

Answer I have no recollection of further Brochures.”

In the light of these answers which show a commendable degree of candour, I cannot see that Mr Drysdale has any realistic prospect of success in asserting that there was reliance by him upon the statement in the Brochure which forms the basis of the Names’ claims. For this reason, Mr Drysdale’s application for permission to amend is refused.

For the reasons already given, all the applications of the Names in category i) other than Mrs Jones and Mr Drysdale succeed and permission to amend is therefore given to Messrs Allard, Garrow, Hardman, Ranald, Remillard, Wilkinson and Woyka.

There are five Names who fall into this category, namely, Mrs Bowman, the Estate of Mr Florescu and Messrs Laws, Mendoza and Ottow, all of whom were UNO Names. Each of these has to show an operative representation within 15 years of the date of the Writ and operative reliance in concluding legal arrangements to underwrite in order to have a complete cause of action prior to Lloyd’s immunity taking effect on 23^rd July 1982. Each of the Names in this category except Mr Ottow included in one of their statements a paragraph in the following or similar form: -

“For ongoing Names acting in continuing reliance on the representations the process of deciding to continue underwriting or add to or subtract from the portfolio of syndicates is a continuing process. Review would start with the publication of results in the summer. By letter, phone or meeting, there would be discussions with the Agents about the next year’s programme. In the early 80s that process was often not finalised until after the year had started when the Agents got round to getting the paperwork signed.”

It is worth pointing out that in the context of joiners for the 1982 year, this does not really assist, since this evidence relates to the continuance of underwriting rather than the commencement of it. The process of election to join Lloyd’s involves the members’ Agent and the prospective Name putting forward to Lloyd’s the syndicates which the Name proposes to join and the form of Agency agreements used by the syndicates. The application form and the Verification Form refer to those syndicates and the Rota Committee Meeting was intended to ensure that the Name knew what obligations he would be undertaking to his Agent. It is clear that, in the ordinary course, underwriting arrangements would be concluded for a new Name before lst January, as would his election to membership of Lloyd’s. The finalising of the arrangements would often be concluded by the election to Lloyd’s with everything in place before that.

Mrs Bowman

For these reasons in the light of the usual practice, notwithstanding paragraph 1 of Mrs Bowman’s statement in July 2003. I cannot conclude that she has any realistic prospects of success in showing that she entered into binding arrangements to underwrite after 29^th January 1982.

Mrs Bowman’s statement contained wording to the same effect as that which appeared in Mr Garrow’s statement but, in addition, in a statement of November 2002, she related that she and her husband ceased to underwrite when they learned that there was no proper control at Lloyd’s, that the audit had failed them and that Lloyd’s had relaxed its requirements for members’ Agents to carry adequate indemnity insurance. For much the same reasons as for other Names I cannot conclude that, on this basis, Mrs Bowman has no real prospect of successfully showing that she did not have the requisite knowledge until R&R although she ceased to underwrite for the 1993 year.

The Estate of Mr Florescu

Mr Laws

On the basis of this material, there is simply no indication of the date of commitment to underwriting arrangements in the documents save the inference to be drawn from the membership application and the election to Lloyd’s on 16^th December. Given the usual practice, there is no realistic prospect of Mr Laws being able to demonstrate that he became bound to underwrite after 24^th March 1982 and permission to amend must therefore be refused.

Mr Mendoza

With these materials, no Court could conclude that Mr Mendoza did not become committed to his underwriting arrangements upon election to Lloyd’s on 9^th December. Mr Mendoza must therefore be refused permission to amend.

Mr Ottow

There is therefore no basis for any Court to find that Mr Ottow did not conclude his underwriting arrangements before 24^th March 1982 and Mr Ottow’s application must therefore be dismissed.

There are 17 Names in this category but 3 of these have not supplied any particulars and I have already dismissed their applications. Most of the UNO Names in this category included a paragraph in their supplementary statement (or occasionally in their only statement) to the same effect as that set out earlier in paragraph 56 of this Judgment, in relation to the date of commitment for continuance to underwrite in succeeding years. All sought to rely upon the evidence that review of the syndicates upon which a Name would underwrite would start with the publication of results of the syndicates in the summer. Thereafter, there would be discussion with the Agents about the programme of syndicates for the following year but “in the early 80s that process was often not finalised until after the year had started when the Agents got round to having the paperwork signed”. This, of course, was necessary for any Name to be able to pursue a case within his or her window because the earliest Writs were dated 29^th January 1997, although there were also Writs in February, March June and July 1997. The window was therefore, for some Names, an extremely narrow one.

Mrs Boucher

Unlike other cases, it can clearly be seen from this letter that Mr Boucher did have the requisite knowledge on 8^th September 1989 and his wife’s reference to this in her statement, leading to her resignation shows that she also knew enough for this purpose.

Looking at Mrs Boucher’s case on all three fronts, namely, the date of conclusion of underwriting arrangements, the question of misrepresentation and reliance on the Brochure and the issue of knowledge, I have come to the clear conclusion that Mrs Boucher’s claim has no real prospect of success and her application for amendment is therefore refused.

Mr Bowman

It is thus not possible for Mr Bowman to maintain that he did not conclude his underwriting arrangements for the 1982 year until after 29^th January 1982 and, in so far as his diary records, “decisions to increase our levels of underwriting wherever possible” it also detracts from his wife’s argument, which in any event runs counter to the documents showing her choice of syndicates. Mr Bowman’s application, like that of his wife is therefore refused.

In addition Lloyd’s relied upon paragraph 7 of his supplementary statement, which was in much the same form as Mr Allard, to show that he had sufficient knowledge for section 14 purposes. For the same reasons given in relation to Mr Allard and others, I would not have considered that this provided a bar to his application for leave to amend.

Insofar as it was argued that Mr Bowman took actions within his window of 29^th January to 23^rd July which mean that he has an arguable case for amendment in respect of the 1983 year, that argument cannot succeed. There is no basis for suggesting that underwriting arrangements for 1983 were concluded before 23^rd July 1982.

Mrs Browne

In the light of the evidence as it stands and the usual practice at Lloyd’s, I can see no realistic prospect of Mrs Browne establishing that underwriting arrangements for 1982 were concluded after 29^th January 1982. Permission to amend must therefore be refused.

Mr Edmonds

The terms of the application to Lloyd’s, with the approval of Lloyd’s on 4^th November with the rubric signed by the Agents confirming that the underwriting Agency agreements would be signed by 31^st December or within 30 days of the approval of the underwriting arrangement change is clear evidence that the normal practice was observed in the present case and agreement reached on the syndicate list well before the start of the window period. In the absence of any evidence that underwriting arrangements were concluded after 12^th February 1982, Mr Edmonds has no realistic prospect of success in showing that this was the position.

Equally, any decision to increase capacity for 1983 would not amount to a commitment to underwriting arrangements for 1983. On his own evidence in his supplementary statement, review would start with the publication of results in the summer followed by discussion and finalisation of syndicates at a later stage. An increase in capacity does not amount to an underwriting commitment. On this basis the application for permission to amend, whether relating to the 1982 year or the 1983 year fails.

Captain Hindle

In these circumstances there is no realistic prospect of Captain Hindle establishing that underwriting arrangements were not concluded for 1982 until after 21^st February 1982.

Mr Juer

From the evidence available, there is no basis for any suggestion that underwriting arrangements were made for 1982 between 8^th July and 23^rd July of that year. Moreover, in a letter dated 4^th July 2003 in answer to his Solicitors’ questionnaire, he says that “the decisions on my underwriting were taken every year during September – early October” and that he had checked this with his former Agent. There is, in the light of all this evidence and the usual practice, no realistic prospect of Mr Juer establishing that underwriting arrangements were concluded within his window, whether for the 1982 or the 1983 year.

Mr Kinsella

In these circumstances it is clear that 1982 underwriting arrangements were made before 29^th January 1982 and that Mr Kinsella has no realistic prospect of establishing that such arrangements were made within his relevant window. The fact that Lloyd’s wrote to his Agents in April 1982 confirming that Mr Kinsella had complied with the requirements of the Committee in connection with his application to increase his premium limit is neither here nor there. Nor is there any basis for contending that underwriting arrangements for 1983 were concluded within his window.

Mr Luxton

Given the usual practice, there is no evidential basis for suggesting that Mr Luxton’s underwriting arrangements were concluded after 29^th January 1982. The report as to means does not represent any commitment to underwriting of any kind and was made in response to random requests by Lloyd’s for such confirmation. In these circumstances I cannot see that Mr Luxton has any realistic prospect of establishing that underwriting arrangements were concluded within his relevant window for any year.

The Estate of Mr Marich

As with Mr Luxton, there is no basis for any suggestion that the normal practice did not take place in concluding underwriting arrangements prior to the end of 1981. In these circumstances I cannot see that there is a realistic prospect of success in showing that underwriting arrangements were made after 29^th January 1982.

Lloyd’s argued that a paragraph in Mr Marich’s statement showed that he had sufficient knowledge for s 14 A purposes. This paragraph took essentially the same form as that for Mr Allard and, for the same reasons as I gave in his case, I would not have held that this was sufficient to make his case on knowledge unarguable.

Mr Meller

So far as concerns 1982, there is simply no basis for any suggestion that underwriting arrangements were made after 4^th June 1982. Mr Meller’s evidence that he renewed during the autumn and winter of 1981/2 means that he cannot fall within the window. So far as 1983 is concerned, there is a document signed by his old Agents and Mr Meller showing an allocation of £15,000 to motor syndicate 439 and leaving £35,000 unallocated from a total premium limit of £50,000. This appears to have nothing whatever to do with the commitment which Mr Meller says he made to the new syndicates in 1982 which caused him loss as a result of appointing Gooda Walker as his new underwriting Agent who put him on the Gooda Walker, Rose Thompson Young & Feltrim syndicates. The exhibited document bears no relationship to any increase in overall premium limit to £190,000. There is therefore no basis for any assertion of conclusion of underwriting arrangements with relevant syndicates causing loss to Mr Meller for 1983 within his limited window. A statement of means is not a commitment to underwrite and the allocation to a motor syndicate of 18^th June is irrelevant for current purposes. Permission to amend whether in relation to the 1982 or 1983 underwriting years is therefore refused.

Mr Salter

It is clear therefore that Mr Salter has no realistic prospect of establishing that underwriting arrangements were concluded after 24^th March 1982 or of making out any case of reliance on a representation made to him. Permission to amend must therefore be refused.

Mr Stamm

There is therefore no realistic prospect of Mr Stamm establishing that underwriting arrangements were concluded after 21^st February 1982 and permission to amend is therefore refused.

Mr Williams

There is inconsistency in the statement of Mr Williams as to the date when he “renewed” his underwriting and “committed to the 1982 year of account” but the overall effect of what he says in both statements is that this occurred in 1981 rather than 1982. Given the usual practice, there is no basis for advancing the case that underwriting arrangements were concluded after 11^th February 1982 and permission to amend must therefore be refused.

Mrs Young

Despite the lengthy statements from Mrs Young and the documents produced by her, there is no relevant evidence to suggest that the underwriting arrangements for the 1982 year were concluded after 24^th March 1982. Given the normal practice, notwithstanding the late submission of some documents by Rose Thompson Young, there is in truth no supporting material for a case to be made on this basis. The signature of Agency agreements or their schedules would follow the agreement of syndicate lists and gives rise to no inference as to the date of agreement of such lists. Permission to amend must therefore be refused.

There were six Names who fell into this category who began underwriting in 1983 but who seek to say that they fall within the window in respect of commitments made prior to 23^rd July 1982. Mr Child and Mr Savvides were previously represented by More Fisher Browne whilst Mr Florence and Mr Van den Akker were UNO Names whilst Mrs Strong and Ms Reisz represented themselves as Litigants in Person.

This category of Names can be dealt with very shortly because, in all cases, it is plain that their commitment to Lloyd’s and their commitment to underwrite for 1983 occurred after 23^rd July 1982 when the Lloyd’s Act came into force, thus making Lloyd’s immune in respect of any cause of action for the 1983 year. For the most part, the Names relied upon matters occurring prior to 23^rd July 1982 which were preliminaries to their membership of Lloyd’s. In each case however the Name was not elected a member of Lloyd’s until December 1982 and was not even recommended for election until August 1982. Without being members of Lloyd’s, there is no way in which a person could be legally bound to underwrite, since only members of Lloyd’s can do so under the Lloyd’s Acts. It would be unlawful for any person to do otherwise. As a result, all arrangements made with Agents are conditional upon the person concerned becoming a member of Lloyd’s and, in the case of the 1983 joiners therefore, whatever dates underwriting arrangements were made with Agents, it is clear that the earliest date for being bound is the date upon which each was elected to membership of Lloyd’s.

Moreover there are various documents relating to each of these Names which makes the position entirely clear. Each of these Names signed a Verification Form after 23^rd July 1982 in connection with the application to be admitted as an underwriting member of Lloyd’s. Usually these forms were completed at or following the Rota Committee Meeting. For most of these Names, there is evidence of the Rota Committee Meeting taking place after 23^rd July also. The Verification Form however included the following wording:-

i)

“with reference to my application to be admitted as an underwriting member of Lloyd’s, I confirm that………….”

ii)

“I have received sufficient information to enable me to reach my decision to apply for membership of Lloyd’s. My underwriting Agents have given me the opportunity to ask questions concerning both membership of Lloyd’s and the syndicates I propose to join ……”

iii)

“I have seen and understand the underwriting agreement applicable to each syndicate which I propose to join”.

The purpose of the Rota Committee Meeting which has been the subject of considerable complaints by Lloyd’s Names in the past, on the basis that they were not given any adequate information or warning as to the liabilities they would be undertaking, was to ensure that that Names, prior to becoming members of Lloyd’s, were being made so aware.

It was argued that, during the relevant window period for each Name, a decision was taken not to become a non-underwriting member of Lloyd’s. This does not however advance the Names’ case in relation to their cause of action since the point at which the alleged misrepresentation became operative was not the point at which they decided to join Lloyd’s but the point at which they became legally bound in respect of their underwriting arrangements. In the case of each of these Names the earliest possible date when this could have occurred was the date of their election to membership of Lloyd’s, all of which occurred after the date when the Lloyd’s Act came into force.

Mr Child and Mrs Strong were elected to membership on 15^th December 1982. Mr Florence, Ms Reisz and Mr Van den Akker were elected on 22^nd December 1982 and Mr Savvides was elected on 30^th December 1982. In the circumstances, it is neither here nor there that applications for underwriting membership were completed prior to 23^rd July 1982 and sent to the Agent or by the Agent to Lloyd’s Membership Department, since unilateral action of this kind could not create any underwriting obligation upon the Names. Until their application for membership was accepted by Lloyd’s they were not committed to underwriting at all, as the Verification Form and other documents such as the Assignment of Premiums Form make plain. In some cases, even the application form for underwriting membership was not completed by the relevant Name prior to 23^rd July 1982. In all these cases therefore these claimants have no realistic prospect of showing that a cause of action accrued to them prior to 23^rd July 1982, the date upon which the Lloyd’s Act came into force. Lloyd’s is therefore entitled to immunity in respect of any claim for negligent misstatement and the Names in question cannot show that they have a realistic prospect of success in pursuing the claims for which amendment is sought. Permission to amend must therefore be refused on this basis alone.

In accordance with the Judgment of the Court of Appeal in Lloyd’s vBowman, I am to determine whether or not Mrs Bowman, Mr Drysdale and Dr Woyka have arguable claims which equal or exceed the amount of the Statutory Demand made by Lloyd’s. For the reasons already given, I have held that Mrs Bowman and Mr Drysdale do not have an arguable claim in negligent misstatement and have refused them permission to amend whilst giving Dr Woyka such permission.

In the Bankruptcy hearing before Mr Justice Laddie, Lloyd’s submitted that the only damages which a Name could recover from the decision to join or remain on syndicates for the 1982 year of account was any loss made by the Name on those syndicates for that year of account. It may be that this was not challenged by the Names at that hearing but argument on it was raised in the hearing before the Court of Appeal who commented on it in paragraphs 21-24 of the Judgment of the Court. The Court observed:

“In practice we think, the need to show loss suffered before 23^rd July 1982 is likely to mean that the loss is attributable to membership of a syndicate in 1982. But we do not rule out the possibility that those who are members of syndicates in 1982 may have become liable for losses sustained in earlier years; and may have remained liable for losses which were not quantified until later years. ………….

We recognise that a category ii) respondent who seeks to establish a claim for an amount that equals or exceeds the amount demanded of him under the Statutory Demand is likely to face formidable difficulties on the facts. But it is impossible to say whether any of the category ii) respondents has any real prospect of overcoming these difficulties without seeing how he puts his case.”

The Names claimed loss on two alternative footings.

The first argument put forward by the Names is doomed to failure because it ignores principles of causation and fails to take account of the way in which Lloyd’s works. As appears below in relation to my decision on the alternative calculations put forward on the Names’ behalf, the loss suffered by any Name is referable to a year of account in which he underwrites. The loss on each year is attributable to the Name’s commitment to underwrite for that year, not on a commitment to underwrite for an earlier year. The whole basis of my previous decision is the need for the Name to show an operative representation by Lloyd’s within 15 years of the date of the writ and reliance in the shape of concluding legal arrangements with Lloyd’s or agents and thus having an accrued cause of action before Lloyd’s immunity became effective. The conclusion of arrangements for other years outside the window is of no assistance to the Name, since his loss on other years results from that commitment, not a commitment made within the window.

For the purposes of their alternative calculations, the Names submit that if a syndicate on which a Name was underwriting in 1982 incurs a loss in 1984 that loss could either relate back to underwriting in 1982 (through RITC) or could relate to fresh underwriting in 1984, thus distinguishing “pure year losses” from losses attributable to under-reserving and inadequate premium for RITC. The Names say that they do not have the information required to separate the figures in respect of pure year losses and losses attributable to past years. In order to resolve such issues it is said that a full scale trial would be required because complex accounting issues are involved.

The resultant calculation produced by the three UNO Names proceeds on the following basis:-

Lloyd’s say and rightly say that the Names’ calculations are entirely misconceived.

First, it is clear that, on the case made by the Names, they would not have been underwriting in 1982 but for Lloyd’s failures. In those circumstances, the net result for 1982 across all the syndicates, including all profits and losses made, would have to be included for the purpose of assessing the loss suffered for underwriting in that year.

Secondly, it is axiomatic that each syndicate at Lloyd’s is a separate annual venture which is formed, writes business for a year and is then dissolved when the outcome of the business is finalised by the process of reinsurance to close, whether this is done in the ordinary way by reinsuring with a later year syndicate of the same number, with other Lloyd’s syndicates or with external reinsurers. The composition of syndicates changes on an annual basis and Names decide each year whether or not to maintain, increase or reduce their lines on a syndicate. RITC to “successor” syndicates proceeds on the basis that a syndicate for a given year, composed of identified members reinsures into a syndicate of a succeeding year, composed of identified persons (some of whom will almost inevitably be different from those of the reinsuring syndicate). The 1982 syndicate writes inward reinsurance, both from external sources as part of its business and inward RITC. Equally it reinsures out its liabilities both to external reinsurers as part of its business and by way of RITC. It is beyond argument that it is the net result for the 1982 syndicate in question which matters, taking account of all inwards and outwards business including inward and outward RITC. Thus if there are closed year accounts for 1982 syndicates, those closed year figures represent the totality of loss in respect of the 1982 year of account and it is the totality of the figures for the 1982 years of account for the syndicates in which any Name underwrote that constitutes the figure for which damages can be claimed, subject to the addition of figures in any 1982 syndicates which kept the year open, without RITC.

It is accepted and indeed it is self-evident that, where a 1982 syndicate remained open and did not effect RITC, all the losses which occur subsequent to the 1982 year on business written in 1982 are attributable to the 1982 year underwriting and must be brought into account. It is equally obvious that, where a 1982 year remains open, the succeeding syndicates with the same number or syndicates into which such syndicates merge, cannot have losses which are attributable to the open year of 1982.

The illogicality of the Names’ position is exemplified by the fact that the whole basis of their claim is the result of reinsurance to close from earlier years which has resulted in asbestos liabilities written in general liability policies many years earlier, long before any of these Names were underwriting, resulting in substantial payments in the years in which they did underwrite. The complaint is made about the decisions to effect RITC but the effect is clear. With syndicates with closed year accounts for 1982, with RITC in and out, it is the 1982 figure in the closed year accounts which matters. To this must be added the figures for the 1982 syndicates which have remained open. There is therefore no basis for including in the calculations of loss attributable to membership of a syndicate in 1982 the losses suffered by a Name as a member of the 1983 year of account or any succeeding years. By definition these are not attributable to the Name’s membership of the 1982 year of that syndicate but to his membership of the 1983 syndicate or succeeding year syndicates, reflecting the outcome of inwards and outwards contracts, including RITC, undertaken on behalf of those later year syndicates.

It is not right to say that any Name’s liability to make a payment in 1986 on a successor syndicate is the payment of that Name’s primary liability for business written in 1982. In practice, the loss-making business was actually written long before and the primary liability on the insurance or reinsurance to the original insured or reinsured rested on the Names who wrote the policy between about 1950 and 1980. Further, the liability for the 1982 Names arose by virtue of their Agents’ subscription to RITC in respect of the preceding year with a string of RITCs back to the time of the original policies. Equally, the liability of the Name in 1986 when he had a line on a differently constituted syndicate (whatever its number) arises from the acceptance by his Agents in 1986 of RITC from the previous year and the string of RITCs back to 1982.

It is clear that whatever losses are incurred by a Name in underwriting years subsequent to a closed 1982 year, do not occur by reason of his membership of the 1982 year or by virtue of any operative misrepresentation made to him which induced him to join, continue or not resign from underwriting for the 1982 year. If a Name is liable on 1983 and following years by virtue of a misrepresentation by Lloyd’s, it can only be on the basis that that misrepresentation was made or continued and operated on his mind to induce him to join, continue or not resign from underwriting for the 1983 or succeeding years. The point in time at which the misrepresentation operated, reliance occurred and a cause of action arises in respect of the losses on those years is therefore entirely different from that which arises in relation to loss in the 1982 year.

With this point of principle decided, the other inconsistencies in the Names’ calculations of losses fall away, such as calculating loss on an increased line in a successor syndicate or on the basis of a different syndicate share, because of the altered size of the differently constituted syndicate in that year. Equally, where the actual cost of reinsuring open years into Equitas has been incurred, that premium falls to be taken into account in any calculation rather than any estimate of the future deterioration of the syndicates. Self-evidently, there can be no basis upon which both would be claimable in any event.

In these circumstances, Lloyd’s are unarguably right in saying that the loss suffered by a Name as a result of an operative representation and a commitment to underwrite on the 1982 year of account, within the window, falls to be calculated as follows:

All of Mrs Bowman’s syndicates were closed at the end of 1982. The calculations show that Mrs Bowman made a profit overall for her 1982 year account, if all syndicates in which she underwrote are included. The profit figure is £8155. On this basis Mrs Bowman simply has no claim , let alone one which would equal or over-top the Lloyd’s Statutory Demand of £232,311. (Quite apart from the basic principle, it is anomalous that Mrs Bowman’s calculation does not even include the 1982 figures in the overall calculation of losses which depend upon the 1983 and 1985 – 1992 losses).

In the case of Mr Drysdale, his calculation shows losses of £2,800 in respect of his 1982 year underwriting (at the time when most of his syndicates closed the 1982 year). This includes three syndicates which were left open at the end of the year, being syndicates 89, 700 and 126 and reflects their actual loss at that point. His calculation leaves out of account profits of £15,844 in the 1982 underwriting year. The correct way of ascertaining his loss is to take the total of his 1982 year underwriting, consisting of the final figures for the closed syndicates and the figures for the three 1982 year syndicates which remained open, adding to them the premium for reinsurance into Equitas.

There are other syndicates upon which Mr Drysdale wrote in 1982 which do not form part of his calculation, four of which were profitable and one of which incurred losses. Leaving aside the 1982 open year syndicates, the total profit for Mr Drysdale’s underwriting on the 1982 closed years was £13,088.50. To this must be added the open year figures for syndicates 89, 126 and 700. Mr Drysdale’s calculations add in losses amounting to £232,518 (if my mathematics is correct) in respect of syndicates 89 and 126 but do not give any figures for syndicate 700. Lloyd’s calculations are entirely different. In respect of the open years of the three syndicates, Lloyd’s gives the cumulative result in accordance with the 1993 League Tables published in September 1996 which includes the reinsurance premium to Equitas. The total cumulative result for Mr Drysdale on these open years amounts to a loss of £49,004.00 which, when set against his 1982 underwriting profit makes for a figure of £35,915.50. I am unable to see how the figures can be so completely different on the open years and require to be further addressed on this subject. If Lloyd’s are right in the figures they put forward, which appear to be based on public results, there is no possibility that Mr Drysdale’s claim, even with interest could equal or over-top the Statutory Demand of £310,504. If however there is any substance to the Names’ own calculation, there is a possibility that, with interest, the figure could be surpassed. I have refused Mr Drysdale permission to amend for other reasons but it may be that, once the figures are explained, it will be seen that his case is arguable on the figures even if not arguable on other grounds.

Where Dr Woyka is concerned, it is common ground that if his claim is calculated on any basis other than all losses on all syndicates from 1982 onwards, his claim cannot equal or over-top the Statutory Demand of £102,209. On his own figures, leaving out of account the profitable syndicates upon which he wrote in 1982, the total losses for the two loss making closed year syndicates in 1982 and on syndicate 126 which remained open from 1982 to 1992 amounted to £21,112. On Lloyd’s figures, his total result for the 1982 year is a loss of £4355.77.

For the above reasons the only Names who succeed in obtaining permission to amend are Messrs Allard, Garrow, Hardman, Ranald, Remillard, Wilkinson and Woyka. Permission to amend for all the other Names is refused. It seems to me that in a contested application of this kind, costs must follow the event in relation to the Names who have succeeded and the Names who have failed but I make no final Order in this respect in case there are special factors relating to costs upon which the parties may wish to address me. If directions can be agreed between the parties for the future conduct of the action of the seven Names who have succeeded in their application, this would be helpful. Whether or not agreement is reached, I would propose to make directions immediately following this Judgment.