Bloxham insurance case back in court

The legal action by the liquidators of stockbroking firm Bloxham over alleged underinsuring of the firm has resumed at the High Court after efforts to mediate failed.

The sides had last week taken up a suggestion by president of the High Court, Mr Justice Nicholas Kearns, to consider mediation but they told the judge yesterday that it had not worked and the case was proceeding.

The liquidators have sued the firm’s former insurance broker, Robertson Low, for more than €15 million damages arising from Bloxham allegedly being “chronically underinsured”. Although the firm paid some €16 million in settlement of claims by clients related to certain Saturn Dresdner investment bonds, the total sum recovered from its insurers was one-tenth of that, the court heard.

The liquidators claim Bloxham believed in 2007 it had insurance cover on the basis of up to €3 million a claim, but it turned out the total cover for all claims was €1.27 million. This was in a context where the firm’s business was expanding and it had more than €1 billion under discretionary management by 2008 for fees of €35 million, the court was told.

Robertson Low has denied the claims, insisting Bloxham understood the cover it had and that the firm’s concern at all times concerning insurance was the price.

Bloxham was placed in liquidation in 2012 on foot of a petition by the firm’s partners. The court was told one reason for that was because the firm was subject to claims by former clients arising from the sale of investments known as the Saturn Dresdner bonds.

Bloxham sold up to €30 million of these bonds and later agreed to pay almost €16 million in settlement but received just €1.6 million from its insurers, Novae, it was stated.