THE proposed restructuring of Lloyd's of London breaches the fundamental principle behind the insurance market - that Names should be responsible for their own losses, the London High Court was told yesterday.
In a judicial review challenging the legality of the "reconstruction and renewal" proposals put forward by the council of Lloyd's, Names claimed the plans were unlawful because they meant some Names - individuals whose assets have traditionally supported the market - would be subsidising losses incurred by others.
The case is being brought by the Paying Names Action Group which claims its members are being unfairly discriminated against because they paid all their debts following the large scale losses incurred at Lloyd's in the 1980s.
The council of Lloyd's strongly opposes the case, saying the reconstruction proposals could be wrecked if it succeeded.
Should Lloyd's lose the judicial review, it would take the case to the Court of Appeal as quickly as possible, probably next Tuesday. The deadline for Names accepting the proposals is August 28th. The question of the legality of the restructuring plans must be finally settled before then.
