More than 30 Lloyd's of London "Names", some owing more than £1m each, face bankruptcy after losing a key court case against the world's oldest insurance market.

The High Court yesterday ruled against 49 individuals who claimed that they had been misled when taking out contracts prior to the near collapse of Lloyd's in 1992.

They alleged that Lloyd's brochures had led them to believe that the cover, called Reinsurance To Close (RITC), completely ended their liabilities at the end of each underwriting year.

However, Justice David Steel said these contracts were, in fact, simply reinsurance policies, rather than a transfer of liabilities.

"No deliberate concealment of Lloyd's different view of the legal effect of RITC can possibly be made out," he said. "The entire claim must, in my judgment, be struck out."

Sean McGovern, Lloyd's general counsel, said this was the last major piece of litigation against the insurance market following a bleak period in the 1980s and 1990s, when spiralling asbestos claims almost brought it to its knees.

The so-called "Names" - private individuals who originally agreed to take on the liabilities associated with insurance risks in return for any profits made from premiums - have spent years battling against Lloyd's in the courts.

"Today's judgment is a victory for Lloyd's," Mr McGovern said. "It will help us close a chapter in our history and we hope it is the end of a decade of failed litigation brought by the Names. A small number of Names have continued to bring claims which have been repeatedly rejected by the courts."

Grower Freeman, the law firm which brought the case on behalf of the Names, said it would seek to overturn the ruling at the Court of Appeal.

Partner Michael Freeman said his clients had been ruined by the "very disappointing" High Court judgment as a number of them owed over £1m each to Lloyd's.

"Thirty out of the 49 names have bankruptcy proceedings against them," he said. "We are hoping that the Court of Appeal will reverse it on the basis of people should be able to believe what they are told."

The High Court ruled that the Names should pay £250,000 collectively towards Lloyd's legal costs within 28 days, with full costs to be determined at a later stage. The two individuals who brought the case on behalf of the Names were Heather Adams and David Harris.


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