Member states should sue UK over Lloyd’s, says MEP

Date: 27/02/03

By Peter Chapman

COUNTRIES home to bankrupt victims of the Lloyd's of London insurance market should be on standby to sue the UK government if the European Commission fails to take action, the MEP leading a European Parliament probe into the issue said.

UK Tory Roy Perry told European Voice that it may be the last chance for ruined investors or "names" in the world famous insurance market to get compensation for the losses they claim they incurred because of alleged lax regulation of Lloyd's.

"It may well be that there are other national governments that might want to get involved - such as the Danes, Germans and Irish," said Perry, explaining that many Lloyd's "victims" live in these countries.

"If the Commission for all sorts of reasons won't go to the European Court of Justice then a national government could."

Perry's comments come as the Commission continues to ponder what to do next after its own investigation into the UK's supervision of Lloyd's.

Frits Bolkestein's internal market department issued a missive in December 2001 following complaints that the British government failed to spot cracks in the Lloyd's audit system. Officials are currently awaiting a reply from the UK to two further legal warning letters concerning the adequacy of a new regime for Lloyd's and the "Equitas" unit it set up to ring-fence losses from asbestos claims.

But names fear the change of focus from past to current regulation at Lloyd's could signal that the Commission is more concerned with ensuring the market is properly regulated today than justice for past failings.

That could make it difficult for them to win compensation for losses they incurred.

Perry, a member of the Parliament's petitions committee, will urge the Commission to press ahead with court action at a hearing next month.

Countries which are home to bankrupt victims of the Lloyd's of London insurance market should be on standby to sue the UK government if the European Commission fails to take action, the MEP leading a European Parliament probe into the issue has said.