Current Law Cases

Scope

deceit; Lloyds Names; misrepresentations by Lloyds as to auditing procedures

Case

Jaffray v Society of Lloyd's

Court

(CA) Court of Appeal

Jurisdiction

Judgment

July 26, 2002

Judges

Waller, L.J.; Clarke, L.J.; Robert Walker, L.J.

Legislation

Insolvency Rules 1986 (SI 1986 1925) r.6.5(4)

Reported

[2002] EWCA Civ 1101; (2002) 146 S.J.L.B. 214

Reference

Abstract

J appealed against a finding that L was not liable in deceit. J became a name at L in 1981 and was chosen to pursue a lead case on behalf of other names in this action. J contended that L had deliberately concealed from him when he became a name that there were "unquantifiable but potentially massive claims in the pipeline" related to asbestosis for which no proper reserves had been made. J alleged that L had made representations in its brochures that its audit procedures were "rigorous", but that that was not the case and that L was aware that it was not the case. J argued that he became a name in reliance on those representations and that he had suffered significant financial losses as a result. The trial judge found that no such representations had actually been made in the brochures and that even if they had been made, there had been no fraud. J appealed.

Held, dismissing the appeal, that J had not shown that L was liable in deceit. The judge had been wrong to find that no representations had been made, as false representations had been made in brochures at the relevant time about the integrity of auditing procedures. However there was no evidence that L had known or believed that, or had been reckless as to whether, the representations were untrue.

Subject

Insurance

Keywords

Deceit, Knowledge, Lloyds Names, Misrepresentation, Recklessness, Underwriters

Counsel

For G: Charles Purle Q.C. and Lawrence Jones. For SL: Edward Bannister Q.C. and Lexa Hilliard

Solicitors

For G: Grower Freeman & Goldberg. For SL: Society of Lloyd's

Transcript

A3/2000/3863A, A3/2000/3863B, A3/2001/2013/A, A3/2002/0069, A3/2002/0069B, A3/2002/0069C, A3/2000/3863, A3/2001/0162, A3/2001/0957, A3/2001/1913, A3/2001/2013, A3/2001/0163

Sub nom

Society of Lloyd's v Jaffray