Subject: Jaffray v Lloyd's trial

Date: 20 July 2000

Mr. Justice Cresswell: Does that conclude everything you want to say, Mr. Goldblatt? There is one general point I want to raise with you.

Mr. Goldblatt: I feel I have our closing submissions as comprehensively as I ought to at this stage.

Mr. Justice Cresswell: I’m very grateful for that. The point I would like to raise with you is this, and it may be that you will want to come back to this in reply: you do, at one point in your written submissions, make reference to the fault lines in Lloyd’s.

Mr. Goldblatt: Indeed.

Mr Justice Cresswell: It is very easy to get involved and [end page 8982 of transcript] become immersed in the detail, and not stand back from what’s happened, and I don’t know whether in reply you are going to make any submissions on this aspect of the case. Leave aside the allegations of fraud for the moment, which has been the focus of this court’s attention. The fact of the matter is that, if one adds up the admitted failures, frauds, fault lines, the position in the 1980s was quite extraordinary. Equally, this court has been concerned with what is the biggest piece of civil litigation our jurisdiction has ever seen. I provided you with a list of the decisions.

Mr. Goldblatt: Indeed.

Mr. Justice Cresswell: Do you have any general submission to make – leave aside fraud for the moment – about Lloyd’s in the 1980 and the general competence of those involved and what was actually happening, because here we have an institution which ha been regarded as one of the great commercial institutions of this country and yet we have seen this enormous tranche of litigation. Sadly the Market settlement did not resolve it. You represent a large number of people who are plainly discontented, havoc has been wreaked on people’s lives on both sides. On the Names side there have been suicides, people have lost their homes, etcetera, etcetera. On the Lloyd’s side numerous agencies have been wound up, there have been their personal [end p. 8983] tragedies as well. Why did all this happen? Why is it that we see these extremely deep rooted problems reflected in the litigation? It’s not simply a matter of asbestos, we have pollution, we have LMX, but do you have any general submissions to make about failure to have regard, for instance, to elementary principles in relation to insurance, dispersal of risk? Further, there are aspects of the litigation the Court has not penetrated, personal Stop Loss syndicates are a matter which have never been investigated in any decided case so far as I know, and there was a reason for that in that it was felt in the planning of the litigation that it was necessary first of all to look at LMX and then at long tail before looking at personal Stop loss, and the Market settlement came before we tried a personal Stop Loss case. Why is it -- I will put a similar question to Mr Aldous -- why is it that in the year 2000 we are still debating the problems of the 1980s? Why were there so many failures in the 1980s?

Mr Goldblatt: My Lord, it is a question which admits of an enormously broad and lengthy answer and I’m going to try very hard to avoid the temptation to answer at length. We did try in our submissions to address the nature of the fault lines in a way which was detached from the case in fraud, because it was important and it is important - to recognise that these fault lines existed. [end p. 8984]

20th July 2000