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Court hopes dented for Lloyd's Names
Andrew Osborn in Brussels
Disgruntled investors looking to the European commission for action over the near collapse of the Lloyd's insurance market in the 1990s had their hopes dashed yesterday.
The investors, or Names, have been pressing Brussels to take the UK government to court for its allegedly lax regulation of the Lloyd's insurance market for the past four years - so far without success.
Their rationale is compensation - if a European court were to rule against the government the Names believe they would have a legal basis to sue the UK authorities for shoddy regulation and win. They want £8bn in compensation which is the amount they say they lost between 1989 and 1994 after Lloyd's discovered it had not made sufficient provision for asbestos claims from the US and Canada.
The commission delighted Names last December when it sent a formal letter of warning to the UK government over the issue - the first step in a legal process which can end in court action and a large fine - but yesterday it backed away from confrontation. Although it did not rule out further legal manoeuvres, Brussels said its primary interest was whether present UK regulation is lax and not whether the obsolete legislation that is alleged to have let down the Names was flawed.
"The commission does not sit in judgement over some thing which happened twenty years ago," Frits Bolkestein, EU commissioner for the internal market, told a special hearing at the European parliament.
"We are not a court of law. (You) may be disappointed that the end result is not what you are looking for," he told Names. Brussels would, he added, make a final decision before the end of the year but he said that on first glance revamped financial services legislation in the UK showed "clear improvements".
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