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New Litigation Filed Against U.S. Attorneys For Underwriters/Names At Lloyd's Of London, Announces American Names Association, Inc.
February 16, 1999
New York, Feb. 16 /PRNewswire/ -- The law firms of Lord, Bissell & Brook and Mendes & Mount have been served with a complaint, filed on February 8, 1999, in the Supreme Court of the State of New York. The complaint has been filed and served on behalf of thirteen (13) plaintiffs who were investors in the loss-ridden Lloyd's of London insurance market. Investors in Lloyd's syndicates are commonly referred to as "Underwriters" and/or "Names."
Plaintiffs in Anthoine vs. Lord, Bissell & Brook and Mendes & Mount allege in their complaint that the defendant law firms, long-time U.S. attorneys for Underwriters/Names at Lloyd's of London, have: 1) committed legal malpractice; 2) breached fiduciary duties owed to plaintiffs; 3) aided and participated in breaches of fiduciary duties owed to plaintiffs by others; 4) violated New York General Business Law (deceptive acts and practices); 5) committed common law fraud; and 6) engaged in an unlawful conspiracy.
Jonah Orlofsky, plaintiff's attorney from the firm of Plotkin, Jacobs & Orlofsky, describes Anthoine vs. Lord, Bissell & Brook, et al. as "a case that targets the U.S. attorneys who have represented Names in numerous insurance claim defense cases over many years."
"Exhibits filed in Anthoine vs. Lord, Bissell & Brook, et al. reveal long- suppressed documentary evidence of fraud and conspiracy, including more than 20 years of fraudulent syndicate accounting and reserving at Lloyd's," commented Jeffrey C. Peterson, Executive Director of the American Names Association (ANA). The ANA is a non-profit association dedicated to serving the interests of defrauded U.S. Names.
Anthoine is one of four U.S. legal cases pending against third-party professional firms that allegedly aided and abetted Lloyd's in perpetrating fraud on Lloyd's U.S. Names. The other three lawsuits are against third-party defendants including: Citibank (Lloyd's bankers), Ernst & Young (Lloyd's auditors), and LeBoeuf, Lamb, Greene & MacRae (Lloyd's Names' U.S. attorneys). All of these cases are moving forward in various U.S. courts.
The 310-year-old Lloyd's of London insurance market is not an insurance company. Rather, it is a constellation of syndicates that independently insure risks and operate worldwide under a common trade name and broker network. Syndicates operate as annual ventures backed by Names.
Between 1991 and 1995 the Lloyd's market as a whole reported devastating losses. Lloyd's own (unaudited!) figures showed the losses to be in excess of $14 billion. However, the May 13, 1995 New York Department of Insurance (NYID) audit of Lloyd's U.S. situs trust funds revealed a reserve deficiency of more than $18 billion. The NYID audit only covered the reserves for Lloyd's U.S. dollar denominated business, which is about 40% of its worldwide business, according to Lloyd's.
In recent years, numerous legal actions have been filed in U.S. courts against the Corporation of Lloyd's. Nearly all of these cases against the Corporation of Lloyd's have been dismissed and sent to the U.K. courts to be heard. The cases were dismissed based on forum selection clauses that stipulated to U.K. jurisdiction for resolving disputes between Names and Lloyd's. The forum clauses were first inserted into Names' investment contracts in 1987.
U.S. Names are at a severe disadvantage in U.K. courts for two reasons: 1) England has much weaker investor protection laws; and 2) Lloyd's secured self- regulatory status and almost complete immunity from lawsuits under a Private Act of Parliament in 1982.
"Attempts by third-party defendants to use Lloyd's forum selection clauses to dismiss cases brought by Names have failed in U.S. courts. This precedent has thus far been set in the cases against Citibank and LeBoeuf," said Peterson.
Documents and court filings for legal cases mentioned in this news release are available from the following sources:
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