Lloyd's investors start action against Treasury claiming breach of responsibilty
Lloyd's investors are likely to fail in their High Court bid to sue the Treasury for more than £1bn, according to legal experts.
More than 1,000 Lloyd's Names began proceedings this week claiming that successive UK governments breached their responsibility under a European insurance Directive for more than two decades, leading to significant losses in the late 1980s and early 1990s.
But Charles Gordon, head of insurance and reinsurance at law firm DLA Piper, described the action as "a last throw of the dice" after previous claims by Names against Lloyd's failed at the European Court of Justice and the High Court.
Gordon said: "My view would be that they have a real uphill struggle to establish a right to bring a claim, and an even greater struggle to demonstrate they have a right to damages."
The first of four trials, which will determine whether the individuals are allowed to bring actions against the government under the European Directive and if so, whether the claims are time-barred, is expected to last for a number of months.
If successful, the case is likely to take several years.
Gordon said: "If they get over this first stage and establish the right to bring a claim you will probably find a lot more Names will join in. They will be hoping to swell the numbers very considerably."
The Treasury strongly refuted the allegations that it "failed to properly regulate the Lloyd's market".