Lloyd 's is planning to sue insurance brokers Benfield and Aon in a £325m compensation claim over its
long-running Central Fund dispute.The insurance market said it was pursuing legal action against the brokers for their part in arranging the reinsurance policy for the fund.

The dispute began in April 2003 when six reinsurers refused to pay claims.

Swiss Re,St Paul,XL Re, Federal Insurance Company, Hannover Re and Employers Re claimed the policy had not been affirmed and they were not legally bound to pay up.

Lloyd 's reached a £152m settlement with the insurers following arbitration in March 2005.

Now Lloyd 's plans to claim the shortfall of £325m from the brokers who placed the policy,Benfield and Aon.

Lloyd 's general counsel Sean McGovern said:"We are now actively pursuing this claim through the courts.

"This is not a decision that has been taken lightly and follows discussions with Aon and Benfield."

The brokers said they were disappointed with Lloyd 's decision and would defend any action "vigorously ".

A Benfield spokesman said proceedings would not result in a material liability to the company or professional indemnity insurers.

A market source said that an internal inquiry into the part senior Lloyd 's executives played in arranging the Central Fund policy would be unnecessary due to the number of executives who had already departed.