Lloyd's of London Names have launched a £1bn class action against the Treasury over huge losses from a series of disasters in the 1990's.
The Names are arguing that the Treasury had a duty to regulate the Lloyd's market under a European Directive, 73/239.
This directive requires European-based insurers to have adequate reserves to cover liabilities for non-life claims.
The losses stemmed mainly from asbestos-related claims but the Lloyd's Names were also exposed to disasters such as the Piper Alpha oil platform explosion in the North Sea.
The Names failed to win cases against Lloyd's for these losses, which cannot be sued under its rules except for fraud.
Yesterday marked the first day of the case. In the initial stage, the Names must convince judges they have the right to bring the case under the EU directive and are not "time-barred".
