Lloyd's is threatening to recover money it paid out to travellers following the collapse of The Management Company London (TMC).

In June, the insurance intermediary TMC was placed into liquidation by the Department of Trade and Industry. An estimated 150,000 people were thought to be without cover following reports it was issuing policies bearing the Lloyd's name without authority.

Since then, Lloyd's has paid out for claims from its central fund. But a court ruling last week said Marlborough-managed syndicate 1242, which originally underwrote the insurance, “never became a party to the binding authority” with Lloyd's broker Morgan Read Sharman between August and December 1999.

Lloyd's spokesman Adrian Beeby said: “Lloyd's will pay for all valid claims, but it is our aim to find out who is responsible, even if that means going through arbitration processes.”

The court ruled “no useful purpose would be served by attempting to hold a further hearing in September, unless those interested in the litigation so wished”.