Lloyd's of London must defend itself for a second time against claims that it fraudulently recruited more than 220 Names in the 1980s.

The Names accuse 33 members of the Lloyd's Market Committee of playing down the extent of asbestos-related losses totalling more than £4bn.

When the Names became financial backers of Lloyd's, they accepted unlimited liability and now owe £50m following thousands of asbestos-related claims from the US.

Although the insurance market was cleared of fraud in the High Court last November, three judges in the Court of Appeal said there were "compelling reasons" why the court should look again at the evidence.

Co-chairman of the United Names Organisation (UNO), Catherine Mackenzie Smith, said: "This is awkward for Lloyd's. We are delighted though not very surprised, as it was clearly a poor judgment."

Lloyd's chief executive Nick Prettejohn said: "The Court has made it absolutely clear that its decision is nothing to do with the merits of an appeal, it is simply a reflection of the huge volume of evidence and length of time required to make any hearing of the arguments meaningful."

The appeal will take place in January and will further add to the £20m already spent by Lloyd's in defending its case.