Rich UK Names targeted to bolster asbestos claims fund
US lawyers are preparing to sue the richest and most high profile Lloyd's Names, including members of the Royal Family and MPs, should Equitas declare proportionate insolvency.
The lawyers are convinced that Equitas will be insolvent in less than four years because of the rising cost of asbestos-related claims. The legal strategies being prepared will come into play if Equitas, and then Lloyd's, are unable to pay claims in full.
John Sylvester, an insurance litigator with US firm Kirkpatrick and Lockhart, said: "You don't go after all of the Names, you try to find any high profile Names and hope that by pressuring them, there will be a quicker resolution."
"It's just one of many strategies for trying to get full payment of your claims if Equitas is only offering partial payment... a way of trying to put pressure on the government, or on people with authority, to come up with some plan."
Richard Fields, managing director of Global Risk Strategies, a firm that specialises in avoiding claims litigation through settlement, confirmed that wealthy Names were a target for US lawyers: "There will be so many American lawyers trying to do that... the dollars are just too big. You're talking about pushing, even at the lowest, $50bn (£32bn) worth of [asbestos-related] losses through the global insurance market."
He added: "Until the last nickel is squeezed out of people who signed under those policies, there are going to be American lawyers out there who are pursuing them. I thank God every day that I'm not a Name."
In its results for the year to March 2002, Equitas said that if asbestos claims continued at their current rate, it could continue paying claims for just over 23 years. Last year, it paid £269m in claims.
Fields said he had estimated Equitas' net asbestos reserves at £3bn. "I just don't believe that money is going to last very long. I have one client whose liabilities are a third of that," he said.