In Equitas v. Walsham Bros, the Commercial Court ruled on a number of key legal issues concerning the duties owed by Lloyd's brokers to remit funds promptly to clients and to reinsurers.
Equitas is the successor to Lloyd's syndicates writing non-life insurance business for the 1992 and all prior years of account. Equitas' case was that Walsham ought to have remitted substantial funds which it had received, either to the syndicates themselves before September 1996 or to Equitas thereafter, and that as a result of its failure to do so Equitas had lost substantial investment income. The funds broadly fell into two categories. First, client funds which Walsham had received from reinsurers or retrocessionaires in payment of claims or by way of returns of premium. Secondly, reinstatement premiums for passing on to reinsurers or retrocessionaires. Equitas' total claim amounted to about £14.9 million, of which about £11.8 million represented a claim for lost investment income. Walsham did not accept that it failed to make the payments claimed by Equitas, but it claimed that the evidence of payment had now been lost. Walsham also argued that Equitas' claims were time-barred in any event.
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