April 23, 2005
Riccardo Blogspot
On 18th March 1994, Minister Michael Heseltine, then Secretary of State for Trade and Industry admitted his department received the Neville Russell letter that put UK Govt on notice of the incalculable liability for asbestosis claims. Obviously this was a significant factor affecting the adequacy of Lloyd's reserves. Although the Minister does not state when he received the letter, if the DTI received it after 1982 we would have expected the Secretary of State to disclose when it was received. The fact that he does not, indicates that the DTI received the Neville Russell letter contemporaneously, and was therefore aware of the solvency problem at Lloyd's prior to final approval of the Lloyd's Bill on 23rd July 1982.
Significantly, the Heseltine letter confirms that the DTI did accept ongoing responsibility for regulation of Lloyd's under the ICA 1982, both before and after the passing of the Lloyd's Act, stating inter alia: "this degree of uncertainty does not affect the discharge of my responsibilities under the Companies Act in relation to Lloyd's, nor would it have done in 1982."
Mr Heseltine's admission of liability (on behalf of UK Govt) is exacerbated by the failure of the DTI to intervene to notify Parliament before the Lloyd's Bill received Royal Assent on 23rd July 1982, or to intervene thereafter by ensuring that the Neville Russell letter be included in Lloyd's Global Reports & Accounts. It is noteworthy that statutory immunity under the Lloyd's Act was conditional upon a promise to Parliament to maintain E&O cover at all times, the breach of which occurred in 1991 has still to lead to a suspension of those legal privileges.
In concert with its external regulator, deliberate non-disclosure in Lloyd's accounts has resulted in the defrauding of Lloyd's investors, who relied upon those Accounts when deciding whether or not to join Lloyd's or to increase, decrease or terminate their underwriting commitments. It is axiomatic that those people who invested in Lloyd's in the 1980s would not have done so if they had known the true financial position. The government was under a duty to ensure investors were properly informed but chose instead to abdicate its responsibility. Since UK Govt has admitted liability as external regulator, Investors now require settlement of their compensation claims.
http://riccardo35.blogspot.com/2005/04/lloyds-audit-fraud-uk-governments.html