Doll-Steinberg v Society Of Lloyd's

When assessing an applicant’s ability to pay under a hardship or settlement scheme, a panel may consider relevant past financial dealings as well as present assets and income. The assessment is not necessarily confined to the applicant’s current ability to pay. Where the scheme’s terms require consideration of changes in circumstances and relevant means-assessment factors, the panel may take account of past dispositions of assets, particularly dealings during a period when liabilities were foreseeable. Such matters are not irrelevant considerations merely because they pre-date the application. A decision based on that approach will not be susceptible to challenge as Wednesbury unreasonable where the panel was entitled to take the matters into account.

Gerda Adele Doll-Steinberg, a Lloyd’s Name, appealed against Stanley Burnton J’s refusal of permission to apply for judicial review of a decision by the Lloyd’s Settlement Offer Panel. The panel had offered to reduce her liability to £59,300. In assessing her application for hardship assistance, it had taken account of her 1995 sale of a quarter share in a property to her husband for £59,300, although she said the proceeds had been spent on living and medical expenses.

The judge held that the panel was entitled to consider past dispositions of assets and that the proposed claim disclosed no arguable merits. The central issue in the Court of Appeal was whether the panel’s terms of reference confined it to the applicant’s present ability to pay, or permitted consideration of earlier financial dealings.

1. Application refused. The court considered the merits first, because it would be undesirable for a jurisdictional objection to defeat a claim that might otherwise have merit.
2. The panel’s terms of reference identified ability to pay as the underlying concept, but required it to establish criteria by reference to relevant factors used in earlier means-related assistance assessments, together with changes in circumstances since the reconstruction and renewal arrangements. The terms also referred to reasonable housing and minimum income needs.
3. Read in context, those provisions entitled the panel to consider the applicant’s financial history, including the manner in which assets had been dealt with during the period when Lloyd’s liabilities were foreseeable. The applicant’s past disposition of property was therefore a relevant consideration, even though the assessment concerned her ability to meet the liability.
4. The panel had not applied an impermissible test or acted irrationally in taking the disposition into account. Even assuming that the decision was amenable to judicial review, the application could not succeed on the merits.
5. Simon Brown LJ expressly agreed with Latham LJ, Stanley Burnton J and Laws LJ’s assessment that the panel was entitled to consider matters beyond the applicant’s actual present ability to pay.

• High Court, Queen’s Bench Division, Administrative Court: Stanley Burnton J refused permission to apply for judicial review, holding that the court lacked jurisdiction and, in any event, that the proposed claim had no arguable merit.
• Court of Appeal (Civil Division): The application for permission was refused. Latham LJ gave the principal reasoning, and Simon Brown LJ agreed.