The Society of Lloyd's v Elizabeth Mary Levy & Ors

A directive regulating insurance supervision does not, without clear language, confer directly enforceable rights on insured persons or Names against the regulator. Mentioning Lloyd’s in the directive identifies it as an undertaking within the regulatory system; it does not make Lloyd’s an emanation or agent of the State. Procedural rules, limitation periods and abuse of process may prevent a late European-law challenge where the party has had a proper opportunity to advance it. An unregistered assignment of book debts remains effective against the debtor unless insolvency or administration provisions are engaged. Contractual records may be conclusive in the absence of manifest error.

The Society of Lloyd’s sought summary judgment against Dr and Mrs Levy and Mr and Mrs Johnson for unpaid Equitas renewal premiums assigned to Lloyd’s by Equitas Reinsurance Limited. The defendants sought permission to amend their defences, disclosure and inspection, and a reference to the European Court of Justice.

The proposed amendments raised European Directive 73/239, stamp duty, registration of the security assignment and, for the Johnsons, the quantum of the claim. The European-law arguments arose against the background of earlier Lloyd’s litigation, including the Jaffray proceedings. The central issues were whether the proposed points were arguable and whether any required a reference.

1. European Directive. The directive was directed to Member States arranging supervision of insurance undertakings and establishing common trading rules. It did not confer directly enforceable rights on insured persons or Names to complain about inadequate regulation. The protection of end-users derived from the regulatory scheme rather than from an individual right created by the directive.
2. The references to Lloyd’s in the directive reflected its special position as an insurance provider. They did not make Lloyd’s a delegate, organ or agent of the State. Lloyd’s was regulated by the Department of Trade and Industry and was essentially non-governmental. The Court of Appeal’s decision in R v Lloyd’s on the application of West [2004] EWCA 506 supported that conclusion.
3. The proposed European-law case was also too late. The relevant events occurred during the ten years before 1988, and the defendants had previously had opportunities to raise the point. Limitation rules, abuse of process and res judicata were not incompatible with Community law. Köbler v The Austrian Republic Case C-224/01, [2004] 2 WLR 976 did not establish otherwise. The issue was acte clair, so no reference was appropriate.
4. Stamp duty. There was no evidence that the original deed was unstamped. The stamped executed Completion Agreements were apt to prove the assignment, and the court would not question the Stamp Office’s adjudication. Permission to amend was refused.
5. Registration. Section 396 of the Companies Act 1985 made an unregistered charge void against a liquidator, administrator or relevant creditor, but did not invalidate it against the debtor of a solvent company. The defendants therefore had no standing to resist payment on the basis of non-registration.
6. Quantum and result. The Lloyd’s Central Services Unit records were conclusive in the absence of manifest error. No such error was shown. Permission to amend was refused, there was no arguable defence, and judgment was entered for Lloyd’s on its claims.