The Society of Lloyd's v Richard A Tropp

Contractual service of proceedings is valid under Civil Procedure Rules 1998, Part 6.15 where the contract specifies the method of service and the English court has jurisdiction. The agreement may be made by an authorised agent; the principal need not personally appoint the service agent. A clause providing for service on an agent in England is not unusual or improper where it is a reasonable procedural adjunct to an English law and jurisdiction clause. An agent’s connection with the claimant does not, without more, invalidate the appointment. Where the agent’s function is purely ministerial, actual conflict of interest principles do not apply. The clause may cover claims arising directly from the contract, including claims for unpaid reinsurance premium.

The Society of Lloyd’s claimed payment from Richard A Tropp under a reinsurance and run-off contract. Mr Tropp, a United States citizen not domiciled in the United Kingdom, applied under CPR Part 11 to set aside service and dismiss the claim. The claim form had been served in England on Additional Underwriting Agencies (No. 9) (“AUA 9”), which the contract identified as the substitute agent for service.

Mr Tropp argued that AUA 9 did not exist, lacked authority to accept service, and could not act because it was controlled by Lloyd’s. The central issues were whether AUA 9 existed, whether the contractual service clause bound Mr Tropp, whether it extended to Lloyd’s claim for unpaid premium, and whether any conflict of interest invalidated service.

1. Application dismissed. The claim form had been validly served on AUA 9.
2. Under Civil Procedure Rules 1998, Part 6.15, service pursuant to a contractual provision is good service where the English court has jurisdiction, the claim concerns the contract, and the specified contractual method has been used. The essence is agreement. An authorised agent may bind the principal to the service provision, even where the principal did not personally execute or separately authorise the appointment.
3. AUA 9 plainly existed as a separate corporate entity. Its lack of substantial assets or control by Lloyd’s did not affect its existence.
4. The relevant question was whether the service clause was so unusual or improper that it fell outside AUA 9’s authority to agree to the reinsurance contract. It did not. Service clauses were neither uncommercial nor unusual. In the Lloyd’s context, service on a nominated agent in England was practical and consistent with the contractual English law and exclusive jurisdiction clause. The Reconstruction and Renewal scheme supplied strong practical reasons for such a provision.
5. The wording of the clause contained no restriction limiting it to claims by policyholders. It therefore extended to Lloyd’s claim, as assignee of the reinsurer, for unpaid reinsurance premium.
6. There was no general rule preventing an agent connected with the claimant from accepting service for the defendant. The conflict principles were inapplicable within the formalised Lloyd’s framework, where the relevant agency was imposed and the agent had no choice. In any event, AUA 9’s role was purely mechanical: it acted as a post box, exercising no discretion and having no continuing role in the litigation. The case was materially different from Anglo-African Merchants v Bayley, which involved an actual continuing conflict during the litigation.
7. Mr Tropp’s application accordingly failed. The court left costs and drawing up the order for further assistance from the parties.

Not stated in the judgment.