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In a long running dispute, Equitas brought proceedings seeking damages
on the basis that Horace Holman, as a broker on various outwards contracts
of reinsurance written to protect Lloyd's syndicates for 1992, were
in breach of their duties and were obliged to deliver up documents relating
to the placement and the subsequent administration of the outwards protection.
It was agreed between the parties that Horace Holman owed the syndicates
duties to:
(i) take reasonable care to maintain proper and adequate records;
(ii) preserve and be constantly ready with correct accounts of all its
dealings and transactions; and
(iii) provide their records to the principal as far as they relate to
transactions done as a principal's agents.
With reference to the third duty, however, Horace Holman argued they
were not obliged to disclose or provide copies of documents created
for their own purposes, including their IBA ledgers. They also said
that they had provided a composite account based on the thorough review
of the claims files and as such, they had complied with their duties.
The Judge disagreed on both counts. He found that Horace Holman was
obliged to provide copies of the documents insofar as they recorded
transactions that were carried out as Equitas' agent and, as the composite
account had not been presented in sufficient detail, no account had
been adjusted between the parties and no balance struck - it was in
essence, not sufficient simply for the accounting party to state an
amount acknowledged to be due and believed complied with its duties.
Even though the servicing of discontinued accounts must be an unattractive
proposition for any broker, they must be serviced as effectively as
those that are live.
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