€550k settlement approved by High Court in Bloxham case
THE High Court has approved a €550,000 settlement of a legal action by the liquidators of stockbroking firm Bloxham over alleged under-insuring of the firm.
The liquidators had claimed some €15m damages in their proceedings against the firm's former insurance broker, Roberston Low, which had strongly disputed any liability. It has also argued Bloxhams understood the cover it had at all times and its consistent concern related to insurance had been the price of it.
The hearing opened last week but the sides agreed to attempt mediation on the suggestion of the President of the High Court, Mr Justice Nicholas Kearns. Although mediation did not result in agreement and the case resumed yesterday, the sides continued to engage and the judge was told today they had agreed to a settlement.
Because the liquidators required court approval before they could settle the case, they then asked the judge to approve the settlement of €550,000, plus costs.
Seeking that approval, Lyndon MacCann SC, for the liquidators, accepted they would have had difficulties proving their case in light of some of the evidence and documents relating to insurance.
This included an email in which his side appeared to acknowledge an insurance condition that was disputed in the proceedings, counsel outlined. A witness for his side had said that should have put him on inquiry.
Mr Justice Kearns said the case was listed for three weeks and was "not without significant risk" from the viewpoint of the liquidators.
In all the circumstances, he was happy to approve the settlement.
Bloxham was placed in liquidation in 2012 on foot of a petition by the firm's partners. The court was told one reason for that was because the firm was subject to claims by former clients arising from the sale of investments known as the Saturn Dresdner bonds.
Bloxham sold up to €30m of those bonds and later agreed to pay almost €16m in settlement of those claims or legal fees but received just €1.6m from its insurers, Novae, it was stated. The liquidators, in their action, sought damages for the difference, some €15m.
The liquidators claimed Bloxham had believed in 2007 it had insurance cover on the basis of up to €3m a claim but it turned out the total cover for all claims was €1.275m. This was in a context where the firm's business was expanding and it had more than €1bn under discretionary management by 2008 for fees of €35m, the court heard.