Bloxham's liquidators back to High Court after mediation in under-insurance row fails
A LEGAL action by the liquidators of stockbrokers Bloxham over alleged under-insuring of the firm has resumed at the High Court, after efforts to mediate the dispute failed.
The sides had last week taken up a suggestion by the President of the High Court, Mr Justice Nicholas Kearns, to consider mediation but they told the judge yesterday this had not worked out and the case was proceeding.
The liquidators have sued the firm's former insurance broker, Robertson Low, for more than €15m damages arising from Bloxham allegedy being "chronically under-insured".
Although the firm paid some €16m in settlement of claims by clients related to certain Saturn Dresdner investment bonds, the total sum recovered from its insurers was one-tenth of that, the court heard.
The liquidators claim Bloxham 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 was told.
Robertson Low has denied the claims, insisted Bloxham understood the cover it had and that the firm's concern at all times concerning insurance was the price.
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 are seeking damages for the remainder in proceedings listed to run for three weeks.