Chancery Division practice statement - estates of deceased Lloyd's names

Issued by direction of the Vice-Chancellor, 25 May 2001This practice statement replaces the practice direction dated 21 November 1997.

The references to that practice direction in Rules of the Supreme Court PD 85 and Civil Procedure Rules 1998, rule 8.2A should therefore be taken as references to this practice statement and paragraphs 26.49-26.55 of, and appendix 7 to, the Chancery Guide (September 2000) should now be read in light of this practice statement.

Personal representatives or trustees who wish to apply to the court for permission to distribute the estate of a deceased Lloyd's name following Continued on page 54Continued from page 53the decision of Mr Justice Lindsay in Re Yorke (deceased) [1997] 4 All ER 907 or to administer any will trusts arising in such an estate, may, until further notice and if appropriate in the particular estate, adopt the following procedure.The procedure applies to cases where the only, or only substantial, reason for delaying distribution of the estate is the possibility of personal liability to Lloyd's creditors and:(a) All liabilities of the estate in respect of syndicates of which the name was a member for the years of account 1992 and earlier (if any) have been reinsured (whether directly or indirectly) into the Equitas Group and,(b) All liabilities of the estate in respect of syndicates of which the name was a member for the years of account 1993 and later (if any):(i) arise in respect of syndicates which have closed by reinsurance in the usual way or;(ii) are protected by the terms of an estate protection plan issued by Centrewrite Limited or;(iii) are protected by the terms of EXEAT insurance cover provided by Centrewrite Limited.In these circumstances personal representatives (and, if applicable, trustees) may apply by a part 8 claim form (form N208) headed In the Matter of the Estate of [ ] deceased (a Lloyd's Estate) and In the Matter of the practice statement dated 2001 for permission to distribute the estate (and, if applicable, to administer the will trusts) on the footing that no or no further provision need be made for Lloyd's creditors.

Ordinarily, the claim form need not name any other party.

It may be issued in this form without a separate application for permission under rule 8.2A.The claim form should be supported by a witness statement or an affidavit substantially in the form set out in schedule 1 to this practice statement adapted as necessary to the particular circumstances.

(Adaptation will be necessary where, for example, the claimants are trustees rather than personal representatives or where one claimant makes the statement on behalf of the others and with their authority).

The claim form should also be accompanied by a draft order substantially in the form set out in schedule 2 to this practice statement.

If the amount of costs has been agreed with the residuary beneficiaries (or, if the costs are not to be taken from residue, with the beneficiaries affected) their signed consent to those costs should also be submitted.

If the claimants are inviting the court to make a summary assessment they should submit a statement of costs in the form specified in the costs practice direction.

If in his discretion the master (or outside London the district judge) thinks fit, he will summarily assess the costs but with permission for the paying party to apply within 14 days of service of the order on him to vary or discharge the summary assessment.

Subject to the foregoing, the order will provide for a detailed assessment unless subsequently agreed.The application will be considered in the first instance by the master (or outside London the district judge) who, if satisfied that the order should be made, may make it without requiring the attendance of the claimants and the court will send it to them.

If not so satisfied, the master or district judge may give directions for the further disposal of the application.

Schedule 1 - draft witness statement[Heading as in claim form]

WE, [ ] of [ ] and [ ] of, [occupations] STATE as follows:1.

We are the personal representatives of the estate of the above-named deceased ('the deceased') who died on [ ].

We obtained [a grant of probate][letters of administration] out of the [ ] Registry on [ ] and a copy of the grant [and the deceased's will dated [ ]] is now produced and shown to us marked ' .1'.

We make this witness statement in support of our application for permission to distribute the deceased's estate [and to administer the will trusts of which we will be the trustees following administration.].

This witness statement contains facts and matters which, unless otherwise stated, are within our own knowledge obtained in acting in the administration of the estate.

We believe them to be true.2.

The deceased was before his death an underwriting member of Lloyd's of London whose underwriting activities are treated as having ceased on [ ].

The estate was sworn for probate purposes at [ ].

We are now in a position to complete the administration of the estate and to distribute it to the beneficiaries but we do not wish to do so [or to constitute the will trusts] without the authority of the Court because of the existence of possible contingent claims arising out of the deceased's underwriting liabilities for which we might be liable.

3.

The position concerning the deceased's Lloyd's liabilities follows:3.1 [The deceased's liabilities in respect of the years of account 1992 and earlier were reinsured into Equitas as part of the Lloyd's settlement.

There is now produced and shown to us marked ' .2' a copy of the certificate or statement of reinsurance into Equitas].3.2 [The syndicates in which the deceased participated in the years of account 1993 and later have [closed by reinsurance in the usual way] [are the subject of an Estate Protection Plan issued to the deceased by Centrewrite Limited][are protected by an EXEAT policy obtained by the claimants from Centrewrite Limited].

4.

There is now produced and shown to us marked ' .3' a copy of a letter dated [ ] from the estate's Lloyd's agents confirming that [all] the syndicates have been reinsured to close [with the exception of [ ] which syndicate is protected by [the Estate Protection Plan][the EXEAT policy]] and confirming that in the case of failure of a reinsuring syndicate to honour its obligations, the primary liability to a creditor will fall on Lloyd's Central Fund.

[A copy of the [Estate Protection Plan and Annual Certificate] [EXEAT policy] is now produced and shown to us marked ' .4'].5.

The claimants believe that the interests of any Lloyd's claimant are reasonably secured by virtue of the fact that all the Lloyd's syndicates in which the deceased participated have either been closed ultimately by reinsurance to close (in respect of any open years prior to 1992 into the Equitas group) or, in respect of subsequent years [have all closed by reinsurance] [are protected by the Estate Protection Plan][are protected by the EXEAT policy].

Equitas remains licensed to conduct insurance business and there is presently no reason to doubt its solvency.

A copy of the latest report and accounts of Equitas Holdings Limited is now produced and shown to us marked ' .5'.

[The [Estate Protection Plan] [EXEAT policy] is provided by Centrewrite Limited which is a wholly-owned subsidiary of Lloyd's and the beneficiary of an undertaking by Lloyd's to maintain its solvency.

We have no reason to doubt the solvency of Centrewrite.

A copy of the latest report and accounts of Centrewrite Limited is now produced and shown to us marked ' .6'].6.

As appears from the schedule now produced and shown to us marked ' .7' in which we summarise the assets and liabilities of the estate, we have paid all the debts of the deceased known to us (apart from the costs and expenses associated with the final administration of the estate) and we have also advertised for and dealt with all claimants in accordance with section 27 of the Trustee Act 1925 [or if not explain why].

7.

We know of no special reason or circumstance which might give rise to doubt whether the provision described above can reasonably be regarded as adequate provision for potential claims against the estate and we ask for permission to distribute accordingly.

Schedule 2 - Form of Order[Heading as in claim form]

UPON THE APPLICATION of the claimants by part 8 claim form dated [ ]AND UPON READING the documents recorded on the court file as having been read IT IS ORDERED THAT:1.

The claimants as [the personal representatives of the estate ('the estate') of the above-named deceased ('the deceased')] [and] [the trustees of the trusts of the deceased's will dated [ ] ('the will')] have permission to distribute the estate [and] [administer the trusts of the will and distribute capital and income in accordance with such trusts] without making any retention or further provision in respect of any contract of insurance or reinsurance underwritten by the deceased in the course of his business as an underwriting member of Lloyd's of London.

2.

The costs of the claimants of this application [either in the agreed sum of [ ]] [or summarily assessed in the sum of [ ] (with permission to [the residuary beneficiaries][name beneficiaries] to apply within 14 days after service of this order on them for the variation or discharge of this summary assessment] [or subject to a detailed assessment on the indemnity basis if not agreed by or on behalf of [the residuary beneficiaries] [name beneficiaries]] be raised and paid or retained out of the estate in due course of administration.