On 16 May 2019, LAMP Insurance Company Limited, the renowned after-the-event (ATE) provider, submitted an application to the Supreme Court of Gibraltar, under s.163 of the Gibraltar Companies Ordinance 2001, requesting that the company be placed into liquidation.[i]
On its website, Gibraltar-based LAMP explains the source of its financial difficulties:
‘The Company’s cashflow projections show that it has insufficient liquid assets to enable it to pay its debts as they fall due and there is no reasonable prospect of obtaining sufficient liquid assets in sufficient time to enable it to do so’.[ii]
Consequently, LAMP and parent company (LAMP Group Limited) directors have conceded that negotiations for additional finance (to meet corporate obligations under existing contracts and recommence issuing new contracts) have failed.
The application hearing has been listed for 31 May 2019.
In the interim, the company has warned its policy holders that it is still ‘actively considering all options, including a potential sale of the business’, though a successful acquisition would require the completion of due diligence checks, regulatory approval and unconditional financial commitment before the hearing date.
Policies that have not expired will remain in force, but LAMP has cautioned policy holders, e.g. claimant personal injury firms, that ‘it is unable to make any claim payments’, as a result of its ‘insolvent’ status. They should therefore ‘immediately consider acquiring alternative insurance protection’ on behalf of their injured clients. Defendant parties should also be warned that their prospects of recovering costs from a LAMP-indemnified claimant may be significantly worsened by the company’s insolvent status.
In the likely event that the company continues the winding up process, LAMP’s appointed liquidator will contact its creditors.
[i] Neil Rose ‘Well-known after-the-event insurer facing liquidation’ (21 May 2019 Litigation Futures) <https://www.litigationfutures.com/news/well-known-after-the-event-insurer-facing-liquidation> accessed 21 May 2019.