Row over whether Lloyd’s must pay for lawyers continues
US District Judge David Hittner has ruled that Allen Stanford’s fraud trial will begin in January 2011 in Houston federal court, despite Lloyd’s refusing to pay his defence costs, Bloomberg reports.
Stanford’s lawyer, Kent Schaffer, wanted the trial in summer 2011. He said if defence lawyers must prepare the case without funding from Stanford’s insurance policies, it could take as long as 2 1/2 years.
Hittner made no decision on a request to force Lloyd’s to pay defence costs. Lloyd’s is refusing to pay, claiming a guilty plea entered by group chief financial officer James Davis voided coverage for the others.
Money laundering
Hittner told Lloyd’s lawyers that Stanford and his co- defendants are charged with broader crimes and that Davis didn’t technically plead guilty to a count of money laundering.
Lloyd’s policies are written so that any allegation of money laundering is enough to deny coverage of defence costs.
“The D&O policy makes clear that underwriters did not intend to insure a criminal enterprise,” Neel Lane, a lawyer for Lloyd’s, said in 15 December filing.
