For Breyer, Lloyd's Remains a Tangle
Wednesday, July 27, 1994
On June 10, before hearings on his confirmation as a Supreme Court justice began, Stephen Breyer received a chilling letter from his London insurance agency, R.W. Sturge Ltd.
"I very much regret to have to confirm that your underwriting ... has resulted in an overall loss," it began. "As previously advised, the deadline for payment of losses to Managing Agents is the 29th July."
That makes two deadlines for Breyer this week, when he also faces a scheduled Senate vote on his confirmation. And while that confirmation seems all but assured, following the 18-0 endorsement he received from the Senate Judiciary Committee, the question of Breyer's losses in Lloyd's of London -- and his ability to extricate himself from what has become Britain's greatest insurance disaster -- continues to spark debate between his supporters and critics.
Breyer has been sharply criticized by Sen. Richard Lugar (R-Ind.) for his decision to join Lloyd's without realizing the potential for the losses he is incurring. "The fact is," Lugar said yesterday at a breakfast for reporters, "Judge Breyer could not divest himself. This is somewhat like the Costa Nostra; you can't opt out. The tentacles are in you forever, down to your last button."
But Sheila Marshall, a New York-based lawyer who represents Lloyd's, said that according to an estimate prepared by Chatset Ltd., a London consulting firm, under the "worst-case scenario" Breyer would lose $187,200, with his insurance covering all of that.
A White House official said that Breyer's remaining liability in Lloyd's is approximately 1/5,000th of his syndicate's losses -- meaning the syndicate would have to lose several billion dollars before Breyer's share of the losses would exceed his insurance coverage.