Tuesday, 12 August 2014

Pan Am insurer suing US Government over Lockerbie pay-out

[What follows is a part of a brief report published yesterday on the website of The Insurance Insider:]

Lloyd's run-off vehicle Equitas is suing the US government for $97mn after it prevented insurers from pursuing the Libyan government for its involvement in terrorism attacks, including the Lockerbie bombing.

Lloyd's insurers, alongside US legacy carrier Aviation & General, paid out $55mn in 1988 after the Pan Am plane exploded over the small town in southern Scotland, killing 270 people.

[Part of the background to this story can be found in a 2003 report in the Scottish Daily Record newspaper:]

The Lockerbie bomber is being sued for £400 million by Pan Am's insurers. 

A record civil action will be raised at the Court of Session this week in Edinburgh against ex-Libyan secret agent Abdel Baset Al-Megrahi. 

Insurers acting on behalf of the now-defunct airline want compensation for the money they paid out to the victims of the disaster. 

The case is the biggest single damages action ever lodged in a Scottish court. 

Megrahi's former co-accused Al Amin Khalifa Fhimah, who was acquitted, the Libyan government and Libyan Airlines have also been named in the lawsuit. 

Last week, Megrahi, 51, was told at the High Court in Glasgow he must serve at least 27 years before he can be considered for parole. 

The action at the Court of Session has been tabled by Equitas of London, a subsidiary of Lloyd's of London. 

The legal move comes 15 years after Pan Am Flight 103 was blown to pieces by a bomb, killing 270 people. 

Equitas want to claw back some of the £600 million paid to their families. 

They are also trying to recover money on behalf of creditors of Pan Am, who went bust in 1991. Pan Am were sued by the families of the victims, including the 11 residents killed in Lockerbie. 

Claims were also made by residents whose homes were damaged. 

After the airline folded, power of attorney was transferred to Equitas. 

Equitas who have been pursuing Libya and the bombers since the 1990s have hired Edinburgh legal firm [Shepherd and Wedderburn] to represent them. 

A spokesman for Equitas said: “We are continuing to try and pursue our recoveries and the action in the Court of Session is part of that.'' 

Libyan leader Colonel Gaddafi has agreed to pay £1.7 billion compensation to the victims' families after taking responsibility. [RB: The sum was $2.7 billion. The contingency fees of the lawyers representing the families swallowed up around one third of this.]

Equitas hope a win will put pressure on Libya to pay on behalf of the other parties, including Megrahi. 

Yesterday, Dr Iain Scobbie, a lecturer in international law at Glasgow University, said it would be difficult for Equitas to get compensation, even if they win. 

He said: “Under international law, a sovereign state is immune from any action of this kind.'' 

Megrahi's lawyer, Eddie McKechnie, said he could not comment, as he only represents his client on the criminal charge. 

[Another report, from June 2004, can be read here on the website of The Herald. The Court of Session action was settled on 18 February 2005: see Jonathan B Schwartz Dealing with a "rogue state": the Libya precedent, pages 568-69, footnote 92. It appears from an Associated Press news agency report on the website of The Washington Post that the settlement involved a payment in excess of US$31 million.

Given the various successful legal actions taken by Pan Am's insurers against Libya that the above sources specify, it is not immediately clear to me what their present action against the US Government relates to.]

No comments:

Post a Comment