A recent Lloyd's Market Bulletin ref: Y4280 (14 May 2009) gives details of three individuals who, when changing employment to a competitor, committed various breaches of their obligations to their previous employer. Alistair Mark Mellis and Ksenya Mazalova were involved in the appropriation of documents from their previous employer for use in their new employment. Mr Mellis, who had not yet moved to his new employer, also provided underwriting assistance to Ms Mazalova. When ASM became aware of the misappropriated documents on its system, it disabled access to them.

Albert Thomas Phipps remained at the old employer for a period after the other two had departed. He was presented with a risk to underwrite with a significantly reduced line compared with earlier years; the lead had been offered to the employee's new employer. He failed to question the reduction in line, to negotiate with the broker to improve his then employer's position or to alert senior management.

Mr Mellis and Ms Mazalova each admitted a charge of discreditable conduct and of detrimental conduct. Mr Phipps admitted a charge of detrimental conduct. As result of the enforcement proceedings, Mr Mellis and Ms Mazalova have had their right to transact insurance business at Lloyd's withdrawn for six and three months respectively. All three have been censured and found liable to contribute to Lloyd's costs of the proceedings.

The bulletin serves as a reminder that breaches of employment contracts may also have serious regulatory consequences.

For the full market bulletin, click here.