Individuals who invested money through Lloyds of London are facing bankruptcy after losing a court battle against the world’s oldest insurance market.

The individuals, known as names, sued Lloyds claiming it misled them about the exact nature of insurance deals they bought into in the early 1990s.

Lloyds has since demanded payments of as much as £1 million each from the names, who dispute their obligation to pay leading to several court cases.

Yesterday the High Court ruled in favour of Lloyds, saying there was “no deliberate concealment” of what the names were getting into.

Mr Justice David Steel said they were liable for the money claimed by Lloyds and in addition ordered each name to pay £250,000 towards Lloyd’s costs in fighting the case.

A total 30 of the 49 names involved already have bankruptcy petitions against them. The petitions were put on hold pending the outcome of yesterday’s case and Michael Freeman, the lawyer representing the names, said he expects Lloyds will ask for the bankruptcy petitions to proceed immediately. Lloyds said it was considering its options.

Sean McGovern, Lloyds’ general counsel, said the case was the last major piece of litigation arising from a turbulent period of restructuring that almost bankrupted the insurance market in the 1980s and 1990s.

“This is a victory for Lloyds that will help us close a chapter in our history and which we hope will be the end of a decade of failed litigation brought by the names,” Mr McGovern said adding that Lloyds was seeking court orders against the claimants to prevent them from bringing similar litigation in the future.

Mr Freeman said he would seek to appeal against the decision, which he said will effect around 38,000 Lloyds names.

David Harris, one of the names involved in the case said he would “never have joined Lloyds” if he knew the true terms of the deal. “Lloyds has acted deceitfully and in breach of the duties it owes its members.”

Individuals began to withdraw from Lloyds from 1990 onwards and the market is now dominated by corporate investors.

In 2006, US investor Warren Buffet signed a $7 billion re-insurance contract with Lloyds that took over some of the markets old liabilities.

Explore Law

• Columnists

• Law Panel

• Law Reports

• Student Law

Times Recommends

• Legal school 'earned £1m by exploiting bar course'
• Axe may fall on 5,000 more City lawyers
• Prince Charles named in £81m court battle