RCS 63.6A Directions: Executors of a Lloyd’s “Name” May Distribute an Estate Without Retention Where Post‑1993 Liabilities Are Remote and Protected by RITC/Exeat/New Central Fund

1. Introduction

In Petition of Robert Cheyne Turcan and Another as executors of the late Peter Douglas Miller Stirling-Aird for directions as to the distribution of the estate of a deceased underwriting member of Lloyds of London [2026] CSIH 41 (Extra Division, Inner House, Court of Session), the court considered whether executors could complete distribution of an estate without retaining funds against the possibility of a future creditor claim arising from the deceased’s historic underwriting at Lloyd’s of London.

The petitioners (the executors and trustees) feared potential personal liability if, after full distribution, a Lloyd’s-related insurance claim were to “come back” onto the deceased’s years of account. They therefore sought directions under RCS 63.6A.

The deceased had been a Lloyd’s underwriting member (“Name”), with his final year of personal underwriting on an unlimited liability basis being 1999. The petition focused on 1993 and later years of account.

2. Summary of the Judgment

The Inner House accepted a reporter’s recommendation and answered the petition’s question in the affirmative: the executors may properly distribute the estate in full without retention or further provision for potential future Lloyd’s claims.

The court emphasised that refusal would effectively prevent estate administration from being completed due to a risk that was, on the facts, “very remote indeed”. The petitioners were awarded their expenses from the executry estate.

3. Analysis

3.1 Precedents Cited

The principal authority relied upon was Hutchison's Exrs, Petitioners [2022] CSIH 51; 2022 SLT 1374.

  • Function in this case: Hutchison's Exrs is used to delimit the contemporary scope of risk for Lloyd’s Names by explaining why, across the EEA, no Name now has liability for Lloyd’s business in or prior to 1992. That framing is critical: it justifies why petitions of this kind should ordinarily concern post‑1992 years (and, in practice, from 1993 onward).
  • Doctrinal effect: The present case does not expand Hutchison's Exrs so much as apply its risk-boundary logic to the post‑1993 context, showing how the court evaluates whether it is appropriate to protect executors via directions when protections exist and the risk of “bounce-back” liability is exceptionally low.

3.2 The Role of Practice Guidance (Practice Note No 1 of 2024)

The court placed the petition within the framework of Practice Note No 1 of 2024 (superseding Practice Note No 1 of 2006), which channels RCS 63.6A petitions toward circumstances where:

  • the liabilities relate to non-life business of syndicates of which the deceased was a member; and
  • for years from and including 1993, the liabilities have been reinsured to close or otherwise indemnified (including by Estate Protection Plans/EXEAT cover), or met by the New Central Fund, but there remains a reason to apprehend failure of such protection.

The reporter’s remit tracked the Practice Note’s expected enquiries: identification of the relevant business, confirmation of RITC/indemnity, and whether there was any reason to apprehend failure of protection.

3.3 Legal Reasoning

The Inner House’s reasoning is best understood as an exercise in risk calibration under RCS 63.6A: whether the court should, by direction, immunise executors against the residual possibility of unknown Lloyd’s-related liabilities after distribution.

Key reasoning steps were:

  1. Establish the protections: The court accepted the reporter’s account that post‑1993 liabilities were traditionally managed by reinsurance to close (RITC). There was also evidence (a letter from Lloyd’s Members Agency Services Limited) indicating the deceased had taken out an EXEAT policy in 2008, intended to facilitate early closure of Lloyd’s affairs.
  2. Assess likelihood of failure: The reporter found no present reason to believe in a general failure or exhaustion of the relevant RITC. The court noted Lloyd’s description of RITC failure as a “rare event” (per publicly available reporting referenced by the reporter).
  3. Account for backstop assistance: The court accepted that, if RITC failed, an application could be made for assistance to the New Central Fund under Lloyd’s byelaw No 23 of 1996. Although discretionary (no entitlement), the fund’s scale (about £3.2 billion as at 31 December 2025) and the absence of recent claims supported the view that inability or refusal was not a realistic concern on the evidence.
  4. Balance against administration paralysis: The court treated the practical consequence of refusing directions as decisive: distribution could not proceed because executors would remain exposed to a highly speculative personal risk. In that setting, granting directions was proportionate and consistent with the function of RCS 63.6A.

Notably, the EXEAT policy’s terms were not traced and one referenced syndicate “might still be open”. The court nevertheless treated the policy’s acknowledged existence as an additional “layer of comfort”, rather than as a prerequisite requiring perfect evidential completeness before directions could be granted.

3.4 Impact

The decision reinforces (and operationalises) a pragmatic standard for post‑1993 Lloyd’s estate petitions:

  • Remote-risk threshold: Where RITC exists in the traditional manner and there is no concrete basis to apprehend its failure (especially when supplemented by EXEAT-type cover and the New Central Fund as a potential backstop), the court is willing to characterise the residual risk as “very remote indeed” and allow full distribution.
  • Evidential sufficiency over perfection: The inability to produce the EXEAT policy itself did not prevent directions where credible secondary evidence supported its existence and the broader protection architecture was intact.
  • Executor protection and finality: The judgment underscores RCS 63.6A’s purpose as enabling executors to achieve finality in administration without indefinite retention driven by contingent Lloyd’s exposures.

Practically, the case is likely to be cited to support directions where the petitioner can demonstrate (i) RITC in place for the relevant years, (ii) no known indicators of reinsurance weakness, and (iii) an additional indemnity/backstop context—while resisting arguments that speculative, unparticularised future claims should force prolonged estate retention.

4. Complex Concepts Simplified

RCS 63.6A petition (directions)
A procedure allowing executors/trustees to ask the Court of Session for authoritative directions on how to administer an estate when there is uncertainty, helping protect them from later allegations of breach of duty.
Lloyd’s “Name”
An underwriting member who historically could bear personal (sometimes unlimited) liability for insurance written through Lloyd’s syndicates.
Reinsurance to Close (RITC)
A mechanism by which liabilities from a closing underwriting year are transferred to a later syndicate year via an inward reinsurance contract, so the earlier year’s members should not face future claims directly unless the reinsurance fails or is exhausted.
EXEAT policy
Insurance intended to facilitate early closure of a member’s Lloyd’s affairs where liabilities might otherwise remain open (for example, if RITC could not be obtained). In this case, the policy existed but its precise terms were not available.
New Central Fund (Lloyd’s)
A discretionary fund under Lloyd’s governance that may provide assistance in certain circumstances. There is no automatic right to payment, but it can operate as an additional protective layer.

5. Conclusion

[2026] CSIH 41 confirms that, for post‑1993 Lloyd’s underwriting exposures, the Court of Session will grant RCS 63.6A directions allowing full distribution without retention where the factual matrix shows robust protection (traditional RITC, plus additional indemnity features such as EXEAT cover, and the potential availability of the New Central Fund) and no concrete basis to fear failure. The judgment strengthens the pathway to finality in executry administration by treating merely hypothetical Lloyd’s creditor claims as insufficient to justify indefinite estate retention.