The insurance market Lloyd’s of London has issued the largest fine in its 336-year history after a member firm mishandled a bullying and harassment case and hosted an inappropriate “boys’ night out” event for staff.
Lloyd’s announced on Wednesday that it had fined Atrium Underwriters more than £1m due to “serious failures” by the firm, which was shown to have tolerated discrimination, harassment and bullying over a number of years.
One of the charges related to “a systematic campaign of bullying” against a junior staffer by a male employee whose behaviour was well known at the firm, including by senior managers who failed to take adequate steps to address the problem.
Atrium was also charged for “sanctioning and tolerating” an annual “Boys’ Night Out” where some male employees – including two senior executives – took part in inappropriate initiation games and heavy drinking, and made sexual comments about female colleagues that Lloyd’s said were both “discriminatory and harassing” to members of staff.
“Some of this conduct was led, participated in and condoned by the two senior managers in attendance,” Lloyd’s said. The parties took place annually for a number of years until 2018.
In relation to the bullying case, which took place during the same period, Atrium also failed to protect the junior staff member or the employee who complained. The employee was told to keep quiet about the case.
Instead, Atrium negotiated a settlement package with the bullying employee and allowed him to resign rather than face any repercussions. Lloyd’s said this was done in part to avoid bad publicity that could harm the business, which employs about 205 staff. Atrium was subsequently charged for failing to notify Lloyd’s about the misconduct, which breached the insurance market’s bylaws.
Lloyd’s enforcement board said the £1m fine, which is the largest it has ever imposed, reflected both “how unacceptable these circumstances were, and the seriousness with which Lloyd’s is treating this issue”.
Atrium would have been fined £1.5m, but Lloyd’s slashed the penalty by nearly a third after the underwriter agreed to a settlement early on in the investigation. Atrium will also pay £562,713 to cover Lloyd’s administrative costs.
Lloyd’s chief executive, John Neal, said: “We are deeply disappointed by the behaviour highlighted by this case and I want to be clear that discrimination, harassment and bullying have no place at Lloyd’s. The robust action we have taken today, including the largest fine ever imposed by the Lloyd’s enforcement board, shows that we will not tolerate poor conduct in our market.”
The enforcement board said Atrium had previously had a “good disciplinary record” and had since updated its policies in regards to disciplinary issues, whistleblowing, diversity and inclusion, as well as training for senior managers.
“Lloyd’s expects all participants in the market to meet the highest standards of professionalism and we are continuing to use our powers to intervene when needed,” Neal added.
Atrium’s non-executive chairman, Christopher Stooke, apologised and said the underwriter accepted the insurance market’s ruling. “With deep regret, it is clear that Atrium failed to live up to its values and serious errors were made when handling these matters. We are sorry for the hurt that this caused and how difficult this been for those affected.
“The behaviour outlined in the notice of censure has no place in our business or our industry, and we recognise that we must go further to ensure that this situation is never allowed to happen again.”