Profile: Two men who lost a billion: Names in the Lloyd's syndicates run by Anthony Gooda and Derek Walker are facing ruin. Richard Thomson relates a tale of two incompetents

THE BITTERNESS was almost palpable at the Lloyd's of London general meeting in the Festival Hall. Hundreds of names facing ruinous losses had come to hear the leadership of Lloyd's explain itself. They got little more than platitudes and hypocrisy.

In one of the most telling incidents at last week's meeting, a name asked Sir Jeremy Morse - a member of Lloyd's ruling council as well as chairman of Lloyds Bank - whether he would hire as a manager for his bank a man who had stood trial for fraud. The question alluded to the prosecution of Derek Walker, the main underwriter in the crashed Gooda Walker insurance partnership, in the early 1980s. Walker was allowed to continue underwriting at Lloyd's after being acquitted.

Before Sir Jeremy could answer, David Rowland, the chairman of Lloyd's, deflected the question to the corporation's lawyer. He said that since Walker had been acquitted, there had been no grounds for barring him from the insurance market. He did not, however, explain why Christopher Moran, who had been charged in the same case and also not convicted, was thrown out of Lloyd's for life.

Mr Walker and Mr Moran were acquitted at the Old Bailey in 1982 on fraud charges relating to large aviation reinsurances. Afterwards, Lloyd's allowed Mr Walker to return to the firm where he had worked for most of his life. Less than a decade later he is back in the news again, although not in the courts. This time, Mr Walker is guilty of grossly incompetent underwriting. The pounds 1bn loss faced by the Gooda Walker names, many of whom face demands of pounds 1m each, is largely his responsibility.

Now in his mid-sixties, Mr Walker joined Lloyd's as a teenager fresh from school. Unlike the old Etonians and ex-Guards officers who made up the usual recruitment to Lloyd's, he was from a lower middle class background. He was given his break by Bill Gooda, Anthony Gooda's father, who became his mentor. 'Walker was keen and hungry - first in in the morning and last home at night,' recalls a former underwriter. 'He was a hard-working teenager with an aptitude for trading. Bill took a shine to him.'

Bill Gooda, himself the son of a Surrey butcher, had made his way in Lloyd's by sheer ability. He was an excellent mathematician - a vital but astonishingly rare gift among Lloyd's underwriters - who wrote three books on mathematics to pay hospital bills when the first of his six children was born. He was respected by his names as a man of impeccable honesty. But he was an outsider in the socially constipated atmosphere of Lloyd's, and his protege, Walker, has remained so, too.

To other (socially 'superior') underwriters, however, Mr Walker never had Bill Gooda's ability. 'Walker wasn't educated, after all,' pronounced one. 'He probably can't even spell 'pollution' or 'asbestosis'. He would have done well selling oranges in Smithfield or working behind a Post Office counter.' But opinions differ. 'I should think he's very clever - he looks intelligent and quick,' said Fernanda Herford, a Gooda Walker name facing losses of more than pounds 700,000. 'He's cocky, like a sparrow, and well dressed. A typical Essex man.' Another described him as 'shortish, balding with a prominent nose and bright little eyes'. Mr Walker holds a pilot's licence, and he and his wife Phyllis are said to be brilliant ballroom dancers. He has lived in the same house in West Sussex for more than 20 years.

Able or not, Mr Walker prospered at Lloyd's. He became the main underwriter for Bill Gooda as the old man moved into semi-retirement during the 1970s. Towards the end of the 1970s, he became involved with Christopher Moran. The two wound up in court.

When he returned to work, the existing names were reassured because of their faith in Bill Gooda. As the years passed, new names were not told of Mr Walker's brush with the law. He specialised in reinsurance business including the so-called LMX excess-of- loss policies, a risky area where an underwriter takes all the loss above a certain level. The market turned bad in the latter half of the 1980s.

Again, opinions differ as to what went wrong with Mr Walker's underwriting. 'It is fine to be a good trader in a bull market, but when the market turns down you need real brains,' said Ian Posgate, the legendary underwriter barred from Lloyd's in the early 1980s. 'Walker got out of his depth and the brokers were piling in and killing him.'

According to one account, brokers with bad risks would turn up at Mr Walker's underwriting box late in the afternoon shortly before he left, as he always liked to do punctually, to catch the train home. After some delay, during which Mr Walker would grow restless to leave, the broker would slide his worst risks in front of him. The underwriter would sign, snatch his coat, and dash for the train.

According to one underwriter, Mr Walker realised towards the end that things were going horribly wrong. 'He was getting deeper and deeper in and couldn't talk to anyone about it. Anthony Gooda, after all, was too stupid to understand it.'

Anthony Gooda, as chairman of the Gooda Walker syndicates and of Gooda & Partners, the underwriting agency, is the other half of this disaster story. He was Bill's eldest son. He went to school at Downside, did his National Service and then joined the family business. When his father died in 1981, he became chairman.

Tony Gooda, now 56, is an affable, jolly man - smooth, expensively dressed, well known in his area of West Sussex for his parties, his cars (which once numbered a Porsche and two Mercedes), his cricket pitch (where he has played host to the Australian cricket team), his racehorses, and his large house (with antique furniture, tennis court and swimming pool). 'He wanted the best, and had it,' said Valerie Baker, his older sister, who faces losses of hundreds of thousands as a name on her brother's syndicates.

Gooda is also widely hated in his area of West Sussex. As they now say in Coneyhurst, where he lives, the most dangerous game in the world was a round of golf with Tony. You risked being recruited as a name andbankrupted.

Mr Gooda was the sociable public face of Gooda Walker. By common agreement however, he is not very bright. When he joined his father's firm he quickly proved that his gifts did not lie in underwriting. 'He did a spell in the underwriting box, but my father hauled him out because he was not good,' said Mrs Baker. 'He gave the underwriting to Derek Walker instead. Anthony then went round roping in new names. He did alright with my father behind him.' His names liked and trusted him. 'There was something homespun about him,' said Fernanda Herford. 'He is a kind of Walter Mitty character - he probably believed a lot of what he said.'

And he said a lot. One of his slogans was: 'I won't make you a fortune, but I won't lose you one either.' He would, in other words, give his names a steady, safe return. As an agent, he was responsible for putting his names into appropriate syndicates. He put large numbers of them into the Gooda Walker syndicates - but far from being safe they were underwriting relatively high-risk business.

Although he expresses sorrow at ruining so many people, Mr Gooda insists his names knew the risks. The names disagree. By 1988, the underwriting on the Gooda Walker syndicates was going bad. But Mr Gooda assured names there was nothing wrong, and continued to put new ones into his syndicates in 1989 and 1990. He now claims he himself did not know the risks, because his colleagues did not keep their chairman informed of the business position. He appears to have made no attempt to find out.

The relationship between Mr Gooda and Mr Walker seems to be close. 'Tony is genuinely fond of Walker,' said Mrs Baker. They have spent their working lives in the same firm and certainly formed a complementary partnership: while Mr Walker made a mess of the underwriting, Mr Gooda made a mess of the agency business.

Mrs Baker believes Mr Walker was instrumental in getting Nicholas Gooda, Tony's younger brother, removed from the underwriting box by sowing discord between the siblings.

Nicholas is cleverer than Tony and understands the underwriting business. By the end of the 1980s he was confiding to his older sister that there was something fundamentally wrong with it. Eventually he left the box and then, a few months before Gooda Walker collapsed in 1991, he left the firm.

Both Mr Gooda and Mr Walker claim to have lost as much money as their names in the underwriting disaster although there is, as yet, no visible change in the former's lifestyle. (His main tragedy is that his wife, Janie, suffers from multiple sclerosis). On top of his visible wealth, he has money in Australia and properties in the name of his children, none of which can be touched by Lloyd's to pay off losses.

When Mrs Baker made trenchant criticisms of her brother on television last week, he rang her three days later to harangue her about disloyalty. But she asks: 'Why on earth did he wait three days? Wouldn't most people ring immediately if they were so angry?'

Mr Gooda and Mr Walker have so far received a relatively charitable judgement from Lloyd's insiders. 'They were honest people out of their depth,' said one. The names, however, believe there is more to it than that.

(Photographs omitted)