A very costly “Boys Night Out”- Atrium fined over £1 million due to non-financial misconduct

This action follows Lloyd’s issuing a policy in May 2019 on conduct involving harassment, bullying, discrimination, alcohol or drugs. The policy made clear that, in addition to actions of individuals, of “equal importance is the culture of the firm for whom the individual works and whether it supports or tolerates a culture of unacceptable personal behaviour towards others”.

Findings 

In a Notice of Censure, Lloyd's confirmed that proceedings were brought against Atrium Underwriters Limited due to "serious failings" by the firm. Lloyd's concluded that non-financial misconduct had taken place over a number of years that "precipitated a culture which tolerated instances of unacceptable conduct involving discrimination, harassment and bullying".

Up until 2018, Atrium had sanctioned an annual "Boys Night Out" which included inappropriate conduct such as initiation games, heavy drinking and sexualised comments about female colleagues. Lloyd’s found these comments to be discriminatory and harassing to female members of staff. Some of this conduct was found to have been led and condoned by two senior managers.

Lloyd's also found that there had been a "systematic campaign of bullying against a junior employee over a number of years". Significantly, and in breach of its own policies, Atrium had failed to investigate, take any disciplinary action or adequately protect the junior employee. Instead, Atrium opted to negotiate a settlement package, allowing the individual to resign rather than face disciplinary action.

Outcome 

In addition to the £1million fine, Atrium will also be required to pay Lloyd's costs which amount to more than £500k.

Atrium say they have since taken several steps to try and address the culture of the firm. A values framework has been implemented to ensure employees know what is expected of them and a new Board level Culture Committee has been established. Atrium have also updated their policies and procedures relating to disciplinary issues, whistleblowing and diversity and inclusion. There is also mandatory training for all managers on inclusive recruitment and being an active bystander.

The huge fine handed down by Lloyd's in this case sends a very clear message that bullying, harassment and any other form of inappropriate behaviour will not be tolerated by Lloyd's and that a failure to investigate concerns or to take appropriate action will mean that the finger of blame is pointed at the firm as a whole, not just the individuals who behaved badly.

If you would like to discuss how to investigate an instance of bullying, harassment, discrimination or any other allegations within your organisation, please speak to your regular Lewis Silkin contact to discuss how we can help.