LONDON -- A High Court battle between Lloyd's of London and 235 names who accuse the insurance market of fraud will begin in earnest this week.

The names in the so-called Jaffray fraud case will present their evidence for the first time today at the Chichester Rents courts in London.

Lloyd's has assembled a 48-strong legal team to fight the class-action law suit, Jaffray vs. Lloyd's, which was brought by Lloyd's names who suffered heavy losses stemming from the wave of asbestosis-related claims in the 1980s. The names allege that Lloyd's fraudulently hid their exposure to these losses.

If Lloyd's prevails, it will be able to pursue the estimated 51 million ($80.5 million) owed it by names in asbestosis-related debts. If the names win, however, that would pave the way for them to sue Lloyd's to recover money they have already paid for asbestosis-related losses.

The litigating names refused to join Lloyd's 1996 reconstruction and renewal program, which was designed to rescue the market from the crippling losses of the late 1980s and early 1990s, estimated at about $100 billion. Included in the R&R plan was the creation of Equitas, the runoff reinsurer for the market's pre-1993 long-tail liabilities.

In their suit, the names charge that they were deliberately not told of the full extent of asbestosis liabilities threatening the market, and many of them claim that Lloyd's duped them into joining the market to bolster its capacity to cover asbestosis-related losses.

Sir William Jaffray, a former name, filed a countersuit against Lloyd's in 1997, after he received a demand to pay a premium to Equitas. He was joined in his action by many members of the United Names Organization who have also refused to settle their asbestosis-related debts with Lloyd's.

Although Sir William recently split with the UNO after a disagreement over membership fees, the organization remains heavily involved in the legal action bearing Jaffray's name.

To win their case, the names must prove that at least some of the senior members of Lloyd's -- including several of its chairmen, deputy chairmen or council working members over the period of 1978 to 1988 -- were fully aware of the extent of the asbestosis liabilities set to hit the market, yet fraudulently allowed names to believe their exposure to these losses was minimal. Names must also prove that senior officials at Lloyd's issued no warning to new investors who signed up during a period of heavy recruitment, even though the officials knew of the impact asbestosis-related claims could have on the market. Many names, who joined the market on an unlimited-liability basis, went bankrupt when the asbestosis-related claims hit.

The names allege that not only did senior figures at Lloyd's know about the extent of the liabilities facing the market but they also deliberately kept circulation of a letter detailing the asbestosis threat to a minimum. The so-called Murray Lawrence letter, written in March 1982 by Walter "Murray" Lawrence, then deputy chairman of Lloyd's, recommended that Lloyd's inform names of the impending asbestosis problem. The names claim that this letter was not made widely available.

Lloyd counters the claim, saying that the letter was extensively circulated to underwriters and their agents. Lloyd's is now considering whether to make the contents of the letter publicly available.

The names must prove that Lloyd's was guilty of fraud, rather than just negligence, because Parliament's Lloyd's Act of 1982 grants Lloyd's immunity from all lawsuits other than those charging that the market acted in "bad faith."

During the course of the trial, which is expected to last between three to six months and cost about 25 million ($39.5 million), Lloyd's has announced that it will call upon some high-profile former market players to provide evidence in its defense. Sir David Rowland, the architect of the R&R plan, and Sir Peter Miller, both former chairmen of Lloyd's, are among those expected to appear on its behalf. Murray Lawrence also is expected to testify.

Lloyd's vigorously denies the allegations of fraud.

"The allegations have been around for some time, and they have never been substantiated by names," Lloyd's said in a statement.

Lloyd's, which at the time was self-regulated, was the subject of an investigation by the Serious Fraud Office in 1992 but was never charged with wrongdoing. Since the 1980s, Lloyd's has also undertaken several internal reviews of its regulatory processes. Last year, Lloyd's came under regulation by the Financial Services Authority.

Allegations of fraudulent behavior by Lloyd's are not restricted to the United Kingdom.

According to a statement by the American Names Assn. Inc., Lloyd's agents engaged in a significant recruitment campaign in the United States in the 1970s and 1980s in an attempt to attract new capacity to offset the impending asbestosis losses.

"Lloyd's agents actively recruited amongst middle-class Americans -- many of whom used their homes as collateral -- by offering tantalizing expectations of steady returns and low risk, along with the glamour and prestige of joining an elite British `club', " the names' association statement said. "Agents and executives of Lloyd's concealed information about huge impending liabilities for asbestosis and pollution-related claims being channeled to fall on the new investors," according to the statement.

The U.S. names group claims that Lloyd's concealed from U.S. investors the fact that, by signing up, they were forsaking the protection of U.S. securities laws and would instead be subject to U.K. laws.

The association says that the Jaffray case will serve as a test case for names in the United States, where additional cases against the Society of Lloyd's are now pending. The case of West vs. Lloyd's, pending in California state court, is based on similar grounds as the Jaffray case, according to Theodore Grippo, an attorney for the ANA.

"The importance of the Jaffray case, no matter what the result, is the evidence that will be revealed in court," Mr. Grippo said. "Beyond that, it is very difficult to speculate on what kind of doors the case may open or close.'