The six former owners of an underwriting agency acquired by Arthur J Gallagher in 2012 are suing the global broker, claiming $3.6 million plus interest in a dispute over a final payment.

SRS, which was Australia’s largest Lloyd’s underwriting agency, was acquired by Gallagher in November 2012 under an arrangement that included a final “earnout” payment to be calculated on the amount of commissions earned over a three-year period ending in December 2015.

Documents filed by the six SRS partners in the Queensland Supreme Court say the calculation used by Gallagher in late 2015 was applied in a way that had not been agreed, and resulted in a zero earnout.

No date has yet been set for the case to be heard, and Gallagher has not yet responded to the claim.

insuranceNEWS.com.au understands that none of the senior Gallagher executives who negotiated the deal now work for the company.

Paul Lynam, who was the principal SRS shareholder, declined to discuss the history or technical details of the case when contacted last week by insuranceNEWS.com.au.

A spokesman for Arthur J Gallagher Australasia told insuranceNEWS.com.au the matter is “confidential and going through the legal process. As such, it would be inappropriate to comment at this time.”

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