The legal dispute between six former owners of the SRS underwriting agency and major broker Gallagher has been settled out of court.

The terms of the settlement are confidential, and individuals involved in the case have declined to discuss the matter when contacted by insuranceNEWS.com.au.

The SRS partners mounted the action in 2017 in the Queensland Supreme Court, suing Gallagher for $3.6 million plus interest in a dispute over a final payment.

SRS was Australia’s largest Lloyd’s underwriting agency when it was acquired by Gallagher in November 2012. The sale agreement 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 alleged the calculation used by Gallagher in late 2015 was applied in a way that had not been agreed, and resulted in a zero earnout.

As insuranceNEWS.com.au explained in an Analysis in 2017, SRS – later rebranded as part of Gallagher’s Pen Underwriting operation – lost much of its established business with international brokers when Gallagher bought the national OAMPS brokerage for $1.01 billion 17 months after buying SRS.