Equitable Life policyholders begin High Court case
A High Court case brought by Equitable Life policyholders begins today.
The Equitable Members Action Group represents around 21,000 policyholders who lost up to 50% of the value of their pension funds when Equitable Life came close to collapse in 2001.
The group is demanding a judicial review of the Government’s decision not to implement in full recommendations made by Parliamentary Ombudsman, Ann Abraham.
In July of 2008, Ms Abraham published a report on the demise of Equitable, which from the 1950s had sold policies that guaranteed a minimum annuity rate to investors.
The strategy left the UK’s oldest mutual unable to honour its promises and the Ombudsman’s review accused regulators of comprehensive failure and the Government of maladministration.
Ms Abraham therefore recommended the establishment of a scheme that would consider individual claims for compensation.
However, in January, the Government announced that only Equitable Life policyholders who qualified as having been “disproportionately affected” by the near collapse of the insurer would receive compensation.
The action group described the scheme as totally inadequate, arguing that it could take years to implement and might only assist 10% of those who lost money.
The High Court case, which should last around three days, hinges on whether judges consider that the Treasury has acted in a legal and rational manner.
