21 October 2009
Thousands of Equitable Life policyholders scandal could be in
line for government compensation following the High Court ruling on
the 15th of October against the Treasury (see the TPAS
news item dated 16th October).
Two senior judges said the Treasury had acted unlawfully earlier
this year in rejecting many of the findings of the Parliamentary
Previously following the Treasury's decision to disregard many
of Ms Abraham's conclusions it instructed Sir John Chadwick, a
retired judge, to devise a compensation package within strict and
limited guidelines. Opposition groups warned that up to 90 per cent
of the victims could miss out under the remit given to Sir
Lord Justice Carnwath and Mr Justice Gross said the Government's
response to Ms Abraham's report "lacked cogency" and gave the
Treasury 21 days to respond and outline the action it now expects
"This is a triumph for Equitable's long-suffering victims," said
Paul Braithwaite, general secretary of EMAG. "If EMAG's members had
not paid for this legal action, there's little doubt that, despite
the Ombudsman's recommendations for substantial compensation, the
Government would have got away with limiting payments to a small
number of Equitable's victims."
Last year, Parliamentary Ombudsman Ann Abraham said the
Government was guilty of "a decade of regulatory failure" in the
build-up to Equitable being forced to close to new business in
2000. Her report recommended substantial compensation for hundreds
of thousands of policyholders. However, in her report the
Government accepted only five findings of maladministration in
full; it accepted four in part and rejected one.
The Government must now change the qualifying date for victims
seeking compensation from 1999 back to the early 1990s. Liam Byrne,
chief secretary to the Treasury, said he will advise Sir John
Chadwick to adhere to the ruling.
The court did, however, uphold the Government's right to offer
only limited compensation to victims. The date for the publication
of Sir John's report remains still remains unknown.