Government to adhere to Equitable Ruling
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 Ombudsman.
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 John.
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 to take.
"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.