Hundreds of thousands more Equitable Life policyholders are now likely to receive compensation after the High Court yesterday found against the Treasury in a decade-long battle over payouts.
Two High Court judges condemned the government’s decision to ignore findings made by the Parliamentary Obmudsman last year that there had been regulatory failures and “injustice and maladministration” which led to the firm’s near-collapse in 2000 and caused thousands to lose their savings.
The report, by Ann Abraham, had accused the government of a “decade of regulatory failure”, which led to Equitable Life – the UK’s largest private pension provider at the time – being unable to meet guaranteed annuities, and had demanded compensation for thousands of affected policyholders.
Abraham had found the government guilty on 10 counts of maladministration, however it would only accept five in full, four in part and it completely rejected one.
But in a landmark ruling yesterday, Lord Justice Carnwath and Justice Gross supported Abraham’s recommendation that the qualifying date for victims seeking compensation be moved back from 1999 to the early 1990s.
The Court gave the government 21 days to respond to the ruling, and to detail the actions it planned to take.
Equitable Members Action Group (Emag), the body representing around 21,000 individuals who lost their savings, welcomed the judgement.
“This is a very big win for Emag. Hundreds of thousands more policyholders are now eligible for some form of compensation, and their relative losses are very much bigger,” said its director, Colin Slater.
Shadow financial secretary Mark Hoban criticised the government for appealing against the Ombudsman’s findings, saying that it should “get on with it and give policyholders the justice they deserve”.