High Court decides – partially – in favour of Equitable Life policyholders

EMAG – the Equitable Members Action Group, which represents some 21,000 Equitable Life policy holders following the near-collapse of the firm in 2000 – is being reported to have won support from the High Court in its case against the government over the scale of the compensation scheme being offered to Equitable Life policy holders (the EMAG site has not yet been updated with the news).

Specifically, the High Court has ruled in EMAG’s favour on the issue of the valuation of the mainstream pension business between 1990 and 1996 which, EMAG believes, opens up the case for many more people to receive compensation – and, simulatenously, that their claims are therefore much bigger. Nevertheless, the High Court also ruled that it was for the government and parliament to decide what were the appropriate remedies for compensating policyholders. The government has previously commissioned a High Court judge – Sir John Chadwick – to investigate claims for limited compensation after 1999 against a criteria of individual hardship although campaigners consider this insufficient in the context of the report of Ann Abraham, the Parliamentary Ombudsman, which recommended a wider compensation scheme including eligibility criteria going back to 1990. The ruling does not appear to challenge the terms of reference for the Chadwick Review nor to allow ex gratia, rather than systematic, payments.

The government has 21 days to state what action it will take in respect of the ruling. EMAG’s legal costs (thought to be over £300,000) were awarded, but only to the value of 60% on the grounds that ‘The claimants were the substantial victors but a significant discount is appropriate’.

Vince Cable, Liberal Democratic party leader, will hold a parliamentary debate next Wednesday calling for Equitable Life policyholders to be compensated in full.

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