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Equitable victims triumph - Court overturns Government rejection of Ombudsman’s report
Policyholders’ action group EMAG has won another significant victory in its battle to get proper compensation from the Treasury for victims of the Equitable Life scandal. EMAG’s successful High Court bid to quash the Government’s response to the Parliamentary Ombudsman’s report into the failed regulation of the Equitable Life Assurance Society means that the Government will have to greatly expand the number of policyholders eligible for recompense.
Granting the claim for judicial review brought by the Equitable Members Action Group (EMAG) the Divisional Court held that the Government had unlawfully rejected the Ombudsman’s findings that maladministration by the regulators had caused injustice to policyholders. The court held that the Government had misinterpreted several of Ombudsman Ann Abraham’s key findings, and that its response, prepared over six months, simply “lacked cogency”.
“If EMAG’s members had not paid for this legal action there’s little doubt that, despite theParliamentary Ombudsman’s recommendations for substantial compensation, the government would have got away with limiting payments to a small number of Equitable’s victims for losses post 1999,” said EMAG’s general secretary Paul Braithwaite. “The effect of today’s ruling is to roll back eligibility to the date originally proposed by the PO – July 1991. This is a triumph for Equitable’s long suffering victims.”
Equitable Life closed to new business in December 2000, since when policyholders’ pensions have been substantially reduced by successive policy value cuts. In July 2008 the Ombudsman’s report “A decade of regulatory failure” recommended substantial compensation for hundreds of thousands of policyholders. Despite this, in January 2009 the Government rejected large parts of Ann Abraham’s report.
The effect of the ruling is to extend back to the early 1990s the period of policyholder losses which the Government should compensate. EMAG welcomes the Government’s compliance with the decision of the Divisional Court. The new Government Command paper 7762 confirms that the Government accepts three further major findings of injustice and has revised it terms of reference to Sir John Chadwick accordingly. This greatly expands the scope for compensation to victims of the Equitable scandal.
EMAG is meeting with Sir John Chadwick to express its views on methods for calculating proper compensation compensate.
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