Equitable Life compensation date set

By THIS IS MONEY
Updated: 10:14 EST, 24 February 2010

The Government said today that it would outline its plans to compensate Equitable Life policyholders within 14 days of receiving a report on the issue.

Justice at last: Protest groups have accused government of dragging its feet.

In January last year it promised to make ex-gratia payments to people who had been 'disproportionately affected' by the problems at the society, and asked former Appeal Court judge Sir John Chadwick to provide advice.

Sir John is due to publish his final report on the redress that policyholders should receive in May, and the Government today said it would set out details of its payment scheme within 14 days.

But it did not say how soon after the publication of the report it would begin to make payments to policyholders.

The news is likely to bring little comfort to people who lost money in Equitable Life.

The Equitable Members Action Group (Emag) recently accused the Government of dragging its feet, as it has already been more than a year since Sir John was appointed to look into the issue of redress.

The group has also called on the Treasury to make interim payments totalling £214m to 44,000 with-profits annuitants, who have seen their pensions more than halve due to the problems at the society.

Parliamentary Ombudsman Ann Abraham called on the Government to set up an independent tribunal to calculate compensation for policyholders after finding 10 instances of maladministration by regulators and Whitehall officials in relation to Equitable in the period leading up to December 2001.

• Jeff Prestridge: If we lived in a just world where financial wrongs were quickly righted, the Equitable Life scandal would have been resolved long ago

The Government rejected some of her findings of maladministration, but Emag later won a High Court victory when it was ruled that the Treasury had been wrong to reject certain findings by the Parliamentary Ombudsman.

Equitable Life was brought to its knees in 2000 when it lost a legal battle in the House of Lords over the rights of policyholders, forcing it to close to new business.

Worth £26bn in its prime, it now has around 200,000 with-profits policyholders and a £5.5bn with-profits fund.