Equitable Policy Holders Launch Legal Action

by Robin Pilgrim, LawAndTax-News.com, London

15 July 2004

More than 700 UK policy holders represented by the Equitable Life Trapped Annuitants (ELTA) organisation this week revealed that they have filed a writ against Equitable, arguing that they were mis-sold annuities by the society.

Over-payment of bonuses during the 1990's, and a failure to maintain sufficient reserves for the guarantees that it had offered customers left Equitable unable to honour its policy promises following a House of Lords ruling in 2000, which led to near-insolvency.

Policyholders who opted to receive a with-profits annuity are unable to transfer their investment away from Equitable, and have seen their pension values slashed by as much as 40% as a result of the society's financial woes.

Earlier this year, ELTA warned that it would take legal action if compensation was not forthcoming, and the writ issued at Bristol's Mercantile Court represents the culmination of several months of campaigning.

Claiming that Equitable Life had offered no assistance to the trapped annuitants, ELTA chairman, Peter Scawen announced this week:

"I am delighted so many people have decided to join our action."

Equitable's chief executive, Charles Thomson, meanwhile, has "strongly rejected" ELTA's suggestion that the firm tried to intimidate it into not issuing the writ, according to reports in the UK media.

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