Present: Committee: Alex Henney (chairman), Paul Braithwaite, Rodney Allen, Leslie Seymour, Betty McCann, Colin Slater, Tom Lake.

Members: John Newman, Gabrielle de Pauw, Jeremy Lever QC, Andrew Pike, Alan Wilson, Trudl Winkler

Minutes of the 14th August meeting were approved.

1. Treasurer's Report
   Treasurer reported that EMAG has in excess of £ 100,000 deposited, 25%of which is outlined for identified expenses over the next few months. Arrangements were made for the Treasurer's extended absence during October.
   
   
2. Mailing - Governance
   Colin Slater reported that the name and address lists from the earlier mailing where now usable and complete, having now been entered and corrected. This included the 7,500 members and 11,000 others who had returned just the response to our earlier mailing on Governance. Cost estimates of the next mailing were given, which will contain proposals on amending Memorandum and Articles, invitation to join (for those not already members) and a suggestion to take up issues with MPs.
   
   It was decided that no attempt would be made at this time to collect signatures or support for an EGM. The existing collection should be used to support EMAG's proposals when presented to the Board, to allow time for a positive response and/or dialogue.
   
   
3. Letter to VT and progress re Penrose drafting :
   A reply had been received from Tony McGarahan at Equitable (the new internal head of communications) stating that the Statutory Returns (solvency returns) constituted the report to members on the valuation of assets and the setting of bonuses as required in article 65 of the ELAS articles. Alex Henney subsequently obtained confirmation from FSA that the Statutory Returns were not appropriate as the report to members mentioned in Article 65. AH to write to the Chairman. A draft was circulated and amended, to request again a report, per the Articles.
   
   Alex Henney had been through the Baird report, Corley report and others and is working on a draft of EMAG evidence for Lord Penrose. There is a need to bring to a useful state the discussions on the causes attributed to members' losses. Oliver Parsons had produced arguments for a 'black hole' in the Society's finances, whilst Tom Lake had undertaken calculations which did not confirm any hole. Colin Slater pointed out that a much more detailed investigation was required. Issues raised - difference between book and market valuation as described in 'With Profits without Mystery' (!989 Roy Ranson and Chris Headdon) - differences in treatment of annuitants and non-annuitants . It was noted that the Independent Actuary's report in the Compromise Scheme seemed to set some limit on the mismatch of policy values and assets (10% shortfall, including about 5% for GARs - but the exact meaning of Mike Arnold's statement was unclear).
   
   A budget was approved for independent professional forensic analysis and development of this investigation, under the supervision of CS.
   
   
4. Legal action by Equitable against Equitable's Legal Advisors:
   At present Equitable had not proceeded against lawyers DWS. Andrew Pike had written to the Society's Chairman making the point that the legal advisers had not cited an absolutely fundamental case precedent from the House of Lords which supported the total discretion of the Directors under article 65 of the ELAS articles (and into which Lord Steyn had implied a term in his House of Lords' judgement). This omission suggested, prima facie, that the Society's solicitors may have been negligent in their advice to the Society.
   
   AP has received no reply, despite a follow-up letter. Jeremy Lever remarked that the arguments cited might not have helped in regard to the issues in the Hyman case but could have helped with the supplementary ring-fencing decision which triggered the crisis in Equitable. JL to endeavour to facilitate an answer.
   
   
5. Legal action against the regulators :
   Andrew Pike circulated judgements in two cases which indicated the extreme difficulty of obtaining judgement against the regulators. These were the cases against the Savings and Investment Bank (Isle of Man) and that against BCCI. In both cases the claimants appeared to have stronger grounds, but in neither case was the claim upheld. "Misfeasance in public office" has to be proved and this is a very high hurdle. Jeremy Lever remarked that unless there is a European directive setting a higher standard of supervision there would be little chance of redress by legal action against the regulator. JL, RA and LS to investigate.
   
   
6. Investigation of potential violations of Human Rights in the House of Lords hearing:
   EMAG to explore whether there may be grounds for progress towards compensation as the outcome of the House of Lords. The European Convention on Human Rights may be applicable. Further discussion with member of the committee will follow. It is uncertain whether Herbert Smith has been briefed to explore this avenue.
   
   
7. Meeting of all Action Groups (E7 Group) on October 2nd:
   Leslie Seymour, Colin Slater and Paul Braithwaite had attended for EMAG. Leslie reported that the groups had recognised that they had somewhat different constituencies and modes of operation but that there is a recognised need to co-operate in respect of Government compensation. EMAG, EPHAG et al had agreed that this was first priority. The meeting was a useful exchange of strategy, in confidence, with no communique. It was noted that the Consumers' Association was now in discussion with the group, thanks to an EMAG initiative.
   
   
8. New Website Organisation :
   PB reported that the restyled and reorganised website had just gone live with a smooth handover. It had attracted positive comment and was judged to be very much more easily navigable then before. PB was asked to convey thanks and appreciation to designer, Jane Saunders. Along with the car sticker, this gives EMAG an improved public face.
   
   
9. Deloitte, Bacon Woodrow Review - Compensation for claimants who left before the Compromise :
   PB reported on the FSA inspired actuarial review of the position of policyholders who had left before the Compromise to preserve their claims. Bacon & Woodrow Deloitte had been commissioned to assess the magnitude of possible loss. It is understood that Equitable and the FSA have had the report in draft since June but have delayed publication whilst orchestrating a strategy. The report's conclusion is that policyholders who left were of the order of 5% disadvantaged, compared to average pension performance - after taking into account average MVAs at those providers.
   
   However, rather than simply actioning the conclusion Equitable is now suggesting, with support from another opinion from Gabriel Moss QC, that policyholders would find it difficult to substantiate claims of misselling and that recission is inappropriate.Hence, the Society will propose in a few weeks a binding new Section 425 compromise for the 70,000 not covered by the last compromise who left between July 16th 2001 and Feb 8th 2002.
   
   PB expressed the view that late-joiners have a strong case to be regarded as a separate class of creditor. TL noted that, given the continuing lack of transparency by Equitable, it is not yet possible to tell where justice lies.
   
   
10. AOB:
    The committee thanked Gabrielle de Pauw for taking on the phone response task in regard to the car stickers.

Next meeting: Provisionally, 11th November. Any EMAG member wishing to attend, please contact Paul Braithwaite at emagpr@yahoo.com

Tom Lake/Paul Braithwaite

8th October 2002