10 July '03 - Minutes of the 31st committee meeting of EMAG

Held at:       RAC Clubhouse, Pall Mall, London.

Present:      Committee: Alex Henney, Colin Slater, Paul Braithwaite, Tom Lake, Leslie Seymour, Rodney Allen, Chris Carnaghan,
                   Member: Sir Jeremy Lever (part)

Apologies:   Betty McCann, Michael Neal

In attendance: Prof Mads Andenas (part)

1. Committee welcomed the new committee member Chris Carnaghan, who had accepted invitation to join by co-option.
   
   
2. In the Treasurer's absence, PB circulated the summary of financial movements to July 1st, which was signed by all committee present. The invitation to renew subscriptions had proved successful. The current unfettered funds balance exceeds £70k.
   
   
3. European Law: Leslie Seymour reported on his extensive investigation into European Laws and Directives. In particular, LS summarised the recent Dutch case of La Vie D'Or. Though subject to appeal the conclusion thus far has been to place responsibility with the accountants for breach of duty of care to policyholders. The regulator's duty was interpreted as solely to ensure that the regulator ensured conformity with the law. Whilst in the UK in the past there has historically been a focus on policyholders' Reasonable Expectations (PRE), there is no equivalent in the EC directives . Prior to 1992 there was judged to have been inadequate reporting of solvency and adherence to basic business rules such as the procedure for selection of directors.
   
   LS places particular emphasis on the Third Insurance Directive, which from 1992 included regulation of mechanisms within an assurance company. Leslie reported that this new requirement made the directive stronger than the EC banking directives.
   
   Committee approved LS's expenditure to date, including the translation of La Vie D'Or, which was within the prior approved budget.
   
   
4. Prof Mads Andenas (director of the British Institute of International and Comparative Law at the University of London) made a presentation and proposal for an academic evaluation of the prospects for harmonising relevant UK and EU legislation. With input from JL, six issues to be addressed were defined. MA to formalise and submit a proposal to the EMAG committee.
   
   
5. House of Lords study of Regulators: Alex Henney described the extensive submission he has made on EMAG's behalf about the deficiencies in UK regulation under the current remit to the FSA. Post Nov 30th, 2001 the FSA is accountable to no-one - neither the Parliamentary Ombudsman nor the National Audit Office. An honorarium for AH's extensive works was proposed and agreed.
   
   
6. Parliamentary Ombudsman's report: A thorough discussion concluded that the report is regarded as being shabby, flawed and with conclusions that have a strategic ramification. As such, it was the unanimous conclusion of the committee that EMAG should seek leave of the court for a judicial review. AH has drafted a comprehensive critique and comparison with the earlier, more critical internal FSA Baird Report. Tom Lake agreed to lead this project. TL and PB to progress negotiations with selecting a possible barrister and solicitors. PB to work with Bell-Pottinger on a campaign targeted at MPs known to be sympathetic to ELAS policyholders for when MPs reconvene in September. Any 'claim' in seeking a Judicial Review must be lodged by September 30th.
   
   
7. Database development: Colin Slater reported that his project to re-classify all known policyholder addresses/postcodes has been completed and can now be tested for the cost-effectiveness of targeted communications.
   
   
8. Commissioning expenditure: It was agreed that no expenditure would be authorised without prior proposal and committee approval, except in exceptional circumstances. Because the recent period has been particularly active, the Treasurer will be asked to prepare a summary at August 31st of all known expenditure and an ongoing log of all commitments.
   
   
9. Legal meeting with Equitable Life: Rodney Allen and AH reported on their meeting with Charles Thomson and solicitors Herbert Smith on July 2nd. EMAG had commissioned solicitor Andrew Pike to prepare a legal dossier on the prima facie case against the society's former legal advisors, which had been submitted in advance. EMAG had asked that the meeting be confidential. RA to draft a confidential minute, to be sent to CT to confirm that it accurately reflected what had been discussed.
   
   
10. AOB: PB reported on his contacts with the subject of the Ombudsman's report, Mr P. Also that, since the Penrose report has yet to begin Maxwellisation, it will almost certainly not be published before October.

Next Meeting: 6.45pm for 7.00pm Tuesday September 16th RAC Clubhouse, Pall Mall (Small Mall Room). Any EMAG member wishing to attend should E mail a request to: emagpr@yahoo.com, as numbers are limited.

Paul Braithwaite
15th August, 2003