LETTERS TO THE EDITOR: Published by the Financial Times July 26th, 2003 and reproduced here with the consent of the writer.

From Mr Michael Josephs

Sir, The essence of the argument of Peter Martin, who is defending a case in the High Court, is an impassioned attack on the upper levels of our judiciary, combined with snide references to the action groups that are trying to deal with the aftermath of at least a decade of managerial incompetence at Equitable.

There is another view of the outcome of the Hyman case in the House of Lords. It is that the directors of Equitable chose to conduct the case in such a way that they almost ensured that the Lords came to the conclusion that they did. They even failed to quote the most relevant precedents, so it is not surprising that the Lords decided as they did.

However, we must note that those directors, among whom Mr Martin had the greatest seniority, failed entirely to ensure that, in what was supposed to be a mutual society, those members who did not have a guaranteed annuity rate (GAR) - the majority by a large margin - were properly and separately represented at the court hearings.

Did the directors tell the court how tight their finances were, and why this was? One does not believe so. Did they explain that none of the non-GARs had been warned about the guarantees held by their predecessors? Certainly not.

Did they concede that they had been warned about the problem by senior colleagues in the actuarial profession at the beginning of 1990? Not a word. Did they mention the prudent measures that might have alleviated the problem while there was still time (and avoided the whole court proceeding)? There is nothing in the published reports to indicate such disclosure.

As they used to say in the forces, it looks as if Mr Martin's troubles are the result of self-inflicted injury on the part of the then directors. What makes so many of us white with anger is that the actions of those directors harmed not just themselves, but more importantly the retirement prospects of a million policyholders.

It is unfortunate Lord Penrose's report is delayed until the autumn but I urge FT readers to defer judgement on these matters until it is published.

Michael Josephs