Equitable drops action against Ranson

By Nikki Tait,Law Courts Correspondent
Published: October 29 2005

Equitable Life has dropped its legal action against Roy Ranson, the society's former managing director and appointed actuary who was in charge when its stance on guaranteed annuities was introduced.

This latest settlement reduces the number of defendants in the High Court negligence action to nine from the original 16.

The society said it had reached settlement terms with Mr Ranson under which it would drop its claim, with each side paying its own legal costs.

The "drop hands" deal follows similar settlements with Ernst & Young, the society's former auditors, two former non-executive directors and three former executives.

But Mr Ranson is the most senior former Equitable executive involved in the case to settle with the society. He was managing director between 1991 and 1997, when he retired, and appointed actuary from 1982 to 1997. He is also a former board director.

It was in 1993 that the society introduced the "differential terminal bonus policy", which later became the subject of controversy and led to a test case over its legality being pursued to the House of Lords. When the Lords found against Equitable in 2000, the society came close to collapse.

Mr Ranson was awarded a CBE for services to the insurance industry in 1996 but then criticised sharply in Lord Penrose's report into Equitable Life in 2004. This accused him of running the society in an "autocratic manner" and of being "dismissive of regulators' views and concerns".

In statement yesterday, Mr Ranson said: "I sincerely regret both the changed prospects for all with-profits policyholders following the House of Lords judgment and the loss of policyholders' money wasted on the litigation against the directors and auditors."

He continued: "The present board should be held to account for this appalling waste of policyholders' money."

Equitable's negligence and breach of duty claim still continues against seven former non-executive directors, as well as two other former executives.

Last night, however, Paul Braithwaite of the Equitable Members Action Group said he believed it was a "total mockery" to pursue the action against former non-executives having settled with the former executive who had been at the heart of many of the decisions taken by the society.

"I'm open-jawed with disbelief," Mr Braithwaite said of the settlement decision.

http://news.ft.com/cms/s/af03e9e6-4817-11da-a949-00000e2511c8.html