Equitable Life policyholders prevail against the Parliamentary Ombudsman (PO):

EMAG has been given the green light in the High Court by Mr Justice Moses to proceed with its claim for a judicial review against the Ombudsman's much-criticised report of last July into the Equitable Life.

Permission was granted to challenge Ann Abraham (the PO) on two fundamental errors of law: her non-inclusion of the conduct of the Government Actuary's Department (GAD) and for accepting the concept of so-called "light touch regulation". "Light touch" also featured very prominently in Ruth Kelly's statement to the Commons, yet it was dismissed by Lord Penrose. EMAG claims that it has absolutely no foundation in the prevailing legislation (the Insurance Companies Act 1982), against which standard the PO should have judged maladministration.

EMAG maintains that the PO's report, which exonerated the FSA and has been invoked by Ruth Kelly as a reason to deny compensation to policyholders, was sloppy and legally flawed - a view reinforced by the findings in Penrose's report.

Alex Henney, chairman of EMAG said: "This triumph has been achieved without any support from Equitable's board, despite it describing the PO as the only way forward. Had it not been for EMAG's determination to fight for justice and the unstinting contributions of EMAG members, Ann Abraham would not have been forced into her U turn and this route would not be available. Not only has the board not lifted a finger, it is regrettably recommending members to vote against proper funding of EMAG's political and legal campaign for government compensation of which this forms a part. EMAG urges members to send a message of support for EMAG to the board by voting yes to its resolutions."

The case will probably not come to court before the autumn which will serve to keep the pressure on the Ombudsman who told the court that she will announce what she intends to do by way of follow-up study and why, before Parliament's summer recess.

Paul Braithwaite, General secretary of EMAG said:
"EMAG hopes that the PO will now concede that she will have to do a proper job next time around, embracing from 1988 to December 2001, including revisiting the period of her challenged report. And this time she will be expected to take evidence from complainants and experts and to rigorously challenge the regulators. The Penrose report provides a sound body of evidence of serial regulatory failure from which to start."

For further information contact: Paul Braithwaite

Editor's Notes:

1. The third strand of EMAG's claim, for a review of Policyholders' Reasonable Expectations, was dismissed on the basis that it primarily a factual matter.
2. The Judge declined to set a cost limitation order, so EMAG is faced with needing to raise a further £100,000 plus legal fighting fund.
3. The Equitable Life AGM will take place on May 19th and at that time members will vote on EMAG's Special Resolution to vote £2m to enable EMAG to continue its campaign for government compensation, since the Equitable's board has said that it does not have 'clean hands' and will not itself be pursuing government.