The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

Correspondence: 14/01/2004 - Letter John Todd

14 January '04 - Letter John Todd

John Todd
Assistant Manager
Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR

14 January 2004

Re: complaint number xxxx. Your ref: xxxxxxx

Dear Mr Todd

Thank you for your letter of 8 January.

In it you say: "Mr Hirst explained (in his paragraph 16) that he had carefully considered several Opinions that had been provided to the FOS, but had not referred to them extensively because it would make his Opinion excessively long. These Opinions that he considered included Mr Bompas' Opinion."

It seems to me extraordinary that serious allegations of fraud made in the Bompas opinion were completely overlooked in the Hirst Opinion - so much so that at paragraph 16 (to which you refer) he lists the material that he considered but does not even mention the name of Mr Bompas or his Opinion!

The issues on remedy and compensation
16. FOS has not reached or formulated a view on the quantum or method of compensation which would be appropriate in the five lead cases. FOS has been provided with several lengthy opinions. Many of these opinions cover much wider issues but they all include advice on the appropriate remedies to be awarded. The opinions provided included the following:
  1. Joint opinions by Nicholas Warren QC and Thomas Lowe dated 10 May 2001 and 12 September 2001 prepared on the instructions of Equitable;
  2. A joint opinion of Gabriel Moss QC, David Richards QC, Martin Moore and Barry Isaacs dated 19 September 2001 also prepared on the instructions of Equitable;
  3. A joint opinion of Ian Glick QC and Richard Snowden dated 19 September 2001, prepared for the Financial Services Authority;
  4. A joint opinion of Christopher Carr QC and Gabriel Moss QC dated 19 September 2002 prepared on the instructions of Equitable;
  5. An advice and commentary by Clarke Willmott & Clarke acting for some 40 investors.
    I have considered all these opinions and advices carefully. I have not referred to them extensively in this opinion, because it would make an already lengthy opinion excessively long.
Could you please explicitly tell me if the FOS asked Mr Hirst to consider allegations of fraud in formulating his opinion and, if not, why not?

If Mr Hirst has not been asked to consider fraud then his opinion cannot be relied upon as conclusive and in that event I must formally request that if FOS intends to rely upon Hirst for assessment of damages you must yourselves address the points that Mr Bompas raises.

Could you also please confirm that Mr Bompas' opinion is being considered in respect of ALL lead cases. As you say in your letter that my case is covered by all three current lead cases, then surely my evidence must be used in respect of all these three.

If the above two requests are not met I fear that FOS would be in breach of fair process and I will report you to the independent assessor.

You say that "Instructions given to Counsel are always legally privileged and are not disclosed." This surely is a matter of choice for the FOS rather than a requirement of the law. As you tell me that my case is represented by ALL THREE of the lead cases, surely as one of the affected parties it is proper for me to see the representation to Counsel which you have made on my behalf? You are not, I assume, planning to sue Equitable Life and therefore it is surely in the FOS' gift to waive privilege if it so wishes.

A Telegraph newspaper article quotes David Cresswell (12 January 2004) as follows:

"David Cresswell, of the ombudsman, which is handling around 2,500 mis-selling claims relating to guaranteed annuity rates, said: "With each side seeking further legal opinion, any settlement will become very long-winded. When the ombudsman makes a final adjudication on the level of compensation, either the claimants or the society can seek a judicial review."

If there are two parties involved, one being the Equitable Life, can you please tell me who the other party is - is it the FOS as an entity or the complainants? If the complainants are the other party, then surely there is some imbalance of representation, because while the FOS is required to be impartial, only one party is receiving paid legal advice to support its case - namely the Equitable Life. Have the complainants sought further legal opinion or does the FOS take it upon itself to do so, on our behalf?

If I and other complainants represent the other party then surely we too should be afforded a similar weight of legal assistance and we should be privy to any brief given to Counsel in pursuit of our claims?

Yours sincerely

Paul Weir

cc Jane Whittles, Principal Ombudsman
Walter Merricks, Chief Ombudsman
EMAG (for website)