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

Media Stories: 05/12/2005 - A letter from Peter Smith published in the FT 5 Dec, 2005

A letter from Peter Smith published in the FT 5 Dec, 2005


Equitable: we did not take easy way


Your coverage of the final settlement of Equitable Life's litigation Lacked your usual balance. Your commentary dismissively asserted that we had entered into an "appallingly misjudged legal foray" (Lombard, December 3).

However, despite five separate articles there was little, if any, analysis of the logic for initially bringing the action. In taking over Equitable in the spring of 2001, the new board's first job was to get a grip on the firm's finances; it was haemorrhaging money and the stock market was in rapid decline. Difficult decisions had to be taken to protect the interests of members. Although it will not be possible to restore the society's fortunes to its pre-2000 position, the situation was stabilised and we continue to make progress.

We had to consider whether any part of policyholders' losses could be recovered from the society's former management and auditors. We understood there was a risk that litigation might not be successful but also that with the prospect of success, we had an obligation to pursue the action.

Lord Penrose stated that the society had been "the author of its own misfortune". In the event, and to the board's great regret, it was not possible to secure a successful outcome. However, I doubt that we would have received thanks from policyholders if we had sat on our hands and done nothing.

As for those of my colleagues, in particular Vanni Treves, the chairman, who have been in the front line in handling this difficult matter, I have a question for you. Is a reputation damaged by trying to do the difficult thing to help our members but ultimately not being successful, or rather by taking the easy option and walking away from the challenge? I, and I think the majority of your readers, would incline to the latter.

Peter Smith,
Deputy Chairman,
Equitable Life, Aylesbury, Bucks HP21 7QW