UK - Equitable Life policyholders have been given permission to proceed with a full judicial review hearing, over the government's failure to implement the Parliamentary Ombudsman's recommendations on compensation.

The Equitable Members Action Group (EMAG) launched the legal action against the government in April 2009 over its response to the Ombudsman's report, which included an apology for maladministration and announced Sir John Chadwick to advise on the establishment of 'ex gratia' payments to members "disproportionately" impacted by the near collapse of Equitable Life. (See earlier IPE article: Gov't offers Eq Life apology but limits compensation)

However, EMAG claimed the terms of reference for the payment scheme are so narrow it excludes around 90% of the policyholders affected by the situation, while the government failed to provide "cogent reasons" for its refusal to accept some of the Ombudsman's recommendations. (See earlier IPE article: Gov't faces Eq Life legal challenge for compensation)

Following the initial challenge Mr Justice Gross of the High Court has given permission for EMAG to take its case forward to a full judicial hearing as the action raised matters of "major consequence" to a large number of past and present Equitable Life policyholders.

He also added the case concerns "questions of wide general importance for public administration" so ruled it was a "manifestly appropriate" case to go forward to a full hearing.

In addition, the judge appeared to agree to calls from EMAG to expedite the case - on the basis of the long delays since the Equitable failure was first revealed - by directing the full hearing should take place "as soon as reasonably practicable", giving HM Treasury until 24 June 2009 to prepare its defence.

Stephen Grosz, a spokesman for Bindmans - the solicitor representing EMAG - said: "We are pleased the court has recognised this case is important for a large number of ordinary people who have suffered substantial hardship over a considerable period.

"For them, the story of the Equitable collapse has been one of obfuscation and delay. EMAG's challenge raises serious questions about the legality of the Government's response to the Ombudsman.  We look forward to advancing those arguments at the earliest opportunity," said Grosz.

The latest instalment in the Equitable Life saga follows the Ombudsman's decision to submit a special report to Parliament earlier this month that claimed the government's 'ex gratia' plan would not remedy the injustice she had uncovered. (See earlier IPE article: Ombudsman criticises gov't over Eq Life response)

She acknowledged she had no power to force the government to comply with her recommendations, and claimed it was now a matter for Parliament, but added despite being served paper in relation to the judicial review "it is not my present intention to take an active part in the proceedings", although added that she reserved the right to change her mind in light of any subsequent submissions.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

 

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