EQUITABLE LIFE MEMBERS
Equitable Life with-profits annuitants reach settlement
Last Updated: Thursday, January 10, 2008 05:25 PM
PRESS RELEASE 10 January 2008
firm Clarke Willmott secures settlement for more than 400 with-profits
annuitants following long-running mis-selling claim.
Willmott has agreed a settlement of the action brought against
Equitable Life by over 400 Equitable Life with-profits annuitants, the
trial of which was due to start in the High Court on 28 January 2008.
The details of the settlement are to remain confidential.
group of 407 Equitable Life with-profits annuitants brought
proceedings in the High Court in 2004.
They based their claims on allegations that they had been mis-sold
their annuities by Equitable Life’s salaried sales force between
1990 and 2000 during the period of management of the former Equitable
claimants’ complaints were, firstly, that the complexities of the
product itself, and consequently its risks, were not explained to
them. Secondly, they said
that the additional risks posed by being dependent for their income on
Equitable Life’s with-profits fund and the weakness of that fund
were also not explained.
Life’s with-profits annuity is an investment linked annuity with the
income provided being linked to the performance of the Equitable’s
With-Profits Fund. Equitable
has recently obtained the backing of the overwhelming majority of its
with-profits annuitants to the transfer of these contracts to the
Morfee, the partner at Clarke Willmott representing the claimants,
said: “The claims were exceptionally complex and involved a detailed
analysis of a very intricate financial product and the regulatory
process surrounding the advice which must precede the sale of such a
we had to reproduce the detailed examination of Equitable’s finances
undertaken by Lord Penrose, whose report to the Treasury published in
March 2004 first revealed that Equitable Life’s financial
difficulties were due not solely, or even mainly, to their
difficulties with guaranteed annuity rate policies, but were caused
because the whole business model was flawed.”
claimants are all elderly and, sadly, some have died during the course
of the proceedings. At
the date of settlement the average age of the claimants was 74.
Willmott devised a novel and highly effective approach to the claim. A special purpose company, ELTA Claims Limited, was
established whose directors were drawn from the action group
representing the annuitants (Equitable Life Trapped Annuitants or ELTA
for short). The
individual claimants irrevocably delegated authority to the company to
conduct the claims on their behalf.
Willmott partner Paul Chapman, also representing the claimants, adds:
“This has been a long and complex action. We are absolutely
delighted with the result as are the individual claimants.
They can now continue to enjoy their retirement without this
burden hanging over them.”
LEGAL PRESS ONLY
action was led by financial services litigation partners Robert Morfee
and Paul Chapman with strong support from commercial dispute
resolution partners, William Whiteley, Michael Clarke and senior
associate Owen Williams.
paralegal team, led by associate Jon Green, provided the individual
case handling and document handling services. Jon also had
responsibility for three of the nine lead claimants. The other six
lead claimants were each represented by an individual solicitor drawn
from the financial services litigation team, Philippa Hann, Stephen
Searle, Sharon McHugh and Stephen Cannell.