The decision, made by Lord Justice Carnwarth, forces the Government to greatly expand the number of policyholders eligible for recompense by rolling back the eligibility date to the early 1990s, as originally proposed by Ombudsman Ann Abraham.
The court held that the Government had misinterpreted several of the Ombudsman’s key findings and that its response “lacked cogency”.
The Government was refused leave to appeal. It will have to reappear before the court in 28 days to explain how it will respond to the judgment.
The claim for judicial review was brought by the Equitable Members Action Group.
EMAG general secretary Paul Braithwaite says: “If EMAG’s members had not paid for this legal action there is little doubt that, despite the Parliamentary Ombudsman’s recommendations for substantial compensation, the Government would have got away with limiting payments to a small number of Equitable’s victims for losses post 1999.
“The effect of today’s ruling is to roll back eligibility to the date originally proposed by the Parliamentary Ombudsman. This is a triumph for Equitable’s long suffering victims.”
Abraham says: “The Government’s response to my report was deeply disappointing, providing insufficient support for the rejection of many of my findings of maladministration on the part of the regulators and my conclusions that injustice resulted from those failings. The court has now found that the Government’s response was in large part unlawful, not being supported by cogent reasons for rejecting my findings.
“How this judgment affects the Government’s proposals for an ex gratia scheme is a matter for others to consider. However, while this judgment is welcome I am very aware that the injustice suffered by many people affected by the Equitable Life affair remains unremedied so many years after the relevant events. I therefore hope that every effort is now made to ensure a just and speedy outcome for all those people.”
An Equitable Life spokesman says: “We welcome anything which will bring forward the prospect of proper Government compensation and closure for our long-suffering policyholders.”
In her report published in July 2008, the Ombudsman found there had been “a decade of regulatory failure” in the regulation of the activities of Equitable Life. She recommended the Government pay substantial compensation to hundreds of thousands of policyholders.
In January 2009, the Government’s response rejected a substantial number of Abraham’s findings of maladministration and injustice. In May, the Ombudsman published a further report, “Injustice unremedied”, in which she criticised the Government’s response.