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‘Equitable bill to top 40m’

Equitable Life’s legal bill is likely to top 40m – 10m more than the society has publicly stated, according to the Equitable Members’ Action Group.

The company’s entire legal challenge – which previously included a 3.7bn claim against former auditor Ernst & Young and a 1bn claim against 11 former directors – is now reduced to bickering over who pays the legal costs of nine former directors after this week dropping its claim against former chief execu- tive Roy Ranson.

Emag chairman Paul Braithwaite warns that eight of the former directors are repres- ented by Allen & Overy on a no- win no-fee basis, meaning that they are unlikely to agree to pay their own costs.

The dropping of the case against Ranson, criticised heavily by the Penrose report for his “autocratic” management style, does not bode well for the continued claim against nine of the original 15 directors, given that eight of them were non-executive directors.

Braithwaite says he can easily muster the support of the 1,000 voting members needed to force an EGM in a bid to oust current chairman Vanni Treves but is holding fire while the case continues.

He says: “The payment to Allen & Overy is likely to be in excess of 10m, raising the total costs of these shambolic cases to over 40m.”

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