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Equitable wins vote but the legal battle goes on

Beleaguered Equitable Life has got a much-needed boost after

policyholders voted overwhelmingly in favour of its compromise deal

aimed at stabilising the society.

Exceeding most expectations, the deal got the backing of 97.3 per

cent of guaranteed annuity policyholders, with 98.6 and 99 per cent

of the two non-GAR policyholder categories. The High Court has to

approve its implementation.

But despite chairman Vanni Treves describing the news as “an

important milestone in the society&#39s journey to stability”, IFAs

believe the problems are far from over and expect thousands of

policyholders to desert if the deal is implemented.

Some IFAs say the deal could wipe hundreds of millions of pounds from

the value of Equitable&#39s with-profits fund.

It seems likely to face a raft of legal challenges as policyholders

who left the society before the vote sue for misselling. Current

members would be unable to pursue further legal action after the vote.

IFA Whitechurch Securities chairman Kean Seager believes

policyholders who joined Equitable over the past two years but have

left have an excellent chance of success. He says: “I am pleased the

scheme has been voted for but it is not plain sailing from now on.

Everybody who took out a policy over the past two years has a very

good case. It should be remembered those members who stay with

Equitable will suffer because the compensation would come out of

their profits.”

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