Equitable Life policyholders have new hope of compensation following a High Court ruling giving them the right to challenge the Parliamentary Ombudsman's dismissal of a test case.
The decision marks a small victory for Equitable investors, putting ombudsman Ann Abraham under pressure to reopen her inquiry.
Mr Justice Moses ruled last week that the Parliamentary Ombudsman's test case should be opened to judicial scrutiny.
The Equitable Members' Action Group pursued the action in the courts following questions raised by Conservative MP Andrew Tyrie in a House of Commons debate with Treasury financial secretary Ruth Kelly in March.
Kelly issued a statement last week admitting that she had been wrong to say that retrospection would prevent the case being looked at again.
The pressure on Abraham is growing following Equitable's announcement that it does not intend to pursue plans to sue the Government. Abraham has written to MPs to ask whether they think she should reopen her inquiry, giving them until May 21 to respond, when she will make her final decision.
The movement to push Abraham to reopen her inquiry is gathering momentum, with Labour MP Ian Gibson tabling an early day motion this week requesting that she reopens the inquiry and extends its remit.
The Penrose report left policyholders with little recourse for action by placing the primary responsibility for the firm's collapse with on former directors.
The report highlighted both Government and regulatory failure but said it was secondary to the directors' responsibilities.
Emag spokeswoman Liz Kwantes says: “This is a small victory for the policyholders. It means that the ombudsman may have to extend the brief of her report and look further into the history of the company.”