Abraham’s report, Equitable Life: A Decade of Regulatory Failure was published in July 2008 and a further report, Injustice Unremedied: the Government’s Response on Equitable Life, was laid before Parliament last week.
In the 2008 report, Abraham found the Government guilty of maladministration and said it should establish and fund a compensation scheme for those who lost money due to the life office’s problems.
But the Government rejected the ombudsman’s recommendations to fund an independent compensation scheme, offering only ex-gratia payments to those policyholders deemed to have suffered “disproportionately” from the firm’s failure.
In her latest report, Abraham says she is unconvinced by the basis of the Government’s rejections of her findings and is concerned by its decision to ask Sir John Chadwick, a retired judge, to advise them on an alternative compensation scheme.
She says there is no detailed timetable for this work and that the link between maladministration and the remedy to be provided has been broken.
The ombudsman says: “The Government’s response to my report provided insufficient support for the rejection of my findings of maladministration and injustice. It also begged a larger question as to what the purpose of regulation is supposed to be.”
Equitable Members’ Action Group spokesman Paul Braithwaite says: “Now is the time for MPs, regardless of party, to support their own ombudsman and the sufferers of the injustices.”
Liberal Democrat MEP Diana Wallis adds: “The Government should do the honourable thing and compensate the losers on the basis of justice, not need.”