Angry army suing Equitable Life

AN army of 700 pensioners is suing Equitable Life for compensation, claiming they were mis-sold annuities.

The policyholders, who each paid £1,000 to finance the action, have seen their retirement incomes fall by up to 40% as the Equitable crisis broke.

They bought with-profits annuities between 1998 and 2000. They say the mutual's directors already knew it was in trouble at the time. Equitable argues it has 'very strong defences'.

The Equitable Life Trapped Annuitants (ELTA) is group is being represented by Bristol-based lawyers Clarke Wilmott in the multi-million pound claim at Bristol Mercantile Court.

Peter Scawen, chairman of ELTA, claimed Equitable had done nothing to help policyholders and said: 'I am delighted so many people have decided to join our action.'

The group first announced in April that it was planning to sue Equitable Life.

Equitable chief executive Charles Thomson said the society 'strongly rejected' ELTA's allegation that it had tried to intimidate it into backing off from launching a claim.

He said: 'Any unmerited claim served on the society will be defended vigorously in the interests of all members of the with-profits fund whom the board has a duty to protect.'

Equitable was plunged into difficulties after losing a House of Lords ruling over the right of its Guaranteed Annuity Rate policyholders, leaving it with a £1.5bn liability and forcing it to close to new business.