Summary
In July 2008 the Parliamentary and Health Service Ombudsman presented a Report concerning the prudential regulation of the Equitable Life Assurance Society.
That Report, 'Equitable Life: A Decade of Regulatory Failure' (HC 815), made ten findings of maladministration, determined that this maladministration had led to injustice, and made two recommendations.
This Report, 'Injustice Unremedied: the Government's Response on Equitable Life' (HC 435), presents the Ombudsman's assessment of the Government's response to that Report.
The Ombudsman's two recommendations, put forward in the July 2008 Report, were:
- That the Government should apologise to policyholders for the serial regulatory failure; and
- That the Government should establish and fund a compensation scheme.
The Public Administration Select Committee also reported on this matter ('Justice Delayed: the Ombudsman's Report on Equitable Life' (HC 41-I).
In its January 2009 response (Cm. 7538), the Government accepted some - but not all - of the Ombudsman's findings and apologised to policyholders. The Government decided to reject the central recommendation - that the Government should establish and fund a compensation scheme.
Instead, Sir John Chadwick was appointed to advise the Government on the extent of relative losses suffered and what proportion might be attributed to the maladministration before some ex gratia payments were made.
In this Report, the Ombudsman expresses disappointment that the Government rejected many of her findings and is unpersuaded by the basis for those rejections. Three concerns about the alternative approach - or 'Chadwick process' - are brought to Parliament's attention:
- It breaks the link between injustice and remedy;
- The lack of clarity about the process; and
- The selective use of the Penrose Report in the Government response.
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