Equitable wins right to proceed to trial against former directors

The application by nine former non-executive directors of Equitable Life to have the claims against them struck out has been rejected by the High Court. The former directors failed in their submission to the Court that Equitable Life's claims against them had no real prospects of success.

Commenting on the decision, Vanni Treves, Chairman of Equitable Life said today: "We are pleased, but not surprised, that Mr Justice Langley agrees that this case should proceed to trial. The Board believes there is a strong claim against the former directors and in the interests of policyholders it has a duty to proceed."

In July, the Court of Appeal unanimously decided that Equitable Life had a sustainable case with reasonable prospects of success against the Society's former auditors, Ernst & Young.

The trial of Equitable Life's claims against Ernst & Young and the former directors is expected to start in April 2005.

-ENDS-

Notes to Editors

The Society's claim against its former directors is that they were negligent and in breach of duty in not taking legal advice before deciding on the differential terminal bonus practice in each year from 1996 to 1998. It also claims that the former directors acted unreasonably in 1999 and 2000 in failing to take appropriate steps to mitigate the risks involved in the Hyman litigation (which Equitable Life lost in the House of Lords) and to ensure that policyholders were aware of those risks.

The strike-out application was heard by Mr Justice Langley from 22 September to 29 September in the High Court.