Equitable to battle on in E&Y litigation

Equitable Life is to battle on with its multi-billion pound action against former directors and auditors, its chairman Vanni Treves said today at the society’s annual general meeting.

Though Treves refused to comment in detail on the case due to legal issues, he did reiterate the society’s commitment to continue with the action.

‘The board regularly reviews the cost effectiveness of the claims and we remain clearly of the view that we are pursuing strong and substantial claims,’ Treves said.

‘I was surprised and disappointed that these claims were not settled before the trial began. Only the defendants can explain why not,’ he said.

Equitable is pursuing former auditors Ernst & Young for more than £2bn, and former directors for a further £1.5bn. Ernst & Young has always maintained that it would fight the claim, and has shown no sign of weakening that position.

Treves also insisted that policyholders continued to support the action, despite one saying during the AGM that the case against directors is ‘less strong than previously thought’.

One policyholder asked Treves at the meeting whether or not he had indeed said to John Sclater, one of the former directors being sued, that he was merely a ‘conduit to deeper pockets,’ those of E&Y, as alleged in pre-trial submissions.

‘As I said I am not prepared for obvious reasons to comment on what has been said or presently unsaid in the course of this litigation. As a general point, if you were to believe everything said in court you would be living permanently in a world of fiction,’ Treves said.

Asked if Equitable would be dropping its mis-selling claim against directors, as requested by the directors last week, Treves said it would not. ‘We are not planning to drop anything,’ he said.

Treves also resisted saying whether or not he and Thomson would resign if the case was lost, saying it was a matter for the board.

E&Y later repeated its view that it does not intend to settle: ‘We have always believed, and repeatedly made it clear to Equitable, that this claim is without merit, and the last six weeks in court have only served to reinforce that view. We have said from the start that Equitable are wasting policyholders’ money,’ a spokesman said.