In one of the UK's biggest corporate legal battles, Equitable Life is claiming up to £2 billion from its former auditors, Ernst & Young for alleged negligence. They are claiming that the auditors did not report the risks over guaranteed annuity rates between 1997 and 1999, and say that the loss to policyholders prevented the firms' sale in 1998 when it was in position to be bought by HBOS.
A negligence claim is also being brought against 15 former directors of Ernst & Young for up to £1.7 billion over alleged failure to take legal advice before deciding on the company's bonus policy from 1996-98.
Our view
They are all to blame. The provider, auditors and the regulator. The only people losing out are the public. Either way the public will suffer through the fault of people at the top not doing their jobs.
Whether it is Equitable policyholders, E&Y staff if they lose jobs, liability insurers of the people being sued (who do you think will pick up the tab then? Increased premiums?). They will all suffer which means we suffer. It is you and us that will end up paying in the long term though. It always is.