During the recent legal battle at the High Court brought by Equitable Life against accountants Ernst & Young and a group of former Equitable directors who are contesting the claims, Charles Thomson, chief executive of Equitable Life, during cross-examination, questioned the 'realism' of expecting him to personally sift through all the information received by the company. He also denied giving the court a 'misleading' account of legal advice to the groups' board.
Equitable Life 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. The hearing is expected to last up to eight months.
Our view
We have to agree that no person can read every single piece of paper, however if you are paid big bucks then we would at least expect the boss to take an interest in the financial solvency of a firm.