Equitable Life
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Equitable Life (founded 1762) is a pension company in the United Kingdom. It nearly collapsed in 2000 and had to cut the pensions and retirement savings of its policyholders to stay afloat. This caused a large public outcry.
The UK government's Treasury commissioned Lord Penrose to lead an inquiry into Equitable Life, which took two and a half years to complete. His 818-page report, published on March 8, 2004, found that the company made over-generous payouts to policyholders and was therefore the "author of its own misfortunes".
Nonetheless, in April 2005 Equitable Life launched a £4 billion legal action in the High Court. It is claiming £2 billion from 15 ex-directors whom it claims were negligent in their duties, a charge they deny. It also demands a similar sum from its former auditors, Ernst & Young, claiming that they signed off the company's accounts without warning of the problems that led to its collapse. However, Ernst & Young say they could not have told the society anything it did not already know.
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