Axa customers get their day in court

A group of angry policyholders of Axa, the insurance giant, will have a chance to put their case in court during the legal battle that will set a precedent for who owns £20bn of funds locked in UK life companies.

A group of angry policyholders of Axa, the insurance giant, will have a chance to put their case in court during the legal battle that will set a precedent for who owns £20bn of funds locked in UK life companies.

At least three policyholders will testify today or tomorrow in the High Court case that will establish whether Axa can go ahead with proposals to distribute most of its surplus "orphan assets" to its shareholders rather than policyholders.

Axa's lawyers told the court yesterday that policyholders have no claim to the £1.7bn orphan assets, because they had not contributed to them.

David Richards QC, for Axa, said: "The evidence of the Axa companies is that the current generation of policyholders have not contributed to the inherited estate, which existed before any current policies were taken out. The inherited estate represents what was the estate 30 or 40 years ago, together with investment returns on it."

Axa has offered payments of about £400 to qualifying policyholders in return for explicit agreement that the fund belongs to the company. About 530,000 policyholders have agreed to this, but it is being contested by the Consumers' Association, which claims Axa is proposing to hand out only 30 per cent of its pot to policyholders, with the rest going to shareholders. It says Axa should comply with Treasury guidance to give 90 per cent to policyholders.

A decision is expected on Thursday.