AXA faces High Court appeal over legal costs

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The Independent Online

The Consumers' Association said last night it would apply to the High Court to force AXA, the French insurance giant, to pay the legal costs of policyholders who are challenging its proposals over the distribution of £1.7bn of surplus orphan assets.

The Consumers' Association said last night it would apply to the High Court to force AXA, the French insurance giant, to pay the legal costs of policyholders who are challenging its proposals over the distribution of £1.7bn of surplus orphan assets.

The move by the Consumers' Association, which has undertaken to represent unhappy policyholders in court, followed an inconclusive meeting with AXA to discuss the company footing the bill for the case.

AXA last night said it was "stunned" by the announcement as it had not ruled out paying the court costs for the several hundred policyholders the consumer body said it was likely to represent. AXA, which had planned to reconvene discussions this morning, is now understood to have abandoned the talks. A spokesman for AXA said: "We are totally confused ...we don't see how we can now have a dialogue."

The orphan assets row centres on a disagreement about how AXA plans to pay out its surplus funds to the 713,000 qualifying with-profits policyholders.

AXA had said it would give each policyholder £400, in return for policyholders surrendering any claim on the fund. More than 60 per cent of policyholders have accepted AXA's terms.

The Association alleges the payouts leave 70 per cent of the surplus for shareholders, going against Treasury proposals that any such split should be 90 per cent to policyholders.

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