Equitable Life has dropped two further legal claims against former directors who it had claimed were responsible for its near collapse in 2000. The troubled insurer has agreed settlements with Roger Bowley, its former marketing director, and David Wilson, a former non-executive director.
Mr Bowley and Mr Wilson, the chairman of the housebuilder Wilson Bowden, have agreed to pay their own legal costs in return for Equitable dropping its negligence claims against them.
Equitable had sought £1.7bn in damages from 15 former directors who it alleged had failed to protect the company from a legal dispute over pension benefits that ultimately cost policyholders £1.5bn.
Yesterday's settlement deals mark the latest embarrassing setback in Equitable's attempt to recoup policyholders' losses through a series of legal actions. Last month, it was forced to drop a £700m claim against its former auditor Ernst & Young after legal advice that it was unlikely to win the action.
Both sides agreed to pay their own legal costs and Equitable is subsequently understood to have offered the same deal to all 15 of its former directors. Two of the cases were settled last week, but despite yesterday's latest deals, Equitable has claims outstanding against 11 former board members.
Although Equitable is keen to bring an end to the action, at least seven former directors are understood be reluctant to settle on the same terms because they are represented by lawyers working on a no-win, no-fee basis.
In addition, several directors are so confident that the insurer's case is doomed they may be prepared to fight on to recoup their costs. The legal fees of the 15 directors are thought to total £20m.
Last night, Mr Wilson said: "This case has taken out four years of my life - it's a shame that the Society and their lawyers didn't see the writing on the wall but we have been forced to fight on and I am glad I have prevailed."
Mr Bowley's solicitor, Gavin Foggo of Fox Williams, also attacked Equitable's decision to launch the action. "This action should never have been brought against Mr Bowley," he said. "The claim against him was hopeless because he acted entirely reasonably. And even if Equitable Life had been able to obtain a judgment against him, it knew he would never have been able to pay."
A spokesman for Equitable said the insurer could not comment while further legal action was pending.Reuse content