Equitable Life will pore over criticisms of City regulators and government departments in today's long-awaited report from Lord Penrose into the life insurer's near-collapse, to establish whether there are grounds to seek compensation for policyholders through the courts.
Lord Penrose is expected to devote much of his 818-page report to the serious shortcomings in the "light touch" regulation of Equitable carried out by the Treasury and the Department of Trade and Industry in the late 1980s and 1990s.
The Scottish judge is also expected to be damning about former directors of the society, and will probably criticise the Financial Services Authority, which took over insurance regulation in 1999.
In what could be the most significant part of Lord Penrose's analysis, he is expected to examine whether the regulatory failure in the 1980s and 1990s was due to negligence or because the framework was flawed.
Equitable's nearly one million policyholders hope the report, which stretches back to the 1950s, will prompt the Government to hand out compensation. If the Treasury does not offer compensation - and speculation was mounting at the weekend that it will not - policyholders hope Lord Penrose will provide the ammunition for a lawsuit against the Government.
The society's decision on this will rest on the exact nature of the regulatory failure - regulators are protected from being sued for incompetence but can be pursued over "misfeasance", which requires proof of people knowingly breaking the law.
However, many believe policyholders' best hope of extracting compensation from the Government is by getting the parliamentary ombudsman, Ann Abraham, to reopen her investigation into Equitable.
Some 40 individuals have been invited to the Treasury for a private "lock-in" reading of the report before its publication this afternoon. Just over 20 are former directors and managers of Equitable. Several others are officials who regulated Equitable.
Once one of the most respected financial institutions in the UK, Equitable was taken to the brink of collapse by a ruling by the House of Lords in July 2000 which forced it to honour £1.5bn in payments to holders of guaranteed annuity policies.Reuse content