Max-Hervé George is a cheerful, friendly young man. He looks like a graduate business student or a trainee lawyer.
He would be many a mother’s idea of a perfect son-in-law, except that he has no time for marriage or children. “I work all day to earn money to keep up my legal struggle. Then I spend every night until 10 or 11 on the phone keeping up my claim and fighting my case,” he said.
“I don’t have time for a family. In any event, what young woman would put up with a life like that?”
George, a Frenchman who lives in Switzerland, does not immediately strike you as a financial terrorist or a man who might be a billionaire by the end of the decade. And yet he is fighting – and winning, according to the French courts – a merciless legal war against Aviva, the British-based insurance giant.
Although Aviva refuses to accept his claim, or even to talk to him, young George could end up destroying, or owning, the company which runs the pension funds of hundreds of thousands of people in Britain, France and other countries.
At least 30 others – and maybe many more – are said to have a similar claim on Aviva France which might ultimately have to be settled by its British parent company.
“The figures involved are astronomical,” said George’s French lawyer, Nicolas Lecoq-Vallon. “Aviva is in institutional denial and behaving in an utterly irresponsible way. By failing to show these potential losses on its books, it is also neglecting its duty to its shareholders and policyholders.”
George, 25, is not a rogue trader. He is not a financial genius. He is just a man who has the life-long right to make investments with Aviva France that are guaranteed to succeed – to Aviva’s cost.
Guaranteed? Yes, because George has the right to invest in upwards movements in the markets after they have happened. Imagine being allowed to fill in a winning ticket for the Euromillions lottery after the draw has been made. Max-Hervé George, in effect, has that right.
He holds a “known price” life insurance contract, obtained for him by his father when he was seven years old from a French company which eventually became part of Aviva. This contract, an investment vehicle rather than a classic life insurance policy, allows him to switch his funds to profit from weekly upward movements in markets.
“For example,” he said, “the Asian markets went up 5 per cent recently. After the event, I was able to instruct Aviva to move my money into Asia at the prices which applied before the markets rose.”
And did Aviva comply? That’s where the legal battle, and confusion, begins.
George and his family have won 30 legal judgments against Aviva France in the past 15 years. Last September, the highest French appeal court, the Cour de Cassation, ruled in the George family’s favour. The contracts (which are no longer being written) may be stupid, the court decided, but they are legally binding under French law.
Asked to comment by The Independent, an Aviva spokeswoman in London said the company had nothing to say on the record at this stage. It is understood, however, that insurance giant may now be prepared to acknowledge that it has no more legal recourse in France and must therefore obey the French court rulings.
That, however, is not the end of the matter.
Aviva has been ordered to credit George’s investment account with €1.4m (£1m) – and his family with a total of €9.6m – to cover the potential increased value of their funds between 1997 and 2007. Since the seven-years-old George’s contract was originally worth F50,000 or €8,000 in 1997, this amounts to an annual growth rate of 68.6 per cent a year.
If George’s fund continues to accumulate wealth at the same compound rate until 2020, he would be worth €1.2bn. By 2030, Aviva would owe him €230bn – more than the value of Aviva.
And that is just George. His mother, brother and sister hold similar contracts. His father and grandmother made settlements with Aviva some years ago which, he says, he is forbidden for legal reasons to discuss.
His lawyer, Lecoq Vallon – a specialist in financial claims – says that he has “around 30 other clients” who also have “known price” contracts written by the insurance company, Abeille Vie, which was swallowed up, ultimately, by Aviva. “There are new ones coming out of the woodwork all the time,” he said.
Other French insurance companies wrote similarly bizarre contracts. Why such bizarre deals should have been offered is unclear. They were always a risk. They became calamitous once the digitalised world made it simpler for clients to follow market movements.
Other companies have paid large sums to buy out the time-bomb contracts. Aviva France has mostly refused to do so. George has therefore made no money – so far – from his magic contract. In fact, he says, it costs him a great deal of money to pursue his claim.
“Every week I deposit a dossier with Aviva in which I tell them how I want them to re-invest my money. To make sure they can’t say they have never received my instructions, I fly from Geneva to Paris to lodge them myself or I employ a court bailiff to do so. That cost me an average of €1,000 a week. Apart from that, there are legal and other costs.”
George says he therefore has to “work very hard” to earn enough money to assert his right to become, one day, a very wealthy man. He is a partner in a hotel project and another real estate investment in Switzerland.
Swiss banks have decided, after examining his Aviva claim, that George, at 25, is an excellent credit risk. They have even lent him – and this is where the story becomes even more bizarre – just under €20m to add to the value of his Aviva contract.
The original document allows George to top up his fund whenever he wants. He can then bet that money on “known winners” too. This makes the €1.2bn figure for his potential worth in five years’ time a gross understatement.
Although he declines to admit it in so many words, this ratcheting up of the claim is part of a war of nerves – a multi-billion euro game of chicken – which George is waging against Aviva. So was his decision to buy shares in both Aviva and the company’s likely new acquisition, Friends’ Life.
He appeared like the ghost of Christmas Future (Christmas for him, that is) at the AGMs of both companies in London last month. Neither company was amused.
In off-the-record comments to the French press, Aviva officials have accused George and his family of acting aggressively and like “speculators” or predators, rather than a normal life insurance contract holders. This, in essence, has been the basis of their case in the French courts – a case which has been rejected over and over again.
Does Aviva not have a point, we asked George. He may be legally in the right. Does he not put himself morally in the wrong by placing hundreds of thousands’ of other people’s pensions as risk?
“Look,” he said. “The first point is that Aviva has never approached me with any kind of offer. Never. It is they who have refused to face up to their legal and financial responsibilities .”
So if Aviva made a reasonable offer – say the €150m that he now reckons his original investment to be worth – would he be ready to renounce his contract?
“Aviva’s big problem is that I am 25 years old,” he said. “I have another 50 years of life expectancy and another 50 years in which I could benefit from my contract. That is the problem that Aviva has with me.”
The war goes on.