The first legal action against the insurer Scottish Widows, facing allegations of negligence over advice given to up to 100 pension schemes between 1999 and 2000, has been filed in the Scottish courts by WTL International, a Macclesfield-based engineering firm.
The group is being advised by the Actuarial Review Company (ARC), which is believed to be in discussions with another 24 pension funds over possible claims against Scottish Widows, owned by Lloyds TSB. ARC has alleged that as many as 100 pension schemes may have lost up to £300m because of poor advice on investment switching.
Scottish Widows is alleged to have encouraged pension schemes to give up guarantees that protected them from the risk of their members living longer than expected. ARC has estimated that successful legal challenges by all 100 schemes could cost the insurer as much as £1bn.
Scottish Widows has already written to its pension fund clients to refute ARC's claims.