29/07/2010 - The PO reject's Chadwick outright!

Monday 26 July was a good day for Equitable victims: The PO, Ann Abraham, wrote a stonking put down on the inappropriateness of Chadwick's report to honouring her findings.

You only have to read Annex H of Chadwick's report to see what contempt the 'black letter' lawyer displays in ultra-partisan fashion against the PO's findings. Chadwick completely ignores that the PO's modus operandi is one of dispensing 'natural justice'. She is the independent arbiter for Parliament of whether maladministration warranting compensation has occurred. Chadwick was not independent. He was the partisan hired gun for the Treasury, whose task was to come up with a limited hardship scheme only for findings the Labour government had accepted. It was certainly not his prerogative to re-try the case, as he has.

Read Ann Abraham's letter to all MPs

See Press headlines.

And the full press coverage

And EMAG's press release.

29/07/2010 - The Statement to the Commons

Mark Hoban, Financial Secretary to the Treasury, made his Statement to the House at lunchtime on Thursday 22 July - almost the last day of MPs' term. The Treasury sprung an ambush on us. The Chadwick report, having been mysteriously delayed for seven weeks for no good reason, was published along with ancilliary annexes, running to 2,500 pages. Also a new Commission was announced, to devise a scheme and distribute a sum to be announced by the Coalition on 20 October.

Notwithstanding the deplorable content of his Statement, Hoban did preface it with an unequivocal commitment on the Coalition's behalf to make fair payments to Equitable's policyholders for their relative loss as a consequence of regulatory failure. This is incompatible with his Chadwick-based quantification articulated to the House.

Read Hansard

EMAG will be issuing guidance asap to explain the actuarial alchemy of Chadwick's entirely hypothetical model of a properly regulated Equitable in the 1990s and such salami-slicing terms as 'external relative loss'. It's like a modern movie with marvelous computer generated images of something that has no reality!

Read some of the very many supportive press articles on July 23 – 25

29/07/2010 - Chadwick's actuarial alchemy

The way that Sir John Chadwick manages to trickle down admitted comparative losses of £4.8 billions to a proposed payout of £400 million in compensation is masterful – but incomprehensive. See P 7 (of 10) in actuaries Towers Watsons' quantification of Chadwick's methodology

29/07/2010 - The new Commission's questionable terms of reference

The new three-man commission of Brian Pomeroy, John Howard and John Tattersall only gets to divvy up a sum to be set in the Autumn Spending Review (20 October). Its now proved-to-be toxic terms of reference include:

3. The Commission will have regard to the work undertaken by Sir John Chadwick on the methodology for calculating relative loss and base its allocation to policyholders on the relative loss figures provided to HM Treasury by Towers Watson.
9. In the interests of speed and of the public purse, the Commission should ensure that it does not unnecessarily replicate existing analysis determining relative loss.
10. It will have regard to, but need not be bound by findings on disproportionate impact carried out by Sir John Chadwick.

Reminder - The Coalition's promise is to:

"implement the Parliamentary and Health Ombudsman's recommendation to make fair and transparent payments to Equitable Life policyholders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure."

So, having regard to 'disproportionate impact' is directly contrary to the Coalition's commitment. Read the Commission's TORs.

29/07/2010 - An excellent Equitable debate by MPs

It seems like long ago, but at lunchtime on Tuesday 20 July, immediately after four EMAG directors met Mark Hoban in the Treasury the was a Westminster Hall debate. It was sponsored by the new 31-year-old MP for Abingdon, Nicola Blackwood MP. With extensive briefing from EMAG we think you'll agree, she did wonderfully well. Read her speech in Hansard

09/07/2010 - Ominous silence from minister

EMAG has written two recent letters to minister, Mark Hoban. The one on 25 June was constructive but asked for specific answers to WHAT other building blocks are being considered, asked again for the 'Head A' Calculations. Where answer was there none, a follow up on 5 July asked for written responses to both letters (15 and 25 June) a meeting by 9 July and confidential sight of the Chadwick Report which will be public within one week. No response. What does this mean? It is not the transparency promised.

Read EMAG's constructive letter of 25 June.

09/07/2010 - EMAG's 11th hour lobbying

EMAG asked its members to explain to their MPs why building on Chadwick is not appropriate and why the validation of our true comparative losses should be established, as envisaged by the PO, by the new Commission. At present it looks like the Treasury will be the body that tells us we really lost much less than previously claimed. Well, they would say that...

Read EMAG's letter sent to all MPs on 8 July explaining why 'The Chadwick Process' should be sidelined.

17/06/2010 - "Robust" exchanges with minister Mark Hoban

Four EMAG directors met Mark Hoban, first secretary to the Treasury, on the eve of the Queens Speech. It emerged soon after that it is the government's current intention to publish the Chadwick Report, with unchanged terms of reference set by Labour to minimise payouts, simultaneously in mid-July with a figure for the quantum of compensation and the names on the independent commission. The commission, contrary to the PO’s intentions, is currently NOT to going to be remitted to establish independently the true measure of comparative loss. This just looks like more of the same dirty tricks by the Treasury and EMAG has pointed this out to Mark Hoban in writing and asked him to pull back and reconsider.

Read the exchange, particularly the most recent at the end of the file.

17/06/2010 - Press backing for EMAG

The EMAG board met on 9 June and concluded that we should alert the press and our members to the ambush which we believe the Treasury is plotting.

EMAG circulated a press release.

Read the newspaper coverage.

17/06/2010 - E & Y let off lightly

On 4 June the accountancy profession’s appeal panel announced its findings on the case against E & Y. The result was a derisory fine of £500,000. The only upside to this is that it denies Sir John Chadwick the prerogative to slice his recommendations for the negligence of the auditors. E & Y are now subject to another investigation over its role in Lehman Brothers. No doubt that will end in another whitewash in a couple of years time,too.

Read the highly critical press.

25/08/2010 - Please, write again to your MP

MPs have been lulled into believing that the Treasury's Statement reporting Chadwick's recommendation of circa £500 million compensation, a tenth of what is our due, is reasonable under the circumstances. It is not. Write to express your outrage to your MP – easily done via www.writetothem.com.

ASK your MP to honour their Pledge (if they signed) for FAIR compensation and not Chadwick's derisory sophistry: http://www.emagregional.org.uk/pledgedmps

ASK them to attend the Equitable debate in the Commons on 14 September and speak up for FAIR treatment on your behalf and to base compensation, as the PO proposed, on "relative loss". Seek a compassionate advanced early payment before Christmas to the with-profits annuitants, from at least an immediate £1 billion in cash (tax-free) with the rest of what's due, if the economy necessitates, over the life of the Parliament. WHY should the victims, who've been kept waiting for a decade for compensation be in the front line of draconian cuts?

25/08/2010 - TW's calculation is flawed

On 21 July the Treasury's actuaries, Towers Watson, wrote a letter to financial secretary to the Treasury, Mark Hoban, reporting their estimate of "relative loss" as being between £4 and £4.8 billion.

BUT, the template that they were obliged to quantify was very narrowly defined by Sir John Chadwick. For example, it excluded those PO findings not accepted by the Labour government and it ignored, against the instruction of the Divisional Court (and the Ombudsman), the 18-month period before January 1993 which EMAG estimates would add £750 million to the "relative loss" figure...

EMAG directors Nicolas Bellord and Paul Braithwaite have written a short paper explaining the deficiencies in Towers Watson's instructions, set by Sir John Chadwick, which Towers Watson were obliged to address. Read EMAG's report.

23/08/2010 - EMAG reports

Despite the holidays, EMAG has been very busy analysing all the new propaganda material published by the Treasury. There's a report by EMAG director Alex Henney's de-mystification of the self-important and hugely complex Chadwick report and there are several further studies. EMAG director Nicolas Bellord's has written a paper on the defects in the template imposed on actuaries Towers Watson and a 35-page detailed analysis of the Chadwick report.

EMAG has commissioned insurance expert senior Counsel, Anthony Boswood QC of Fountain Court whose preliminary views include:

"To the extent that 'absolute loss' can be equated with a proven, accrued loss such as in the example given above, and Sir John's reasoning involves applying a discount to absolute loss, his advice is logically indefensible and could not result in fair compensation to policyholders."

These items will NOT be published here at this time but will be made available to EMAG members, who have underwritten the work. There's also a template letter draft of what members might write to their MPs. Links to these will be provided in EMAG's next newsletter to members.

29/07/2010 - Timetable

Mark Hoban has suggested people make representations to him about his Statement through the summer. That would probably be about as effective as when Vanni Treves called for representations to his draft CONpromise scheme in October 2001 – when the scheme changed not one iota despite 24,000 written representations.

EMAG suggests that more positively you write, please during August, a polite but forthright letter directly to David Cameron and/or Nick Clegg, with copies to your own MP, your local EMAG regional team and Mark Hoban. We want the Coalition's leadership to realise the depth of anger at being offered one tenth of the now confirmed relative losses of £4.8 billions. Realise that 380 MPs have signed EMAG's Pledge to honour the PO recommendations and make FAIR compensation payments. Until proved otherwise, we should accept those pledges were made in good faith. Remember that 230 of our MPs are brand new.

The list of MPs who signed the Pledge is at: http://www.emagregional.org.uk/pledgedmps

There will be a very important Equitable Life debate in the Commons on Tuesday 14th September. So MPs have to be made aware that we are not going to accept Chadwick's deplorable methodology before then. That will be a pivotal day. The Tory Conference in Birmingham between October 3trd and 6th will be a time for final political pressure and EMAG will be there.

The 'drop dead' date is 20th October when the quantum allocated to compensation will be announced. Please, play a part personally in ensuring that the sum is much much more than Chadwick's shabby proposal of just £500 million. Make contact through EMAG regional to find out how you can help: http://www.emagregional.org.uk/

29/07/2010 - EMAG asked Mark Hoban...

"...The Ombudsman's forthright and unequivocal dismissal of the Chadwick Report makes it crystal clear that the Coalition's commitment to implementing the Ombudsman's recommendation should not be based on Sir John's work.  As a building block in your consideration of how to compensate the victims of the Equitable Life scandal we suggest that Chadwick's report is now a dead duck.  Dumping the Chadwick Report will necessitate redrafting the questionable Terms of Reference of the Commission that you have established..."

29/07/2010 - EMAG wrote to ALL MPs

In the immediate aftermath of the PO's devastating letter to MPs, EMAG followed up to all MPs on their last day in Westminster (27 July), including:

"EMAG will continue to campaign for fair compensation in the run up to the spending review.  It is essential that MPs stand up both for their constituents and for the office of the Ombudsman and discard the Chadwick report to ensure the new coalition government delivers on its promise to implement the Ombudsman's recommendations. You will no doubt be hearing more from your constituency's Equitable victims over the coming weeks.  They are understandably upset."

Read the whole letter.

13/07/2010 - Hoban is misleading on Chadwick

In the Commons on 12 July Mark Hoban provided this reply:

Mr Hoban:

"Later this month, the Government will provide a detailed update on the steps towards implementing an independently designed payments scheme. This will be alongside Sir John Chadwick's report on relative losses suffered by Equitable Life policyholders as a consequence of the findings of maladministration and injustice made by the PO."

But Sir John Chadwick's unchanged terms of reference do not require him to address 'relative loss arising from the PO's findings.' He isn't even addressing ALL the findings – only those accepted by the Labour government and as required to be amended by EMAG's successful JR. Chadwick's remit is to address five explicit questions such as 'disproportionate impact' (means testing under another name) and possible slicing of payments for the contributory negligence of accountants, actuaries, the society and even the members – issues not even within the PO's remit.

This is not the first such misinformation. On 26th June, Mark Hoban gave a written answer to Phil Woolas MP:

"Sir John Chadwick is advising the Treasury on the relative losses suffered by Equitable Life policyholders in relation to those accepted cases of maladministration resulting in injustice."

To better understand the mismatch between the PO findings and 'The Chadwick Process' read Nic Bellord and Paul Braithwaite's detail evaluation.

17/06/2010 - EMAG wrote to all MPs who pledged

Given EMAG’s concerns, we intend to re-start the all-party group of MPs. We wrote to all 380 MPs who signed EMAG’s Pledge to bring them up to date.

04/06/2010 - EMAG membership rockets to 37,000

In April EMAG mailed 350,000 Equitable Life members from the year 2000 register to ask them to lobby their MPs and to join EMAG at this 11th hour. We were victims of our own success: More than 15,000 new EMAG members were recruited, causing our small organisation a massive headache in registering and banking. This means that more than 37,000 Equitable Life members have paid subscriptions to EMAG and we've never been bigger or stronger.

04/06/2010 - Equitable Life AGM 10 May

This was the Equitable Life's first AGM under the stewardship of Chris Wiscarson and Ian Brimcome and notable for the change in atmosphere. There's a new focus on value and reducing overheads. Charles Thomson's exit package was the subject of harsh words, but it had been approved by the now departed remuneration committee chair, Jean Woods. The new duo in control went out of their way to be supportive of EMAG and to stress the shared objective of fair compensation. The two boards are working co-operatively for the first time in nine years. EMAG director Colin Slater was invited to speak and he was warmly applauded. This rapprochement is welcomed.

04/06/2010 - Paul Braithwaite celebrates

Local paper Camden New Journal in London reported Paul Braithwaite's pleasure (27 May) at the result of his ten years' fight for compensation being included in the Queen's Speech.
http://www.camdennewjournal.com/news/2010/may/victory-equitable-life-battle

04/06/2010 - Tom Lake has resigned from EMAG's board

The board of EMAG has reluctantly accepted Tom Lake's resignation. Tom was one of the founders of EMAG in August 2000 and he has served as secretary and chairman in past years. The board expresses its gratitude to Tom for almost a decade of selfless service. Perhaps his greatest contributions have been as one of the two personal petitioners to the European Parliament, which resulted in a thorough Committee of Enquiry and report (EQUI). Also he was a consistent bridgehead to Labour MPs with helpful insight into the Labour Government.

23/03/2010 - Ernst & Young in the Private Eye

Private Eye 19 March (P 32) reveals the depravity of Equitable’s old auditors E & Y and describes the practice’s behaviour in sanitising Lehman Brother’s dodgy over-streeched debt. At some length it also alludes to the Joint Disciplinary Scheme (JDS) accountant investigation about Equitable now awaiting the Appeal verdict announcement. This is imminent and will not help Equitable sufferers in two painful ways. First, however big the fine, the levy goes into the coffers of the accounting profession’s body. Secondly, any finding against these auditors will be seized upon by Sir John Chadwick as an excuse to formally salami-slice down his proposed Equitable payment scheme. You could call that lose lose.

16/03/2010 - EMAG concludes 'The Chadwick Process' is a sham

EMAG took several days to read, analyse and reflect on the 109-page convoluted Third Interim Report from Sir John Chadwick. But the reluctant conclusion of the directors at the EMAG board meeting 9 March was that he has now revealed his true colours as a front for the Treasury. There is no evidence that EMAG or other policyholders’ submissions have had an iota of influence on what is looking like a shabby Treasury stitch up.

EMAG has decided to make no further contributions as they could have implied as an endorsement. It was clear that EMAG’s very extensive and constructive submissions, made in good faith, were being disregarded as a matter of course as 'The Chadwick Process' progresses towards the Treasury’s desired outcome. We conclude that it was no coincidence that Sir John wascarefully chosen for this poison chalice.

Read EMAG’s letter to Sir John

Read EMAG’s Press Release

And the BBC’s coverage

Even The New Statesman!

10/03/2010 - Dr Tony Wright's legacy

On 4 March backbench MPs showed their teeth and defied front bench attempts at damage limitation by Harriet Harman and Sir George Young. Two enormous changes were voted through. First, the chairs of select committees will be voted for by secret ballot instead of indulged by the PM to favourites as safe-pair-of-hands (like the pathetic John McFall). Second, the Commons programme will be determined by a business committee of front and backbenchers. This is what Dr Wright’s own PASC committee had recommended. It is a terrific legacy for Dr Wright, who is standing down due to ill health. All EMAG sufferers owe him a debt of gratitude for his committee’s repeated PO investigations and support for Ann Abraham’s office. EMAG’s Paul Braithwaite wrote an immediate note of congratulations to him.

Read more in the Guardian here...