The Government has sided with campaigners to extend the forthcoming Equitable Life compensation scheme.
Reports suggest the Government, defeated last week in a judicial review brought by customers who lost their pensions as a result of Equitable Life's near collapse in 2004, will widen the compensation scheme.
Initially it refused claims against the insurer based on maladministration and injustice but now appeas to be siding with campaigners, although it remains the case that only the worst cases will ualify for compensation.
"We welcome the court's rejection of the challenge to our decision to establish a scheme to make ex-gratia payments to policy holders who have suffered injustice," said the chief secretary to the Treasury, Liam Byrne.
Equitable Life gave a partial welcome to the minister's announcement, but adding it will continue to appeal MPs "to demand progress towards justice" for policyholders.
"[We fear] that many policyholders may not receive the compensation that they are due if the government continues to rely on 'disproportionate impact' rather than the Parliamentary Ombudsman's more straightforward recommendation of 'relative loss'," the Equitable added.
"Without a clear deadline for delivery, the process is set to drag on indefinitely," warns Chris Wiscarson, chief executive of Equitable Life.
"Our policyholders have been waiting far too long to have this injustice righted - they are entitled to closure," he adds.
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Short-term noise or something sinister?