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Sir John Chadwick's Advice is made public

Sir John Chadwick issued his Advice to Government on 16 July 2010, and today (22 July 2010) Government has published that Advice and the material appended to it.

The Foreword to Sir John's Advice is reproduced below.

"Foreword

In January 2009 I was appointed to provide advice to the Government in relation to its proposal to establish a fair ex gratia payment scheme in response to the Report of the Parliamentary Ombudsman on her investigation into the prudential regulation of Equitable Life. I am now in a position to provide Advice in accordance with my Revised Terms of Reference. I append to this Advice, advice which I have received from my actuarial advisors, Towers Watson.

My work has been informed by the correspondence I have received from interested parties, including those who represent particular groups and those individuals who are or were Equitable Life policyholders. I append the relevant correspondence to this Advice.

I am most grateful for the assistance provided to me in my work by Laurence Emmett and Simon Bor in my Office; by Gavin Palmer, Hannah Robbie and Gareth Sutcliffe and Kathleen Jervis from Towers Watson; and by Gavin Hill, Peter Shelley and Michael Urmston who provided independent peer review to Towers Watson (and whose report is appended to Towers Watson's advice to me). This advice could not have been delivered without their assistance; but the views which are expressed are mine.

In coming to the views which I express in this Advice, I have borne in mind the need for any payment scheme to be fair - as between previous and current Equitable Life policyholders, as between different classes of policyholders, and as between policyholders and taxpayers generally - and to be simple. There is a need also for a scheme which can be delivered expeditiously. In developing a payment scheme to meet losses which have arisen as a result of matters which occurred many years ago, and in the context of a highly sophisticated and technically complex industry, there is bound to be an inherent tension between fairness, simplicity and expedition. But the payments to be made under a scheme are likely to be large; and, where that tension cannot be resolved readily, I have thought it right in this Advice to give precedence to fairness and expedition. But, I recognise that the decision as to how these competing priorities should influence the design of the payment scheme, in particular with regard to the public purse, is not a matter for me.

 

The Right Honourable Sir John Chadwick"