Troubled life assurance company Equitable Life has revealed that it is to put a temporary halt to legal proceedings against former directors of the company as it pursues an alternative settlement.
The decision to freeze its GBP1.7 billion negligence lawsuit against its former leadership comes just a week after Equitable threw in the towel in its bid to sue former auditors Ernst & Young for GBP2 billion.
The life insurance outfit is believed to be considering negotiating a deal with its former directors that will see the legal action dropped if each side agrees to pay their own fees accumulated to this point.
The move comes after Equitable was left with the burden of paying a massive legal bill following the collapse of its case against its auditors. The failed action is believed to have cost Equitable GBP30 million.
However, the chances of a deal with directors being struck are slim as a number of directors appear keen to get their legal fees paid by Equitable because they are employing representatives on contingent fee arrangements.
The assurer said that its action against 15 former directors, which it alleges were culpable in the company’s damaging mismanagement, will be delayed until at least October 10.