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Land & Ors, R (on the application of) v Executive Counsel of the Joint Disciplinary Scheme, Court of Appeal - Administrative Court, October 15, 2002, [2002] EWHC 2086 (Admin)



Draft 21 May 2003 12:16 Page 1
CO/3526/2002
Neutral Citation no.: [2002] EWHC 2086 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand,
London, WC2A 2LL

Tuesday 15 October 2002
Before:

THE HONOURABLE MR JUSTICE STANLEY BURNTON

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THE QUEEN on the application of


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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
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Mark Hapgood QC, Tim Dutton QC and Mark Simpson
(instructed by Barlow Lyde & Gilbert) for the Claimants
The Hon Michael Beloff QC, Jonathan Evans and Edward Sawyer
(instructed by Stephenson Harwood) for the Defendant

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Judgment
As Approved by the Court

Crown Copyright ©



Mr Justice Stanley Burnton:
Introduction
1. In these proceedings the Claimants, the partners of the well-known firm of accountants Ernst & Young (``E&Y''), seek an order staying the investigation by the Executive Counsel of the Accountants' Joint Disciplinary Scheme (``JDS'') into their work as auditors of the Equitable Life Assurance Society and its subsidiary undertakings until after the conclusion of the civil proceedings instituted by Equitable Life against them, on the ground that the continuation of that investigation gives rise to a real risk of serious prejudice to them. The prejudice alleged by E&Y is prejudice in that litigation, in the JDS investigation itself and any subsequent Disciplinary Tribunal proceedings, and to the private and professional lives of the partners and personnel who were involved in the audits and regulatory work of the firm for Equitable Life. E&Y contend that this prejudice outweighs the public interest in the present continuation of the investigation.
Background: (a) Equitable Life
2. The situation of Equitable Life and the losses incurred by its policyholders were consequences of the decision of the House of Lords in Equitable Life Assurance Society v Hyman [2002] 1 AC 408, given on 20 July 2000. The House of Lords decided not only that the directors of the Society were not entitled to declare a reduced final bonus to holders of pension policies who chose to exercise their guaranteed annuity options as against those who chose not to do so, but also that the directors could not lawfully declare different final bonuses to holders of policies containing such an option as compared with holders of policies which did not include a guaranteed annuity option. It was the second of these decisions, which according to the evidence before me had not been anticipated by the leading counsel advising the Society, and was the more controversial, that led to the financial difficulties of the Society, to its decision in December 2000 to close its doors to new business, to the sale of many of its realisable assets, and to the substantial reduction in the sums paid and payable by it to its policyholders. 3. Endowment ...
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