The mis-selling scandal takes a fresh twist as Class Law steps up the fight for compensation

The saga of Equitable Life - the giant insurer including many solicitors as investors, which closed to new business in 2000 because of its exposure to guaranteed annuity policies - continues to march on.

Law firms Class Law and Irwin Mitchell were criticised in the press earlier this year, after negotiations lasting more than a year on behalf of former Equitable Life members, secured exactly the same offer of compensation as that offered by the insurer to all other former policyholders with similar claims for mis-selling.

Each claim will be individually assessed in a review process and if a valid claim is accepted, the calculation will use the same formula for each individual case.

An Irwin Mitchell spokesman says no deal was offered to Equitable members until the firm started working on the scheme.

Senior partner Michael Napier adds: 'Far from being critical, our clients responded very positively to the cash-in-hand deal we negotiated.

We offered the only effective voice this group had in the long and tough negotiations and Equitable Life then applied the same settlement formula to all other non-guaranteed annuity return policyholders.'

Class Law partner Stephen Alexander admits the offer was no different from that made by the Equitable board to all other former Equitable members who bought policies between July 1993 and August 2000.

However, Mr Alexander is not throwing in the towel yet and is preparing to take the fight to Europe.

He says: 'We are about to launch a complaint in Europe about the way the government has handled the situation.' He refuses to elaborate further.

Meanwhile, Equitable is expected to face a fresh barrage of compensation claims after writing to a new group of members who were previously excluded from receiving financial redress over mis-selling allegations.

The life assurer has offered 3,000 members, who were sold policies between 1993 and 1998 and have lodged mis-selling complaints with the Financial Services Ombudsman, a compensation package worth 2.5% of a policyholder's investment in exchange for giving up the right to sue the company over the mis-selling claims.

Previously, only those sold policies after 1998 had received payments for being mis-sold insurance products.

Up to 80,000 members who were sold their policies between 1993 and 1998 could now be entitled to make a claim.

Last month the mutual insurer's new management was given leave to pursue its 3.3 billion claim for negligence and breach of duty against nine former non-executive and a further six former executive directors.