Herbert Smith to put Denton Wilde Sapte under scrutiny over embattled EquitableNEGLIGENCE INQUIRY: Top City litigators to investigate whether advisers fallibleCity firm Denton Wilde Sapte will be among firms under the spotlight of City litigation practice Herbert Smith in an investigation ordered by troubled mutual house Equitable Life.Last December, the Equitable Britains oldest mutual society closed to further investments following the discovery of a 1.5 billion shortfall in its accounts.

This was caused by a House of Lords ruling last year, compelling Equitable to honour fixed guarantee annuity rates offered to customers during the 1980s, but unsustainable when interest rates fell in the 1990s.The Equitables board of directors stepped down earlier this year, and Vanni Treves former managing partner of City firm Macfarlanes became chairman last month.

The new board has ordered an inquiry to check for any evidence of negligence on the part of any of the mutuals advisers and regulators, in a bid to assess whether there are any legal routes for policy holders to be recoup their losses.A spokesman for Denton Wilde Sapte, which worked on the House of Lords case, said the firm was continuing to act for the Equitable, and that it is quite usual for all advisers to be reviewed in this way.

But a spokesman for Herbert Smith said: We were appointed by the Equitable last week to investigate whether advisers have been fallible.The team at Herbert Smith has yet to be confirmed, but the investigation will focus on former Equitable directors, advisers such as Big Five accountants Ernst & Young and Denton Wilde Sapte, and the regulator, the Financial Services Authority.Alistair Dunbar, head of public relations with the Equitable, said that Herbert Smith had been retained as an independent, to investigate without fear or favour into the Equitables advisers.

He said the firms remit was wide: No ones been ruled out [from investigation].

If theres a realistic chance of redress well pursue it.A survey last month suggested that as many of as 40% of lawyers have pensions savings with the Equitable (see [2001] Gazette, 8 March, 5).Jeremy Fleming