THREE of the former Equitable Life directors being sued by the society for up to £1.7 billion have sold or transferred houses and property to their wives.

According to lawyers, the move could frustrate attempts by Equitable Life to recover damages if it wins its case against 15 former directors who it alleges acted negligently and breached their “fiduciary duty”.

The society is also suing its former auditor, Ernst & Young, for £2 billion.

The court case, which started last week, follows the near-collapse of the society, which faced huge potential liabilities to holders of guaranteed pensions in the late 1990s.

The society has been criticised for pursuing the case against the former directors, with claims that it will struggle to even recoup the costs of bringing it. A number of the former directors are understood to have used the proceeds of the property sales to pay mounting legal fees.

Equitable Life began its action against the former directors in December 2001.

Alan Tritton, a former director of Barclays who chaired the society’s audit committee, sold Lyons Hall in Chelmsford, Essex, to his wife in November 2001 for £1m.

Records at the Land Registry reveal that ownership of Roger Bowley’s home in Hertfordshire was also transferred to his wife in July 2001.

Bowley, a former Equitable director, has lived at the home with his wife for 21 years.

John Sclater, the former chairman of Foreign & Colonial Investment Trust, sold part of his Sutton Hall estate and a cottage to his wife in August 2002.

All three directors refused to comment, referring inquiries to their lawyers.

Equitable Life was forced to close to new business in 2000 after the House of Lords ruled that its strategy of cutting policy bonuses to holders of guaranteed pensions was unlawful, opening a £1.5 billion hole in its finances.

All 15 former directors insist that they acted properly.

Lawyers for the directors argue that the worst they can be accused of is making a mistake.

Additonal reporting by Dan Box and Dan Drillsma-Milgrom

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