Nov. 4 (Bloomberg) -- The Court of Appeal for Ontario, the province’s highest court, reduced the amount Great-West Lifeco Inc. must pay to former London Life Insurance Co. policyholders for illegally using money from their accounts to finance a 1997 takeover.
The appeal court cut the award given by a trial judge to C$220 million ($218 million), subject to some adjustments, from C$390 million. The court upheld the trial judge’s decision that the acquisition of London Life by Great-West failed to comply with Generally Accepted Accounting Principles and the Insurance Companies Act.
Harrison Pensa LLP and Bates Barristers, the lawyers representing the policyholders, said yesterday in a statement that they “are gratified by the decision.” They said they “look forward to resuming the prosecution of all remaining matters to a conclusion before the trial judge.”
Two former London Life actuaries and a Great-West policyholder sued on behalf of 1.8 million people, accusing the companies of illegally using their money to help pay for the C$2.9 billion acquisition. They sought as much as C$1 billion in damages, including repayment of their money with interest and penalties.
Testimony during a three-month trial that ended in January 2010, in London, Ontario, showed the companies used C$220 million of the policyholders’ funds to help Great-West make the acquisition.
“The defendants have done indirectly what was prohibited from being done directly” by transferring money from the account holders’ accounts, Ontario Superior Court Judge Johanne Morissette said in her October 2010 ruling.
The case is Between James Jeffery and London Life Insurance Co., SC46300, Ontario Superior Court of Justice (London, Ontario).
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