The UK government's Treasury commissioned Lord Penrose to lead an inquiry into Equitable Life, which took two and a half years to complete. His 818-page report, published on 8 March 2004, found that the company had made over-generous payouts to policyholders and was therefore the "author of its own misfortunes".
In the light of Penrose's findings, in April 2005, Equitable Life launched a £4 billion legal action in the High Court, claiming £2 billion from 15 ex-directors who it claimed were negligent in their duties, a charge they deny. It also demanded a similar sum from its former auditors, Ernst & Young, claiming that they signed off the company's accounts without warning of the problems that led to its collapse. However, Ernst & Young said they could not have told the society anything it did not already know.
On 17 July 2008, the Parliamentary and Health Service Ombudsman issued her report "Equitable Life: a decade of regulatory failure after a four year investigation. She made two recommendations to the Government: that they issue an apology, and that they set up a compensation scheme.