Standard Life Assurance Ltd v Ace European Ltd &
Ors [2012]1
Commercial Court 1 February 2012
This dispute arose under a professional indemnity policy issued
by the Defendant insurers to the Claimant, Standard Life
("SLAL"). The claim concerned the operation of one of
SLAL's pension funds, which had been marketed as a temporary
home for short term investment, and described as being invested in
cash, though by 2007 the fund's assets included a substantial
proportion of asset backed securities. Following the failure of
Lehman Brothers in September 2008, trades in the underlying
securities came to a halt, rendering the fund illiquid and
increasingly difficult to value.
In January 2009, SLAL took the decision to switch to a different
valuation model, resulting in a one-off one-day fall in value of
units in the fund of around 4.8%. This generated a mass of
complaints and claims from customers, and severe pressure from the
Financial Services Authority.
