exercise their rights. According to actuary Christopher Headdon, policies issued from 1975 to 1988 were worth approximately 25% more than CARs; the total difference amounted to some £1 billion to £1.5 billion. Based on an affidavit sworn by Christopher Headdon on 28 June 1999, "from the 1980s onwards, Equitable was aware of the GAR risk. ... At no time did Equitable ever hedge or reinsure adequately against the GAR risk to counteract it. The reason for this was Equitable's belief that it could ... neutralise the potential effect of the GAR risk through the exercise of its discretion to allocate final bonuses under Article 65" (of the Articles of Association). In 1994, Equitable exercised its discretion under that Article to reduce the terminal bonus of those policies with Guaranteed Annuity Rates, negating the benefit from the guarantee but preserving the assets of non-GAR policyholders. By July 1998 there were a number of complaints to the Personal Investment Authority ombudsman and it was decided to seek a declaratory judgement. David Hyman was selected as the representative policyholder. Hearings started in July 1999, and in September the High Court ruled in the Equitable's favour; but this was reversed by the Appeal Court in January 2000. The Equitable now sought a ruling by the House of Lords. House of Lords ruling on the Hyman case On 20 July 2000 the House of Lords upheld the Appeal Court ruling. They concluded that GAR policies required that the guaranteed rate was applied to calculate the contractual annuity; and that the effect of the differential terminal bonus rates was that the annuity was calculated at current annuity rates, not at the guaranteed rate, and was not lawful. "The self-evident commercial object of the inclusion of guaranteed rates in the policy is to protect the policyholder against a fall in market annuity rates ... The supposition of the parties must be presumed to have been that the directors would not exercise their discretion [in Article 65] in conflict with contractual rights." Even before that stage, Equitable, which had long claimed to be more transparent than its rivals, had assets worth £3 billion less than communications with policyholders had indicated. Aftermath of the Hyman case and partial sales, 2001–9 Having not insured against losing the case, and with no other way to make provision for the immediate £1.5 billion increase in long-term liabilities, Equitable put itself up for