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More than 100 GPs are on course for a 'David and Gol-iath' style legal battle with Norwich Union.

Solicitors for the GPs say they are close to bringing a case against the financial services giant after it refused to back down over punitive pen-alties on practice loans.

GPs have complained they are locked into loans taken out more than a decade ago with Norwich Union's subsidiary, the General Practice Finance Corporation (GPFC), because of big redemption penalties.

They want to get out of the loans because their endowment schemes will not cover the full cost.

Satish Jakhu, a solicitor with law firm Rubric Legal, acting for 113 GPs, said Norwich Union had refused to compromise at a recent meeting and promised to fight any action. He said he was now waiting to see how GPs responded before pressing ahead.

'It was almost a David and Goliath situation ­ but together we can do something,' he said.

Mr Jakhu added that if more GPs joined the action

it would help spread costs


Around 4,700 GPs have loans from the GPFC. 'I'm confident we will succeed and they can get their costs back,' Mr Jakhu said.

A GPFC spokesman said its position was clear and unchanged.

'We would be defending our legal position,' he said.

The spokesman admitted that interest rates on loans taken out in the late 1980s and early 1990s were not as favourable as those available now, but added 'they were competitive at the time'.

He added that GPs could borrow extra money at current interest rates to cover endowment shortfalls.

Roger Street, a financial adviser who co-ordinated a fighting fund to kick-start the action in 2002, said the costs of fighting the case were small compared with the redemption penalties.

GPs can contact Rubric

Legal at:

What GPs are saying about their GPFC loans

'It's aggravating and it's very unfair'

Dr Rachel Sykes,

Bexley, Kent

'We'd be foolish to pay it off early'

Dr Ronnie Simpson,


'The ethos behind the GPFC was to help to develop primary care ­ it's now doing the opposite'

Dr Gordon MacGregor,

Bishop Auckland, County Durham

'It's the little man against the big boy'

Dr Jonathan Mair,


'This penalty has crippled me'

Harmander Wasu,

practice manager, Middlesex

By Rob Finch

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