Aviva policyholders can expect payouts of between £200 and £1,200 as a High Court approves the reattribution deal.

In a landmark ruling, a High Court hearing has approved plans for Aviva – formerly Norwich Union – to re-attribute an estimated £500 million of its inherited estate to 1 million savers.

The deal, expected to be concluded as scheduled on 1 October, will result in payouts to around 90% of shareholders of between £200 and £1,200, which, for the vast majority, will be paid before the end of 2009. The remaining 10% will receive larger payouts.

The proposed re-attribution deal was announced in July 2008 for investors in two of Norwich Union’s oldest funds – CGNU Life and CULAC with-profits funds. Under the “re-attribution” process, policyholders have been asked to accept money to relinquish any future claim to the surplus cash in the funds.

At the time of the original announcement, Policyholder Advocate, Claire Spottiswoode, an independent expert appointed to represent policyholder interests commented: “This has been a long and difficult process. I have challenged many aspects of the rules of the with-profits industry to try to ensure that policyholders receive the best deal possible.

“This deal is good in all respects. It also provides a fair return to all shareholders.”

However, after last week’s announcement, Which? Policy Advisor, Dominic Lindley, said that policyholders are being short changed: “Weak FSA regulation and a lack of legal protection has lost policyholders millions of pounds.”

Mark Hodges, Aviva UK Life Chief Executive, said: “Today’s (18 September) decision by the High Court is an important step towards completing the reattribution. We believe the offer represents good value for 99% of our customers and the High Court’s approval brings individuals closer to receiving their tax-free payments.”

The period for policyholders to register their votes was extended from 21 August to 21 September to allow those who had yet to vote, do so.