Irish companies are likely to be paying very close attention to a trial scheduled to start in Britain next April, which is expected to last six months and generate legal costs running into millions of euro.

The case revolves around the near collapse of the UK's second-largest life insurer, Equitable Life. It claims former non-executive directors were negligent and in breach of duty over their alleged failure to correct an ill-fated pensions savings scheme set up in the 1970s.

Equitable Life is said to be chasing close to €5 billion in compensation from nine former non-executive directors and six executive directors, which will leave each of them facing possible bankruptcy.

Given the size of the claim, one of the key criteria for future non-executive directors may well be multimillionaire status and a love of lengthy, bitter litigation.

The outcome, as well as the publicity the case generates, has the potential to be a serious issue for corporate Ireland. It could make the search for quality people to act as non-executive directors more difficult than finding a needle in a haystack at night. This will have an impact on businesses of all sizes, not just the larger corporate and financial institutions.

Back in the 1970s, like many life insurers looking to attract new customers, Equitable Life offered higher-than-average guaranteed annuity rates on pension savings.

These promises were made during a time of high inflation. But as rates fell, Equitable struggled to meet those commitments, set at around 12 per cent. It tried to renege on guaranteed payouts to 90,000 customers in an attempt to maintain payments to the majority of its one million customers who did not hold guarantees.

This was challenged and last year the House of Lords ruled that Equitable Life had mistreated the 90,000 customers who held guarantees.

Last week, Britain's high court ruled that nine former non-executive directors, along with six executive directors of the life insurers, should face trial over the allegations.

It is also pursuing its auditors over allegations that they was negligent over the audit of the insurer's statutory accounts for the years 1997, 1998 and 1999. This claim is estimated at €3 billion.

The case will have repercussions for Irish boardrooms because, even if it is unsuccessful, many gifted potential non-executives will be deterred by the size and nature of the claim.

News of the trial comes as companies are attempting to meet the requirements expressed in new codes for better corporate governance devised as a response to the aftermath of the Enron collapse.

Many, like the British Higgs report which comes into force next week, have urged organisations to substantially increase the number of independent non-executive directors and to broaden the range of backgrounds from which non-executive directors are chosen.

The go-ahead for the trial also coincides with the passage of the Companies Bill through the Dáil. This proposes new demands on company directors who will, in future, be required to sign compliance statements concerning a company's obligations under company law, tax law and any other statutory law that could affect a company's financial statement.

The combination of the court case and the increased demands likely to be placed on directors will make finding potential non-executive directors considerably more difficult.

However, it is crucial that companies spread their net wide - Association of Chartered Certified Accountants in Ireland (ACCA) research has shown that effective non-executives can help to make the difference between struggling and thriving businesses.

In larger public limited companies, they play a vital role in protecting the interests of shareholders.

In smaller firms, our survey has shown that their primary role is to provide outside objectivity, to assist with strategic planning and to utilise their financial expertise.

Many members of the business community currently welcome the challenge of acting as non-executives for smaller businesses, as the relationships bring mutual benefits. Non-executive directors provide new perspectives and valuable advice to SMEs and, in the process, develop their own coaching skills, widen their network of contacts and gain the satisfaction of watching businesses grow. This needs to be preserved.

The Equitable Life case shows that there remains considerable uncertainty among many directors as to their responsibilities and liabilities. If the business community is to succeed in encouraging more individuals to become non-executive directors, we need to ensure that the scope and limits of their duties are clarified and understood.

We also need to ensure that non-executive directors, especially those who become involved with remuneration and audit committees, have an appropriate level of financial literacy.

Roger Acton is head of the Association of Chartered Certified Accountants in Ireland.