James Cropper Plc v Aviva Life and Pensions UK Ltd
| Jurisdiction | England & Wales |
| Judge | Hodge,David R. Hodge |
| Judgment Date | 08 July 2022 |
| Neutral Citation | [2022] EWHC 1689 (Ch) |
| Docket Number | Case No: E30MA250 |
| Court | Chancery Division |
[2022] EWHC 1689 (Ch)
His Honour Judge Hodge QC
Sitting as a Judge of the High Court
Case No: E30MA250
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
IN MANCHESTER
BUSINESS LIST (ChD)
PENSIONS
Manchester Civil Justice Centre
1 Bridge Street West
Manchester M60 9DJ
PENSIONS — PROFESSIONAL NEGLIGENCE — LIMITATION — Liability of scheme administrator — Delay in closing Barber Window — Defendant's application to strike out and for summary judgment — Claimants' application for permission to amend particulars of claim — Limitation Act 1980, ss 14A, 14B, 32
The following authorities are referred to in this judgment:
Ballinger v Mercer Ltd [2014] EWCA Civ 996, [2014] 1 WLR 3597
Barber v Guardian Royal Exchange Assurance Group [1991] Q.B. 344
Capita ATL Pension Trustees Ltd v Sedgwick Financial Services Ltd [2016] EWHC 214 (Ch)
Diamandis v Wills [2015] EWHC 312 (Ch)
Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)
Hyde v Nygate [2019] EWHC 1516 (Ch)
Mr Richard Hitchcock QC (instructed by DWF Law LLP, Manchester) for the First Claimant
Mr Sebastian Allen (instructed by Shoosmiths LLP, Leeds) for the Second Claimant
Mr Nigel A. Burroughs (instructed by Eversheds Sutherland (International) LLP, Birmingham) for the Defendant
Hearing date: Friday 27 May 2022
Draft circulated: Friday 1 July 2022
Judgment handed down: Friday 8 July 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HIS HONOUR JUDGE Hodge QC
This judgment was handed down remotely by circulation to the parties' representatives by email. It will also be released for publication on the National Archives caselaw website. The date and time for hand-down is deemed to be 10.00 am on Friday, 8 July 2022.
His Honour Judge Hodge QC:
I: Introduction
This is my considered judgment on cross-applications in this professional negligence claim arising out of the administration of the James Cropper Plc Pension Scheme ( the Scheme): (1) by the only remaining defendant (dated as long ago as 30 March 2021) to strike out the particulars of claim as disclosing no reasonable grounds for bringing the claim and/or for summary judgment against both claimants on the whole of the claim; and (b) by the claimants (as recently as 23 May 2022) to amend the particulars of claim. The focus of both applications is on issues of limitation.
The first claimant ( James Cropper) is the principal employer of the Scheme, which was first established in January 1964. Since 15 November 2011 the second claimant ( Entrust) has been the sole corporate trustee of the Scheme. From about February 1984 until (as was originally understood and pleaded by the claimants about June 2004 but in fact) about June 2008 the Scheme was administered by Friends Provident Life Office (later Friends Provident Life and Pensions Limited), whose policies, assets and liabilities have subsequently been acquired by the sole remaining defendant, Aviva Life & Pensions Limited. In this judgment I shall use the terms Friends Life to refer to the defendant scheme administrator and Aviva when I am referring solely to the third defendant.
The claimants' case is that Friends Life failed to provide reasonably competent advice and services in connection with the equalisation of the normal retirement dates ( NRDs) of male and female members of the Scheme pursuant to the decision of the European Court of Justice in Barber v Guardian Royal Exchange Assurance Group [1991] Q.B. 344 ( Barber). As clarified by a later ECJ decision, the effect of Barber is that male members of an occupational pension scheme are to be treated as having the same NRD as female members in relation to pensionable service after 17 May 1990 until the Scheme equalises their benefits. Friends Life administered the Scheme on the basis that male and female NRDs were equalised (at 65) with effect from 1 November 1995, and they advised the claimants that equalisation had occurred with effect from that date. However, Friends Life were wrong to do so because NRDs were not equalised until a deed dated 19 December 2002, and then only with effect from that later date. The result is that the Scheme's ‘ Barber Window’ – the period from 17 May 1990 up until the date on which NRDs were effectively equalised – did not close on 31 October 1995 (as the claimants had intended and understood) but remained open until 19 December 2002. Throughout that period, disadvantaged male members of the Scheme continued to accrue more valuable benefits than the claimants had either intended or understood because they continued to be able to do so on the basis of the female members' NRD (of 60). Because the Barber Window was prolonged by some seven years, the claimants assert that they have been left with substantial unintended liabilities in the Scheme. These are said to amount to some £3,500,000.
This judgment is divided into six sections as follows:
I: Introduction
II: Background
III: The defendant's application: submissions
IV: The claimants' amendment application: submissions
V: Analysis and conclusions
VI: Disposal
II: Background
At the time of Friends Life's appointment, the Scheme was governed by a Supplemental Deed and Rules dated 12 May 1971 ( the 1971 Rules). The power of amendment contained in rule 40 of the 1971 Rules required a deed to be executed by the principal employer and the trustees in order to effect any alteration of the Scheme and to make new provisions. Rule 2(k) defined the NRD of a male member as his 65 th birthday and of a female member as her 60 th birthday. On 14 July 1995 a new trust deed and rules (drafted by Friends Life) were executed but these made no changes either to the requirement for alterations to the Scheme to be effected by a deed executed by the principal employer and the trustees or to the unequalised NRDs of 65 and 60 for male and female members respectively. It is the claimants' case that by maintaining unequal NRDs, these new rules continued the unlawful discrimination of the previous rules. Pending disclosure, it is not clear why the 1995 deed and rules failed to provide for equalised NRDs. The claimants allege that Friends Life had recognised the need for the equalisation of NRDs by about this time, or shortly thereafter, as evidenced by the minutes of a Scheme trustees' meeting in September 1995.
On 2 October 1995, James Cropper issued an announcement to all members of the Scheme notifying them that as from 1 November 1995 the NRDs for male and female members would be equalised at 65. The original draft of this announcement had been prepared by Friends Life although it was later amended by James Cropper before issue. James Cropper provided a copy of this announcement to Friends Life on 16 October 1995 under cover of a letter which stated: “We have finally put to bed the question of equalisation … I enclose a copy of the announcement to all female staff…which is different from the suggested wording of your colleagues”. James Cropper was never advised that this announcement would be of no effect in the absence of a validly executed amending deed. Despite this, Friends Life proceeded to administer the Scheme on the basis that the 1995 announcement was a valid amending instrument. It was not until 19 December 2002 that a new deed of alteration was executed, setting out a new deed and rules for the Scheme. The power of alteration was amended so that future alterations to the Scheme rules (as distinct from the provisions of the trust deed) could be effected by the consent in writing of the principal employer and by the signatures under hand of each individual trustee; and (subject to certain minor specified exceptions) the NRDs for male and female members were equalised at age 65. It is common ground that, consistently with s. 67 of the Pensions Act 1995, such equalisation only operated prospectively as from 19 December 2002 and could not operate detrimentally to affect accrued pension rights.
On 7 December 2017 solicitors acting for James Cropper gave Aviva preliminary notification of this claim. The claimants and Aviva entered into a standstill agreement for limitation purposes on 15 December 2017 (which terminated on 7 December 2018). This standstill agreement stopped time running after 15 December 2017 with the result that the 15-year long-stop date in s. 14B(1) of the Limitation Act 1980 (the Limitation Act) is 15 December 2002 and (subject to deliberate concealment for the purposes of s. 32) any claim in respect of Friends Life's negligence prior to that date is now statute-barred. A letter of claim was sent to Aviva pursuant to the pre-action protocol for professional negligence on 20 August 2018, and Aviva provided a letter of response on 6 December 2018. In the meantime, on 13 April 2018 (and solely because they had agreed a shorter standstill period than Aviva), the claimants had issued a claim form against a firm of solicitors (and its successor practice) which had formerly acted in relation to the Scheme. This claim form was amended to add Aviva as the third defendant on 7 December 2018. Following the service of notice of discontinuance dated 3 March 2021, a consent order discontinuing the claim against the first and second defendants was made on 4 March 2021; and this claim therefore proceeds against Aviva alone.
The breaches alleged against Aviva are set out at paragraph 43 of the existing particulars of claim. In summary, it is alleged that Friends Life:
(1) failed in 1995 and thereafter to advise...
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PSGS Trust Corporation Ltd v Aon UK Ltd
...own argument) more naturally fell under the aegis of legal advice. 152 The claimant referred me to the recent case of James Cropper Plc v Aviva Life and Pensions UK Limited [2022] EWHC 1689 (Ch) where the court considered some amendments in a case involving a defendant which among other th......