R the Government Actuary's Department v The Pensions Ombudsman
| Jurisdiction | England & Wales |
| Judge | Master of the Rolls,Lord Justice Moore-Bick,Lord Justice Jackson |
| Judgment Date | 22 July 2013 |
| Neutral Citation | [2013] EWCA Civ 901 |
| Docket Number | Case No: C1/2012/2976 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 July 2013 |
[2013] EWCA Civ 901
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, QUEEN'S BENCH DIVISION, ADMINISTRATIVE COURT
MR JUSTICE OUSELEY
CO103082011
Royal Courts of Justice
Strand, London, WC2A 2LL
The Master of the Rolls
Lord Justice Moore-bick
and
Lord Justice Jackson
Case No: C1/2012/2976
Mr Jonathan Swift QC and Mr Martin Chamberlain QC (instructed by Treasury Solicitors) for the Appellant
Mr Jonathan Evans (instructed by Pensions Ombudsman) for the Respondent
Hearing date: 10 July 2013
Approved Judgment
This appeal concerns a judicial review challenge brought by the Government Actuary's Department ("GAD") to a decision by the Pensions Ombudsman ("the Ombudsman") that GAD came within its jurisdiction in respect of acts or omissions relating to the Firemen's Pension Scheme (the "FPS") occurring in the period prior to 6 April 2005. Ouseley J dismissed the challenge. GAD appeals with the permission of Tomlinson LJ.
The Ombudsman has jurisdiction to investigate and determine complaints of maladministration under section 146(4) of the Pension Schemes Act 1993 ("the 1993 Act") and the Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996 ("the Regulations"). This jurisdiction applies in respect of the acts or omissions of a person "responsible for the management of the scheme", who by subsection (3) is defined as "the trustees or managers and the employer". The Regulations enable a complaint to be made against a person "concerned with the…..administration of the scheme". It is the meaning of these words that lies at the heart of the present appeal.
GAD is responsible for performing the duties of the Government Actuary. One of these duties is to produce and from time to time revise the actuarial tables used in certain public-sector pension schemes. These tables are not used by GAD, but they are used by those responsible for managing the schemes to perform certain calculations, including the calculation of the lump sums due on retirement to those scheme members who choose to commute part of their pension entitlement. One of the public-sector pension schemes in respect of which GAD prepares actuarial tables is the Firefighters' Pension Scheme ("FPS"), the provisions of which are contained in the Firemen's Pension Scheme Order 1992 ("the 1992 Order").
The 1992 Order was made under the Fire Services Act 1947. It contains a detailed set of rules regarding the operation of the FPS. Responsibility for running a pension fund rests with each fire and rescue authority. Among other things, they are required to receive pension contributions, determine the amounts of awards, and pay the sums awarded. GAD does not perform the calculation of lump sum awards or periodical payments. The fire and rescue authorities are responsible for making these calculations using the actuarial tables produced by GAD.
Prior to the judgment of Cox J in R (Police Federation of England and Wales) v Secretary of State for the Home Department [2009] EWHC 488 (Admin), GAD and the Department for Communities and Local Government ("the Department") operated on the shared assumption that the responsibility to commission a review of the actuarial tables referred to in rule B7(3) in schedule 2 of the 1992 Order and to publish revised tables lay with the Department. At para 105 of her judgment, Cox J held that GAD was subject to an implied statutory obligation to "prepare tables and, if necessary, to review and revise them, because they are needed to the enable the police authorities to comply with their express obligation to use them". It is common ground that what she said in relation to police authorities applies with equal force to other public sector authorities such as the fire and rescue authorities. There has been no challenge to Cox J's judgment.
In September 2008, Mr William Milne and other firefighters who had retired prior to August 2006 made a complaint to the Ombudsman against GAD, alleging that it had been guilty of maladministration by not updating the actuarial tables for the FPS between June 1998 and August 200Their case was that the failure by GAD to update the tables had resulted in the lump sums that they received at retirement being lower than they would have been if GAD had complied with its duty to review and update the tables. Mr Milne's complaint was selected as one of a number of lead cases.
The Ombudsman has not yet considered the substance of the complaints, but he rejected a preliminary point raised by GAD that he has no jurisdiction to consider the complaints in relation to the period up to 6 April 2005 on the grounds that GAD was not an "administrator" within the meaning of the Regulations. The Ombudsman concluded that GAD was an administrator during that period. It is common ground that, as a result of an amendment to the 1993 Act, GAD has been an administrator since 6 April 2005.
The statutory framework governing the jurisdiction of the Ombudsman
The Ombudsman's jurisdiction to investigate and determine complaints is set out in section 146 of the 1993 Act. Section 146 (1)(a) gives him jurisdiction to investigate and determine "a complaint made to him by or on behalf of an actual or potential beneficiary of an occupational pension scheme who alleges that he has sustained injustice in consequence of maladministration in connection with any act or omission of a person responsible for the management of the scheme".
Section 146 (3) provides:
"For the purposes of this Part, the following persons (subject to subsection (4)) are responsible for the management of an occupational scheme … -
(a) the trustees or managers, and
(b) the employer;
but in relation to a person falling within one of those paragraphs, references in this Part to another person responsible for the management of the same scheme are to a person falling within the other paragraph."
Section 146 (4) provides:
"Regulations may provide that, subject to any prescribed modifications or exceptions, this Part shall apply in the case of an occupational or personal pension scheme in relation to any prescribed person or body of persons where the person or body —
(a) is not a trustee or manager or employer, but
(b) is concerned with the financing or administration of, or the provision of benefits under, the scheme,
(c) as if for the purposes of this Part he were a person responsible for the management of the scheme."
The Regulations were made under section 146 (4) of the 1993 Act. They extend the Ombudsman's jurisdiction to complaints of maladministration by an "administrator" of a pension scheme, "administrator" being defined in regulation 1(2)(a) as:
"any person concerned with the administration of the scheme, other than the person responsible for the management of the scheme (as defined in section 146 (3) of the 1993 Act for the purposes of Part X of that Act)."
Case law on the meaning of "concerned with the administration of the scheme"
In Ewing v The Trustees of the Stockham Valve Limited Staff Retirement Benefit Scheme [2000] OPLR 257, the Northern Ireland Court of Appeal considered the position of solicitors engaged by the trustees of a scheme equivalent to the FPS to recover money owed to the pension fund by a third party. Sir Robert Carswell LCJ said:
"The work done by a solicitor may vary considerably from case to case. He may be engaged to perform tasks which are connected with the running of the affairs of his principal. It is, as counsel rightly submitted, a matter of fact and degree, depending on the terms of the solicitor's retainer. Where he's simply instructed to write a letter of claim to a debtor he is acting as the agent of the principal in carrying out his instructions. We do not consider that it can be said that in these circumstances he is concerned with the administration of the affairs of the principal. Arthur Cox were in that position. They were merely instructed to seek recovery of certain sums of money from the respondent, and wrote a letter of claim accordingly. In our view this cannot be said to have been "concerned with the administration of the scheme", and the Ombudsman was in error in so holding".
This judgment is of limited value to the present appeal because it contains no discussion of the meaning of the phrase "concerned with the administration of the scheme". But it does state that the question is one of fact and degree and provides an example of a person who clearly was not performing a role that was concerned with the administration of the scheme.
In R (Britannic Asset Management Limited) v Pensions Ombudsman, Lightman J ( [2002] EWHC 441 (Admin)) and the Court of Appeal ( [2002] EWCA Civ 1405) gave further consideration to the meaning of "concerned with the administration of the scheme". The facts in the Britannic case were as follows. The claimants were an asset manager, an insurance company and an investment management company, all within the same corporate group. They managed the underlying financial assets to which the value of the pensions scheme in question (a unit-linked long-term insurance policy) was linked. They also provided customer services to the trustees, who were the policy-holders. This involved producing monthly statements, processing investment and divestment instructions and dealing with customer queries. The trustees of the scheme had practised a substantial fraud on the beneficiaries, by requesting divestments of...
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