EMAG

The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

Search
Media Stories: 08/02/2008 - Court of Appeal ruling on OPs and PO

Press Coverage - 8 February 2008

Government's pension actions irrational, say senior judges

The Guardian, Clare Dyer, legal editor
Friday February 8, 2008

The government's treatment of thousands of workers who lost their occupational pensions was branded irrational by three senior judges yesterday.

The appeal court upheld a high court judgment last January condemning ministers for refusing to accept a finding of maladministration by the parliamentary ombudsman, Ann Abraham, over "inaccurate and misleading" leaflets.

The ombudsman had found that the government assurances, which said that occupational pensions were safe, had failed to explain that there was only a 50% chance that members would receive their full pensions if their employers went bust before they retired.

Sir John Chadwick, giving his ruling at the appeal court, said the maladministration had caused "outrage, distress, anxiety and uncertainty ... the loss of opportunities to make informed choices or to take remedial action".

Lord Justice Wall said: "The complainants ... were decent, hardworking people who, through no fault of their own, had been - or were at serious risk of being - deprived of that for which they had worked throughout their lives, namely a modestly comfortable retirement."

The court refused permission to appeal to the House of Lords but a Department for Work and Pensions spokesman said it would decide after considering the judgment whether to ask the law lords to hear an appeal. "We have announced a significant settlement which will help some 140,000 people who lost their pensions."

Dr Ros Altmann, who leads the Pensions Action Group, which campaigned alongside those who lost pensions, said she was astonished the government might be prepared to spend more money petitioning the Lords to hear the case.

John Halford, the solicitor representing the pensions campaigners, said: "Though recent improvements to the financial assistance scheme will be of some help to them, justice still demands acceptance of responsibility, an apology and redress."


Government loses appeal on pension advice error

The Times, Michael Herman 8th Feb, 2008

Pensioners who lost the bulk of their retirement savings after following misleading Government advice won a moral victory yesterday when a court criticised handling of the issue by the Department for Work and Pensions (DWP).

As many as 125,000 workers lost out after being told their occupational pension schemes were safe. The Government initially refused to accept a recommendation by the Parliamentary Ombudsman to compensate them, but changed its mind after the High Court told the DWP to reconsider last year.

However, despite extending its Financial Assistance Scheme to cover victims of collapsed occupational schemes, the DWP refused to accept the High Court's ratification of the Ombudsman's findings that the losses were because of the DWP's own “maladministration” - or that the pensioners involved suffered injustice.

The Government appealed against this aspect of the High Court decision, and its appeal was rejected yesterday.

In the Court of Appeal, Lord Justice Chadwick said the finding of “maladministration” was justified and that the maladministration led directly to the pensioners suffering an injustice.

The maladministration caused “a sense of outrage, distress, anxiety and uncertainty”, the judge said, as well as “the loss of opportunities to make informed choices ... and the distortion of the reality facing scheme members”.

Since the pensioners will already get up to 90 per cent of their pensions' value via the Government's Financial Assistance Scheme, yesterday's ruling will not alter their financial position, lawyers said. Nicholas Heaton, of Lovells, said: “It is a moral victory, in that the Court of Appeal agreed with the High Court and the Parliamentary Ombudsman that government literature ... in the late 1990s had been misleading about the security of pensions.”

The DWP said: “We have already announced a significant settlement, which will help some 140,000 people who lost their pensions.” The DWP would now decide whether it wished to appeal to the House of Lords, it said.


Govt slammed yet again for injustice to pension victims

Money Marketing: Nicola York - 07-Feb-2008

Three Court of Appeal judges have today found the Government guilty of misleading 125,000 people about the safety of their pensions making it the sixth judgement against the Government in this matter.

The Court of Appeal has confirmed the Judicial Review victory against the Government of 125,000 workers who lost their occupational pensions when their company schemes were wound up.

The Secretary of State for Work and Pension's appeal against the High Court's ruling that "no reasonable Secretary of State could rationally disagree" with the Ombudsman was dismissed this morning.

The three judges confirmed that the Secretary of State's rejection of the Parliamentary Ombudsman's findings was irrational and unlawful.

It also rules that he must accept that his Department caused injustices which go beyond just financial losses.

The verdict says the Government's maladministration also led to distress, anxiety, uncertainty and lost opportunities to make informed choices about their pensions.

Secretary of state for work and pensions James Purnell intends to appeal against the decision in the House of Lords.

Pensions campaigner Ros Altmann says: "We warmly welcome this judgment which, yet again, vindicates our arguments and confirms that the Government misled trusting citizens about the security of their pension savings. But we are astonished that the Secretary of State, James Purnell, wants to appeal to the House of Lords. It is now 6 - nil against the DWP. How many verdicts will it take to make the Government see sense?

"This attitude merely reinforces the High Court and Court of Appeal verdicts that the Government's decisions in this matter are irrational. For the past few years, it has tried, unsuccessfully, to wear us down and even tried to bully the victims into submission, by threatening to bankrupt them if they lost the case."


Court maintains pension verdict

BBC

The Appeal Court has upheld a verdict that government maladministration played a role in tens of thousands of workers losing their pensions.

Last year the High Court ruled that government leaflets helped mislead up to 125,000 people whose pension schemes went bust between 1997 and 2005.

The Appeal Court said the government's subsequent appeal was "irrational".

The government may now appeal further to the House of Lords, a suggestion campaigners have called "outrageous".

"We will want to consider this complex and lengthy judgment in more detail with our colleagues in government before deciding whether to pursue an appeal," said a spokesman for the Department of Work and Pensions (DWP).

But Ros Altmann, a leading campaigner for the pensioners involved, was scathing of the government's attitude.

"The secretary of state's appeal against last year's High Court judicial review ruling that 'no reasonable secretary of state could rationally disagree' with the Ombudsman, was dismissed," she said.

"In fact, today's verdict is even stronger than last year's High Court ruling.

"The three judges not only confirmed that the secretary of state's rejection of the Parliamentary Ombudsman's findings was irrational and unlawful, but also ruled that he must accept that his department caused injustices which go beyond just financial losses," she added.

Long campaign

The issue revolves around a long campaign to obtain better compensation for members of pension schemes that were closed while insolvent and which then fell under the umbrella of the Financial Assistance Scheme (FAS).

Two years ago, the Parliamentary Ombudsman, Ann Abraham, published a highly critical report on government's role in the saga.

She concluded that the government had published leaflets and other literature that had lulled some scheme trustees and members into a false sense of security over the protection then offered to them by the state.

She recommended that compensation be paid.

Her main finding of maladministration was subsequently upheld in a judicial review in the High Court last year after the government rejected her initial findings and, at first, refused to act on them.

Last December the government finally caved in to pressure and decided that it would, after all, improve substantially the financing and scope of the FAS.

This would bring it much more closely into line with the benefits paid out by the Pension Protection Fund (PPF), which came into operation in April 2005.

That fund already covers members of schemes that have gone bust since 2005.

Appeal findings

The meaning of the Appeal Court's ruling is disputed by the DWP.

It acknowledged that the original finding of maladministration, for publishing misleading official information, had been upheld again.

But it said the court had supported its view that "the maladministration was not a significant contributory cause of the financial losses suffered by individuals.

"[It] ruled that some non-financial losses were caused by the maladministration.

"[It] found in the government's favour on the point relating to the Ombudsman's findings not being binding," the DWP claimed.

However Ms Altmann said the government was misreading the ruling.

"The Court did not conclude that no financial losses were caused by maladministration, rather that not all the losses of all the scheme members were caused by it," she said.

As for the Ombudsman's rulings not being binding on ministers, she said: "This only applies to other cases."

"In this case, the ruling made no difference to the outcome in because the Government failed to provide cogent reasons for [its] rejection," she said.

The Ombudsman said she was "still considering the judgement".


Work pensions fight goes to Lords

The Herald, SIMON BAIN February 08 2008

Campaigners for the 125,000 victims of lost workplace pensions were claiming final victory in their David and Goliath action against the government yesterday as the Court of Appeal backed their case.

It was the latest damning judgment on the refusal by the Department of Work and Pensions (DWP) to accept a parliamentary ombudsman's report which two years ago found it guilty of maladministration and injustice.

Although the Court of Appeal refused the DWP leave to appeal to the House of Lords, it appeared last night that the government would ignore even that ruling and petition the Lords directly.

The ombudsman had found that government assurances over the security of pensions saving at work were "inaccurate and misleading". The High Court, giving judicial review following a petition brought by four pensioners, had already ruled that the secretary of state had acted "irrationally" in defying the judgment.

Sir John Chadwick, giving his ruling at the Court of Appeal, said the maladministration had directly caused "a sense of outrage, distress, anxiety and uncertainty the loss of opportunities to make informed choices or to take remedial action".

Lord Justice Wall said: "Nobody reading the papers in this case could have anything but the utmost sympathy for the plight of the complainants, all of whom, it seemed to me, were decent, hardworking people who, through no fault of their own, had been - or were at serious risk of being - deprived of that for which they had worked throughout their lives, namely a modestly comfortable retirement."

Dr Ros Altmann, adviser to the Pensions Action Group which backed the case, said she was "astonished" that the government was prepared to spend more of taxpayers' money petitioning the House of Lords.

John Halford, the solicitor representing the pensions campaigners, said of the ruling: "The Court of Appeal is the latest independent body to conclude that the pensions ministers have been wilfully blind to the failings of the department and the multiple injustices that thousands of working people have suffered as a direct result.

"Though recent improvements to the Financial Assistance Scheme will be of some help to them, justice still demands acceptance of responsibility, an apology and redress of the outrage and distress caused."

Ministers have claimed that the cost of meeting the ombudsman's recommendations for compensation would be £15bn, but the actual cost translates into a maximum £3.7bn over 60 years, or £100m a year in real terms.


Moral win for victims of pension collapse

Financial Times, Megan Murphy, Law Courts Correspondent

Published: February 8 2008

Some 130,000 victims of collapsed occupational pension schemes claimed a moral victory yesterday after the Court of Appeal ruled that ministers were wrong to reject damning findings about how the schemes were administered.

The decision will not increase the compensation the government has agreed to pay to workers who lost their pensions when their companies went bust. But campaigners said they hoped the ruling would prompt ministers to accept responsibility and apologise to people who suffered distress.

The dispute centred on a report by the parliamentary ombudsman in 2006, which found that the Department for Work and Pensions issued misleading advice about occupational pensions and should consider compensating people whose schemes collapsed in the late 1990s and early 2000s.

Four pensioners brought judicial review proceedings when the government rejected the findings and declined to award any money. John Halford, their solicitor, said: "The Court of Appeal is the latest independent body to conclude that pensions ministers have been wilfully blind to the failings of their department and the multiple injustices that thousands of working people have suffered as a direct result.''

Peter Hain, then pensions secretary, in December announced a £3.9bn package that will provide broadly the same level of compensation as workers protected by the Pension Protection Fund.

Campaigners said the government was not distributing the funds fast enough.


Ros Altmann writes:

ANOTHER DAMNING VERDICT AGAINST THE GOVERNMENT
But DWP in denial – wants to waste more taxpayers' money on Lords Appeal

This morning, three Court of Appeal judges delivered another crushing verdict against the Government. The Secretary of State's appeal against last year's High Court judicial review ruling that 'no reasonable Secretary of State could rationally disagree' with the Ombudsman, was dismissed. In fact, today's verdict is even stronger than last year's High Court ruling. The three judges not only confirmed that the Secretary of State's rejection of the Parliamentary Ombudsman's findings was irrational and unlawful, but also ruled that he must accept that his Department caused injustices which go beyond just financial losses. The Government DID mislead at least 125,000 people about the safety of their pensions and caused their suffering. The verdict says the Government's maladministration also led to:

  • a sense of outrage
  • distress
  • anxiety
  • uncertainty
  • lost opportunities to make informed choices about their pensions
  • and denied them any chance to take remedial action to protect their pensions.

The Pensions Action Group warmly welcomes this judgment which, yet again, vindicates our arguments and confirms that the Government misled trusting citizens about the security of their pension savings. But we are astonished that the Secretary of State, James Purnell, wants to appeal to the House of Lords. It is now 6 – nil against the DWP. How many verdicts will it take to make the Government see sense?

This attitude merely reinforces the High Court and Court of Appeal verdicts that the Government's decisions in this matter are irrational. For the past few years, it has tried, unsuccessfully, to wear us down and even tried to bully the victims into submission, by threatening to bankrupt them if they lost the case.

We are vigorously opposing the Government's request for leave to appeal to the House of Lords in this case. It is a waste of taxpayers' money and would just further prolong the suffering caused.

The Government's argument is that Ministers are perfectly entitled to reject their own Ombudsman's findings if they 'do not agree' with them, and even if they have no good 'cogent' reasons for disagreeing! This cannot be right. This outrageous scandal has been a worrying affront to our democracy. Our Parliamentary safeguards are not working well enough to protect ordinary people as intended. In this particular case, a Minister who was not there at the time, who admitted he had not even fully read the Ombudsman's report, and who has not objectively investigated all the evidence, still wants to be entitled to prefer his own view over that of the independent adjudicator established by Parliament to protect citizens from Government wrongdoing – without even having to provide cogent reasons!

The Government wants to make a last desperate appeal against a verdict that it has never liked. It beggars belief that the DWP would waste still more taxpayers' money fighting this case, trying to defend the indefensible. Despite such a startlingly strong verdict against the Government, it still wants to wriggle out of taking any blame for what it did. As the Parliamentary Ombudsman herself said 'it's maladministration, get over it'. But it seems the Government is unable to bring itself to do so.

Despite Peter Hain's welcome pre-Christmas announcement of increasing the Financial Assistance Scheme (FAS) payments to the Pension Protection Fund level for all victims, the money is not yet coming through. There is much work to be done in ensuring that all those who should be paid will actually start receiving their money and we urge the Government to work as quickly as possible to get the money to people. Instead of officials mounting a challenge against these legal verdicts and denying any wrongdoing, they should be working on speeding up the resolution of the problems that they caused!

In any case, having already offered fair treatment to most of the victims, why does the Government still refuse to admit it did anything wrong? The FAS payments are only classed as 'assistance' not 'compensation', and there is no remedy for the non-financial injustices so many of these people have endured. At the very least it would mean a great deal to many of the victims to receive an apology from the Government for what it has done to them, but none has been offered.

We need the Secretary of State to face up to his responsibilities and apologise to past victims of this official 'mis-selling' of private pensions, while also ensuring that the Government does not make the same mistakes in future.

And what about the implications for the new proposed personal pension accounts in future? If there are significant risks that people may lose much or all of any pension savings because of means testing in the pension credit calculations, as will potentially be the case for hundreds of thousands of personal account contributors, the Government must make sure they are told. They should be warned of the risks before being automatically enrolled into a pension.

We don't want to have to watch thousands of people in future going through the same trauma as these victims have suffered. The Government must face up to its responsibilities to ordinary citizens who trust officialdom and want to provide for their own future. If they end up finding their money is all gone because the Government did not take enough care to properly inform them of the risks they face, and prevented them from making properly informed choices for their own future, this case will come back to haunt us all.

Dr. Ros Altmann