Pensions litigation included in civil court procedure guide for first time

Disputes over pension schemes form a "regular part" of the Chancery division's work, according to the guidance (131-page/782KB PDF). However, the new guide acknowledges that "specialist" knowledge is often required in pensions disputes. To reflect this, a party may apply to the chief master for a pensions case to be assigned to the specialist master, Master Teverson.  

"The Chancery division is formally acknowledging the complexity of pensions litigation and the need for specialist judges who understand the quirks of pensions law," said pensions litigation expert Isabel Nurse-Marsh of Pinsent Masons, the law firm behind Out-Law.com. "Pensions law is not just a matter of trust law. Having a dedicated master is likely to result in cost savings for client, as the master will have the benefit of understanding the complex pensions arena."

"The inclusion of specific provisions for pensions litigation probably reflects the number of cases going to court, which the guide acknowledges is now a regular part of Chancery division work," said pensions litigation expert Hayley Goldstone of Pinsent Masons. "We have certainly noticed an increasing trend for schemes to apply for directions on rule interpretation, or pursuing rectification claims."

The Chancery division is one of the three historical divisions of the High Court in England and Wales. It deals with business law, trusts law, probate and insolvency cases, as well as more specialist cases. Cases in the Chancery division are governed by the Civil Procedure Rules (CPR) and practice directions, as with all civil court cases. The Chancery Guide is intended to provide practical information for court users and should be used in conjunction with the CPR.

As many pension schemes, particularly occupational pension schemes, are established under trust, disputes in relation to them tend to be heard by the Chancery division due to its jurisdiction in relation to trusts. However, the Chancery division hears many other pensions cases unrelated to trusts law including professional negligence claims, claims against action taken by the Pensions Regulator using its statutory powers, and statutory appeals against decisions of the Pensions Ombudsman.

Many pensions claims are brought under Part 8 of the CPR, which sets out an alternative procedure for claims where there is unlikely to be a substantial dispute of fact. These claims are usually brought by trustees applying to court about questions of construction or seeking directions, but can be brought by any party with a "sufficient interest" in matters involving the execution of the trust. Claims in which substantial factual issues need to be resolved, such as professional negligence cases or breaches of trust, will usually be issued under Part 7 of the CPR.

The updated guidance sets out the courts' views on the circumstances in which a Part 7 or a Part 8 claim is the most appropriate route, and cites previous cases that practitioners may wish to have regard to when setting out claims. It also provides guidance on the use of one or more 'representative beneficiaries' to represent the interests of all the members of the pension scheme, and summarises the procedure for appealing decisions of the Pensions Ombudsman.

"By providing guidance on the courts' view in relation to the most appropriate route, the guide is likely to ensure that proceedings are started under the most appropriate part first time and reduce debate between practitioners - thereby reducing the cost to the client," said pensions litigation expert Charlotte Scholes of Pinsent Masons.

"Time and time again parties are looking to get problems with deeds corrected or questions of trust law dealt with as cost effectively as possible. It is helpful therefore that the guidance cites cases which the Court considers good examples in various different situations and that it provides more of an insight into the matters the courts will have expected them to consider in advance, directing them down the right path reducing the costs of proceedings. The clients will also benefit from this strategic 'steer' from the courts," she said.

The guide also sets out information about the process of appealing a determination or direction of the Pensions Ombudsman to the Chancery division, including the requirement for permission from the High Court and relevant time limits. The person making the claim must also serve notice on the person from whose decision the appeal is brought, particularly in the case of the Ombudsman who "may wish to appear on the appeal if it potentially affects his jurisdiction or practice", according to the guide. The trustee, employer or other respondent should also confirm that this has been done, particularly where the scheme member is appearing unrepresented, according to the guide.

"It is good to see that the courts are lined up with the view of the Pensions Ombudsman on when he will appear in cases against his determinations," said pensions litigation expert Bethan Rundall of Pinsent Masons. "It is also positive that the courts are willing to encourage respondents to take on more of the responsibility when a member is unrepresented. This reflects the fact that the Pensions Ombudsman process is there to protect members."