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3 members are involved in the first case of its type regarding abuse and the jurisdiction of the Pensions Ombudsman

Pell Frischmann v Others HC12E02792 2013 EWHC 2203 (CH)

Most members of occupational pension schemes involved in a pensions dispute prefer to have their dispute determined by the Pensions Ombudsman (“PO”) rather than the Court. The reason for such a choice is a simple one; issuing Court proceedings exposes a member to the risk of having to pay the costs of the trustees and/or employer. Complaining to the PO does not. However, the applicable statutory regime prevents the PO from investigating when Court proceedings have already been commenced. In general terms the reverse is also true i.e. the Court will not entertain proceedings if a dispute has already been referred to the PO. When the member’s preference for the PO is not shared by the employer there is a clear incentive in being the first out of the block.

However, would it be an abuse, justifying a strike out, for an employer to commence proceedings in order to prevent a member from complaining to the PO when the member had engaged the internal dispute resolution process (“IDRP”) which is, save for exceptional circumstances, a pre-requisite before the PO will investigate and determine a complaint? This was the question facing the court in the above matter where David Grant acted for the member seeking to strike out the claim of an employer(represented by James Rickards) and, in the alternative, seek costs from the employer or the trustees (represented by Andrew Short QC).

By way of background the member (a former employee and director of the employer) claimed that he was entitled to an enhanced pension. The employer disagreed and in due course the member complained to the trustees through the IDRP. However, before the IDRP could be concluded the employer began Court proceedings to determine the member’s claim to an enhanced pension. By reason of the provisions of the Pension Schemes Act 1993 this meant that the member could not complain the PO and therefore faced the risk of costs.

The Judge held that the employer’s claim was not an abuse of process because the PO and the Court share jurisdiction and the statutory regime does not afford the PO preference over the Court. Additionally the Court held that it was not an abuse of process if there was (as she held to be the casehere) a genuine right to be vindicated. The Judge also dismissed the member’s application for prospective costs and restated the principles in this area.

The judgment is understood to be the first case to consider whether it is an abuse for an employer to issue proceedings to prevent the PO from investigating a complaint. It contains a useful overview of the relationship between the Court and the PO, the law on abuse of process and prospective costs.

News 7 Aug, 2013


Andrew Short KC

Call: 1990 Silk: 2010

David E Grant KC

Call: 1999 Silk: 2022

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