The Report of the Parliamentary Commissioner for Administration (“the
Ombudsman”) entitled “Trusting in the pensions promise: government bodies and
the security of final salary occupational pensions” (HC 984) was published on 15
March 2006. The Report addressed the circumstances in which final salary schemes
were wound up underfunded and the role of Government in that regard. Click here for more
The Report found that leaflets published by the Department for Work and Pensions (DWP) between 1996 and 2004 encouraging the public to stay in company pension schemes were misleading and incomplete by failing to warn readers that their pensions were at risk if their company pension scheme wound up. The Ombudsman concluded that there had been maladministration resulting in injustice as a result of the actions of the DWP. However, the Secretary of State for Work and Pensions rejected the findings of the Report.
Four pensioners, all of whom have lost the substantial part of their retirement pensions, successfully challenged by way of judicial review the Secretary of State’s rejection of the Report: see the decision of Bean J.  EWHC 242 (Admin);  Pens. L.R. 87 and see here.
The Secretary of State’s appeal from the decision of Bean J. was dismissed by the Court of Appeal and the cross appeal of the Claimants allowed in part.
The Court of Appeal held that for the Secretary of State “to reject the Ombudsman’s findings in favour of his own view” it is necessary that “such a view is, itself, not irrational having regard to the legislative intention which underlies [the Parliamentary Commissioner Act 1967]. To put the point another way, it is not enough for a Minister who decides to reject the Ombudsman’s finding of maladministration simply to assert that he had a choice: he must have a reason for rejecting a finding which the Ombudsman has made after an investigation under the powers conferred by the Act” (see paras.51 and 72 of the judgment of Chadwick LJ).
James Maurici appeared for the Ombudsman instructed by Beachcroft LLP.