UK - Prominent pension lawyers have attacked the ombudsman over his decision to no longer stand by his determinations in court.
And they believe David Laverick’s policy U-turn could be used by firms to “scare off” claimants from fighting an appeal in court.
Wragge & Co head of pensions Glyn Ryland said: “If a determination is challenged, the cost of the appeal is at the risk of the member. So under the new regime, employers could use exorbitant court costs – should they win the battle – as a way to scare off claimants.”
Ryland said Laverick’s move was probably triggered by a High Court ruling late last year (Moore’s v Pensions Ombudsman), which stated that if the ombudsman participated in an appeal and lost, he must pay any costs incurred by his presence at the court.
Eversheds head of pensions Giles Auton believes the ombudsman’s decision may have been influenced by budgetary restraints of his office. But he felt that the move raised the issue of “affordable justice”.
He said: “The prospect of paying tens of thousands of pounds in court costs is more than enough to put a scheme member off fighting an appeal.”
In his report, Laverick vehemently defended his actions and said the ombudsman had a different role from the courts. He stated that there would have been no need for Parliament to have introduced – and later endorsed – the concept of ombudsmen, if all they were expected to do was to “provide remedies” in the same way as the courts.
But Linklaters pensions litigation partner Mark Blyth said Laverick’s reasoning was “way off the mark”.
“There is nothing that says the ombudsman should adopt a different law from the courts. The ombudsman is there to provide a simple and cheap process of redress for scheme members who cannot afford the costs of disputes in the courts.”
• Laverick used the formal publication of his report to criticise the government for the “complex and confusing” regulations that govern company pension schemes.
Laverick said he has been left facing a “somewhat anarchical situation”.
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