UK - The pensions ombudsman has attacked lawyers for time wasting and causing undue expense in member disputes.
The outburst comes after David Laverick released his longest determination – 51 pages – since taking up the role of ombudsman in September 2001.
He cited the “efforts” of an employer’s solicitor for the unnecessary length and costs of resolving a dispute which, in total, took more than two years.
In the case, Mr Milne, a deferred member of the James Hunt Dix Pension Fund, complained that trustees had depleted its assets which had “caused him injustice”.
Laverick found against the trustees but made no award in Mr Milne’s favour.
He said: “Solicitors acting for the trustees tell me that their clients have been faced with ‘ruinous expense’ in defending themselves against the allegations made against them.
“Without decrying the efforts of the solicitors and council to look after the interests of their clients, I am sure that the same result would have been achieved, albeit at less costs and possibly more quickly, without these efforts.”
The ombudsman heard that the scheme’s five trustees had unlawfully paid the professional fees of Hewitt Bacon & Woodrow out of scheme assets and had spent money on unnecessary legal costs when responding to the complaint.
He was also informed that a death in service benefit had also been paid out of scheme assets, even though the employer should have arranged for that benefit to be insured.
Laverick said the trustees were guilty of maladministration but made no award in favour of Mr Milne because he found the member had not suffered any injustice as a result.
He said the “casual connection” between the loss to scheme funds arising from maladministration and any loss of benefits was “too tenuous”.
Pinsent Curtis Biddle solicitor Simon Tyler said that “less ink might have been spilled” and less costs incurred if the parties had realised one issue was crucial to the whole case.
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