Announcement of second Judicial Review against Government

by Dr. Ros Altmann

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The Pensions Action Group’s solicitors have today written to the Department for Work and Pensions, notifying them of our intention to Judicially Review the recent decisions to extend the Financial Assistance Scheme (FAS).  The Judicial Review will cover two main points:

1. The extensions to the FAS do not comply with the High Court ruling against the Secretary of State in the earlier Judicial Review
2. The decision to include only some of the solvent employer schemes, while excluding others, is irrational, discriminatory and unlawful

The Government’s position on the plight of the victims of scheme wind-ups is incoherent and appears to consist of a series of knee-jerk reactions to unfolding events, with no proper strategy for actually solving the problems it has created for tens of thousands of people.  Piecemeal extensions to the FAS have been announced almost weekly, but these have not helped the people who need money most urgently.  Now the DWP has decided to set up a review to look at how to increase the FAS payouts to Pension Protection Fund (PPF) levels, but the review will not report until year-end.  This means any recommendations it makes may not be introduced until 2009!  This will be far too late for those worst affected.

The reality is that are still about 9000 out of the 10,000 people already past their pension age who have not received any money from FAS at all.  Some are in their late 60’s and early 70’s, many are very unwell and all are suffering daily without their pensions.  The Government’s decision to embark on yet another review is perhaps convenient politically, but is merely prolonging the agony for the victims.

In February, the Secretary of State was ordered by the High Court to reconsider the FAS in light of the fact that the DWP is guilty of maladministration, as found by the Parliamentary Ombudsman’s report 15 months ago.  The DWP has not done this.

Mr. Justice Bean ruled ‘no reasonable Secretary of State could rationally disagree’ that the Government misled scheme members about the security (or lack of it) of their company pensions.  However, the Secretary of State has decided that he does indeed disagree and has appealed against the judge’s verdict.  But meanwhile, he has said the latest FAS changes accept that the DWP is guilty of maladministration! 

The Secretary of State’s position on this issue is irrational and illogical.  The Government has consistently ignored all the evidence and all the rulings against it.  Such behaviour is totally unprecedented.  No Government has ever dismissed the Parliamentary Ombudsman, PASC and High Court like this.  Ministers seem to believe they are above the law and, if left unchallenged, this could pose a serious threat to our democracy.

We are also asking the Court to consider the position of solvent employer schemes.  Despite the fact that the Parliamentary Ombudsman, PASC and High Court made no distinction between different employer sponsors, the DWPs decision to include only some of these schemes is arbitrary, discriminatory and irrational – and may also breach Section 6 of the Human Rights Act 1998.

Sooner or later, the Government surely now knows it will have to provide a proper resolution to this issue.  There is widespread agreement, both inside and outside Parliament, that a fair resolution cannot be achieved at levels below those offered by the PPF.  For the sake of those who have suffered so much for so long, let’s hope it will be sooner and not later – many of them will not live that long.

For any further information contact Dr. Ros Altmann on 07799 404747.

ENDS

NOTES

1.  The Court is being asked to uphold that it is inconsistent and irrational for the Secretary of State to maintain an appeal claiming the finding of maladministration is flawed, whilst at the same time announcing that the extension to the FAS actually accepts that the maladministration did occur.   What maladministration has been admitted?  Who is guilty of that maladministration?  How does the extension provide an adequate remedy for the specific injustices each person has suffered?  None of this has been explained.

2.  Despite the narrow defeat of the recent package of cross-party amendments to the Pensions Bill, the House of Lords will be asked to vote on these again, in the hope of forcing the Government to take proper responsibility for what has happened to these people and end this dreadful scandal once and for all.  The amendments will call for the annuitisation of scheme assets to be put on hold, FAS benefits to be increased to the same level and on the same terms as the PPF and for all solvent employer schemes to be included.  Trustees should be allowed to pay benefits to members over pension age immediately (as happens in the PPF) to avoid the current situation of an assistance scheme which is not paying assistance.

3.  We have given the Government one week to reply to the letter before claim and will apply to the Court for an expedited hearing, given the urgency of the situation.

4.  The solicitors acting for the Claimants are Bindman and Partners.