Ward v South Yorkshire Pensions Authority & Anor

An ombudsman may determine a pensions maladministration complaint from documentary evidence where the parties have had a fair opportunity to address the material issues. Compensation for non-financial loss is not legally excluded merely because there is no financial loss. However, the court should not remit a decision where any inadequacy of reasoning would make no practical difference to the outcome. In assessing financial loss, the question is what would probably have happened had the maladministration not occurred, tested against the contemporaneous evidence rather than the complainant’s later assertions.

Mr Ward appealed against the Pensions Ombudsman’s determination dated 13 May 2005, which rejected his complaint concerning the termination of his employment and the calculation of his pension benefits. He had been given pension estimates including an added-years element, but statutory restrictions arising from his army pension meant that the added-years element could not be paid.

Mr Ward alleged that the respondents’ failure to explain this qualification amounted to maladministration. He claimed financial loss, disappointed expectations and consequential ill health, and argued that the Ombudsman had failed to give adequate reasons and should have held an oral hearing. The central issue was whether the alleged maladministration had affected his decision to accept redundancy and retire.

1. Appeal dismissed. The Ombudsman’s decision was not shown to be perverse or materially inadequately reasoned.
2. The court rejected the respondents’ submission that maladministration could not in principle justify compensation for non-financial loss without financial loss. Westminster City Council v Haywood [1998] Ch 377 did not establish that proposition. It explained that an overstatement of pension entitlement might cause disappointed expectations, although in that case the payment of excess money had already provided adequate compensation.
3. The relevant counterfactual was what Mr Ward would probably have done had he received the correct pension information before termination. The contemporaneous documents supported the Ombudsman’s conclusion that Mr Ward had preferred redundancy and retirement, had not sought alternative employment, and had not challenged the termination when the true position became known. His later assertions were insufficient to displace those inferences.
4. Although the Ombudsman’s reference to the benefits not having been guaranteed was inexact, the essential conclusion was intelligible. Once the evidence was reduced to its essentials, the reasoning was apparent. Remittal would therefore serve no useful purpose.
5. Under Pension Schemes Act 1993, s.149(4), the choice of procedure was for the Ombudsman. The documentary procedure was reasonable on Wednesbury grounds because Mr Ward had been given ample opportunity to comment in writing, and an oral hearing would not have materially improved the evidence.

• High Court (Chancery Division): The appeal from the Pensions Ombudsman’s determination dated 13 May 2005 was dismissed.