Bradley & Ors, R (on the application of) v Secretary of State for Work and Pensions

Findings by the Parliamentary Ombudsman that maladministration caused injustice are binding on the public authority, subject to judicial review where the findings are objectively flawed, irrational, peripheral or displaced by genuinely fresh evidence. Recommendations are not binding, but a public authority must reconsider them lawfully.

Official information about occupational pension protection was misleading where it suggested that the minimum funding requirement secured accrued benefits without adequately explaining the risks. Causation still required a material increase in risk or loss of a chance of a better outcome in the individual case. A large-scale failure to provide accurate information did not, without more, establish injustice for every person who suffered pension loss.

The claimants were members of occupational pension schemes which had been wound up with insufficient assets to meet their promised benefits. Following a lengthy investigation, the Parliamentary Commissioner for Administration found maladministration in the Government’s pension information, in a 2002 decision concerning the minimum funding requirement, and in the resulting injustice. She recommended that the Government consider restoring affected pension entitlements.

The Secretary of State rejected the relevant findings and recommendation. The claimants sought judicial review, arguing that the Ombudsman’s findings were binding and that the recommendation had been unlawfully rejected. They also advanced a free-standing claim under Article 1 of the First Protocol to the European Convention on Human Rights.

1. Parliamentary privilege. Evidence given by the Ombudsman to a House of Commons Select Committee could not be relied on in court because this would inhibit freedom of speech in Parliament and contravene Article 9 of the Bill of Rights 1689. A Select Committee report was not itself excluded by Article 9, but it was not useful to the court on the legal issues, which were for the court to decide.
2. Status of Ombudsman findings. The statutory schemes under the Parliamentary Commissioner Act 1967 and the Local Government Act 1974 distinguish findings from recommendations. Findings of maladministration and injustice are binding unless successfully challenged by judicial review. The same principle applies to the Parliamentary Ombudsman. The appropriate exceptions include findings objectively shown to be flawed or irrational, findings peripheral to the decision, or genuine fresh evidence requiring reconsideration. Recommendations are not mandatory orders and are not binding.
3. First Finding. The Ombudsman was entitled to find that official information about the minimum funding requirement was inaccurate, incomplete, inconsistent and potentially misleading. The principal leaflet gave the clear impression that members’ pensions were safe whatever happened to the employer, although the statutory scheme did not provide that security. The Secretary of State’s rejection of the maladministration finding was therefore quashed.
4. Causation of injustice. The Ombudsman could not treat every person who lost pension benefits on winding-up as having suffered injustice in consequence of maladministration. The statutory requirement of injustice in consequence of maladministration required at least a material increase in risk or loss of a chance of a better outcome caused by the maladministration in the individual case. The rejection of this part of the First Finding was upheld.
5. Third Finding. The Secretary of State was entitled to reject the finding that the 2002 change to the minimum funding requirement involved maladministration. The Department had a clear recommendation from the actuarial profession, supported without qualification by the Government Actuary’s Department. The absence of further documentary evidence did not itself establish maladministration.
6. First Recommendation. The recommendation to consider restoring pension entitlements was not binding, but its rejection had to be reconsidered in light of the upheld finding that maladministration had occurred. The Secretary of State had not misunderstood the recommendation or unlawfully failed to consider alternative funding arrangements. The rejection was nevertheless quashed because the political assessment might differ once the finding of maladministration was properly accepted.
7. Human rights claim. The claim under Article 1 of the First Protocol failed. An occupational pension entitlement did not require the State to provide full reimbursement for losses sustained by a large class whose schemes were not under direct governmental control. The claim was also out of time under section 7(5) of the Human Rights Act 1998; no extension was granted because the claim lacked substantive merit.

The Secretary of State was directed to reconsider the First Recommendation.

Not stated in the judgment.