Arjo Wiggins Ltd v Ralph

The court considered the scope of the Pensions Ombudsman's jurisdiction and remedial powers where a complaint relates to events that would, if litigated in court, be statute barred under the Limitation Act 1980. Key provisions considered included regulation 5 of the Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996 and section 151(2) of the Pension Schemes Act 1993. The court held that regulation 5 gives the Pensions Ombudsman power to investigate and determine complaints even where an equivalent cause of action in court would be time-barred. However, in determining disputes that involve legal rights the Ombudsman must apply established legal principles and give effect to a valid limitation defence; he therefore cannot award substantive relief in a case where a court would be obliged to dismiss the claim on limitation grounds. The court confirmed an exception for complaints of pure maladministration (for which there is no comparable limitation period), where the Ombudsman may grant remedies appropriate to maladministration.

This appeal arose from a determination of the Pensions Ombudsman in favour of Mr Henry Ralph, who claimed that negligent advice from his former employer's pensions department in 1986 induced him to transfer a defined benefit pension. The Ombudsman directed Arjo Wiggins to restore Mr Ralph to the scheme or provide equivalent benefits. The employer appealed, contending that the Ombudsman should not have determined or awarded relief because the claim would have been statute barred had it been brought in court. The appeal raised three related issues:

• whether the Ombudsman lacks jurisdiction to entertain complaints that would be statute-barred in court;
• whether, even if he has jurisdiction, he should decline to exercise it as a matter of discretion; and
• whether, if he decides such a complaint, he may grant substantive relief that a court could not because of limitation.

The court analysed the statutory scheme (Pension Schemes Act 1993 and regulations) and authorities establishing that the Ombudsman must decide disputes according to law rather than by an independent standard of fairness. The court concluded that regulation 5 permits the Ombudsman to investigate and determine complaints received within the regulation's timescales, including those that would be time-barred in court. But prior authorities (including Wakelin v Read, Edge v Pensions Ombudsman and Hillsdown Holdings plc v Pensions Ombudsman) require that, when a dispute involves legal rights, the Ombudsman must apply legal principles and give effect to a valid limitation defence; he cannot grant substantive relief inconsistent with those legal defences. The court accepted that the Ombudsman retains a role under regulation 5 to exercise discretion (for example under regulation 5(3)) in borderline or stale cases and that staleness is a relevant factor where discretion applies. The court also dealt briefly with criticisms of the Ombudsman's factual findings in this case (advice v information; credibility of the claimant) and held that those were matters of fact for the Ombudsman and not for the court to overturn on law.

The court allowed the appeal on the specific ground that the Ombudsman had no power to award substantive relief to a complainant where a limitation defence would have defeated the claim in court, and invited submissions on the form of the order to give effect to that conclusion.

Appeal allowed. The court held that regulation 5 of the Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996 authorises the Ombudsman to investigate and determine complaints even if the comparable court action would be statute-barred. However, where the Ombudsman is determining disputes that involve legal rights he must apply established legal principles and give effect to a valid Limitation Act 1980 defence; accordingly he cannot award substantive relief in a case where a court would be obliged to dismiss the claim on limitation grounds. An exception exists for pure maladministration, which is not subject to the court's limitation defences.

Appeal from a determination of the Pensions Ombudsman. Permission to appeal was granted by Morgan J. No further appellate history is stated in the judgment.