Batt v Royal Mail

On an appeal on a point of law from a pensions ombudsman’s decision, the court examines whether the employer’s decision-making was legally defective or amounted to maladministration. The employer must consider relevant matters, exclude irrelevant matters, interpret the pension rules correctly, ask the right questions and reach a non-perverse conclusion. Procedural defects at an earlier stage will generally be immaterial where an independent medical appeal process has subsequently considered the substance of the claim, unless the defects undermine the reliability of that process. An ill-health entitlement based on incapacity for the foreseeable future is distinct from an enhanced pension requiring permanent incapacity. Where the medical evidence does not support permanent incapacity, no injustice is established.

John Batt appealed from the Deputy Pensions Ombudsman’s decision of 19 August 2010 rejecting his complaint against Royal Mail. He had been retired on ill-health grounds and received a lump sum, but was denied an immediate enhanced pension because Royal Mail concluded that he satisfied the ill-health test but not the more demanding incapacity test.

Mr Batt alleged that Royal Mail’s assessment process involved procedural irregularities, including the use of particular medical advisers, insufficient time to obtain psychiatric evidence, and failures concerning medical reports. The central issue was whether those matters disclosed an error of law or maladministration, and whether Royal Mail’s conclusion that he was not permanently incapable of work was legally unsustainable.

1. Appeal dismissed. The Deputy Pensions Ombudsman had made no error of law in rejecting the complaint.
2. The relevant decision-maker had to take account of all relevant matters, disregard irrelevant matters, interpret the pension rules correctly, ask the right questions and reach a conclusion that was not perverse. Royal Mail was entitled to rely reasonably on the opinions of its medical advisers and the independent medical board, and to prefer those opinions after weighing competing medical evidence in the absence of strong reasons to the contrary.
3. The ill-health and incapacity tests were materially different. The former concerned incapacity for the foreseeable future, whereas the latter required permanent incapacity, including incapacity to engage in suitable employment with another employer.
4. Procedural irregularities at an earlier stage were immaterial unless they undermined the reliability of the independent medical board’s opinion. It was therefore immaterial that a different doctor might have conducted an initial review, that further time had not been given to obtain psychiatric evidence before that review, or that a medical report had not been supplied by Royal Mail where the claimant himself supplied it and the board considered it.
5. The omission of express reference to some medical material did not establish maladministration. The board had conducted its own psychiatric assessment, and the available medical evidence did not demonstrate permanent incapacity. Even if an error of law had been identified, the absence of medical advice supporting permanent incapacity meant that Mr Batt had suffered no injustice.

The appeal was dismissed.

• High Court (Chancery Division): The appeal on points of law was dismissed.
• Deputy Pensions Ombudsman: The complaint against Royal Mail was rejected on 19 August 2010.