ITV Plc & Ors v The Pensions Regulator & Anor

A warning notice for a proposed financial support direction must describe the case against the proposed targets frankly and transparently. It is an important procedural protection, but it does not automatically prevent the Pensions Regulator from relying on additional grounds before the Upper Tribunal. The Tribunal must exercise its discretion by weighing all relevant facts and circumstances, including the nature and impact of the new allegations, why they were not raised earlier, prejudice, lost evidence, the parties’ conduct and delay. The inquiry is not confined to whether the matter was previously aired or formed part of the facts before the Determinations Panel. Any inhibition applying to the Regulator will generally apply to a supporting trustee, subject to points raised by a target in its own defence.

The Pensions Regulator issued warning notices to five Granada group companies concerning proposed financial support directions for the Box Clever pension scheme under the Pensions Act 2004. The Determinations Panel decided that it would be reasonable to issue the directions. The targets referred that determination to the Upper Tribunal and applied to strike out additional allegations advanced by the Regulator and the trustee.

The Upper Tribunal dismissed the application, holding that the reference was de novo and that allegations could be raised where they fell within the subject matter of the determination. The targets appealed. The central issue was whether, and on what basis, the Regulator could rely before the Upper Tribunal on grounds not contained in the warning notices.

1. Appeal allowed and matter remitted. The Upper Tribunal’s order was set aside and the targets’ strike-out application was remitted for reconsideration in light of this judgment.
2. A warning notice under the Pensions Act 2004 must effectively describe the bases on which the specified regulatory action is contemplated. The Regulator must act frankly and transparently and cannot withhold part of the case against the targets. This requirement is an important procedural protection.
3. Parliament did not impose a threshold requirement that the Regulator show good reason before advancing additional grounds. The statutory scheme protects targets through the warning notice, the Determinations Panel, statutory conditions and time limits for a financial support direction, the reasonableness requirement, and the Upper Tribunal’s powers on a reference. Sections 103(3)–(5) support a full hearing in which the Tribunal may consider evidence relating to the subject matter of the reference, determine the appropriate action and remit the matter with directions.
4. The Upper Tribunal’s discretion must be exercised by weighing all relevant facts and circumstances. Relevant considerations include the nature and impact of the new allegations, the reasons for delay or omission, prejudice to the targets, lost evidence, information withheld by the targets, the conduct of the Regulator and the delay resulting from the new case. Allegations of fraud or bad faith may require clear pleading and appropriate detail.
5. It is insufficient merely to ask whether an allegation was aired earlier or arose from matters before the Determinations Panel. A trustee supporting the Regulator will generally be subject to the same inhibition as the Regulator. A target may nevertheless raise points in its own defence against a co-target.
6. The Court did not find it necessary to determine the competing authorities under the Financial Services and Markets Act 2000 or the approach in Napp Pharmaceutical Holdings Ltd (No 4).

• Court of Appeal (Civil Division): appeal allowed; the Upper Tribunal’s order was set aside and the matter remitted for reconsideration: [2015] EWCA Civ 228.
• Upper Tribunal (Tax and Chancery Chamber): dismissed the targets’ strike-out application and held that additional allegations could be raised where they fell within the subject matter of the determination. The decision was dated 13 December 2013; no citation is stated in the judgment.