IBM United Kingdom Holdings Ltd & Anor v Dalgleish & Ors

In allocating conduct of a complex pension-scheme appeal, the court should adopt a principled and efficient division of responsibility, taking account of counsel’s prior involvement, overlap between issues, and the practical consequences of the remedies sought. A trustee’s neutral stance does not ordinarily require representation, but that general approach may not apply where the trustee’s role in administering a pension scheme makes its informed and neutral assistance important to the appellate court. The appropriate allocation may therefore require one party to conduct the whole appeal while preserving proper representation for the trustee.

The judgment concerned a disagreement between the representative beneficiaries and the pension-scheme trustee about responsibility for an anticipated appeal and any cross-appeal arising from earlier breach and remedies hearings. The issues included non-pensionable allowances, separation programmes, consultation, exemplary damages and possible changes to an employee-relations policy.

The court had to determine which party should conduct the appeal, whether the trustee should be represented, and how questions concerning the level and cost of representation should be dealt with.

1. Allocation of conduct. The division between the representative beneficiaries conducting breach issues and the trustee conducting remedies issues was undesirable in relation to the non-pensionable allowance issues. Breach and remedy overlapped, and a single team was better placed to present the issues coherently and economically.
2. Conduct of the appeal. Having considered prior involvement, the competing claims of expertise, possible duplication, and the scale of the litigation, the court directed that the representative beneficiaries should have conduct of the entire appeal and any cross-appeal, including the separation-programmes issues and any consultation-related issues.
3. Trustee representation. The general approach stated in BNY Corporate Trustee Service Ltd v Eurosail-UK 2001-3BL plc [2011] EWCA Civ 227, [2011] 1 WLR 2524—that a neutral trustee would not normally need representation, although a note-taker might attend—did not assist. A pension-scheme trustee has different responsibilities from an ordinary settlement trustee. The remedies sought could materially affect administration of the pension plans, so the trustee was entitled to proper representation to ensure that the appellate court was neutrally informed of the practical consequences of possible remedies.
4. Costs and representation level. The appropriate level of the trustee’s representation and the number of lawyers to be instructed by the representative beneficiaries were left for the prospective costs application. The trustee was not confined to a note-taker.

The judgment refers to earlier breach and remedies hearings and to applications for permission to appeal scheduled for a later hearing. It records no appellate decision on the merits.