Sheffield v Kier Group Plc & Ors

An appeal from a Pensions Ombudsman determination lies only on a point of law. The Ombudsman’s statutory jurisdiction is confined to disputes actually referred by or on behalf of the complainant. Although the procedure is inquisitorial, that does not permit the Ombudsman to determine a separate dispute which was not referred. The scope of a complaint is determined by a fair reading of the complainant’s documents and the surrounding context.

An appellate court should read an Ombudsman’s reasons broadly and fairly. It should not interfere merely because it might have given different weight to competing factors. A costs direction is within the Ombudsman’s powers, but a decision refusing costs is unlawful only if perverse.

Mr Sheffield, a former coroner and member of the Local Government Pension Scheme, complained to the Pensions Ombudsman about the calculation of interest on pension arrears. The Ombudsman determined that benefits should have been paid from Mr Sheffield’s seventy-fifth birthday and directed a recalculation of the pension and interest on later instalments.

On appeal, Mr Sheffield argued that the Ombudsman lacked jurisdiction to determine the due date of the first payment or the date of his retirement from the scheme, that the costs decision was legally flawed, and that the reasons were inadequate. The central issues were the scope of the reference to the Ombudsman, the standard of appellate review, and the adequacy of the reasons given.

1. Appeal allowed in part. The Ombudsman had misdirected himself that he had jurisdiction to determine the due date for the first payment under regulation 94 of the Local Government Pension Scheme Regulations 1997 and when Mr Sheffield retired from the pension scheme. Those issues had not been referred to him. The appeal therefore succeeded on the misdirection ground.
2. Under section 146 of the Pension Schemes Act 1993, the Ombudsman’s jurisdiction to determine a dispute is statutory and limited to a dispute referred by or on behalf of the actual or potential beneficiary. The inquisitorial nature of the procedure does not enlarge that jurisdiction. Hamar v French and Wakelin v Read supported that conclusion. Hillsdown Holdings plc v Pensions Ombudsman and Police and Crime Commissioner for Greater Manchester v Butterworth concerned points which could have been raised or added in existing proceedings, not an unreferred dispute.
3. A fair reading of Mr Sheffield’s documents showed that he had referred only the question of principle whether interest was payable on later annual pension arrears. He had accepted, for the purposes of his complaint, the calculation of the retirement grant and the first year’s pension. The Ombudsman therefore should not have determined the first due date or the retirement date.
4. The Ombudsman had power to make a costs direction under section 151(2) of the Pension Schemes Act 1993. The judge followed Nicol & Andrew Ltd v Brinkley as a matter of judicial comity, although final determination of the point was unnecessary. The costs decision was not perverse. The Ombudsman had considered the complexity and personal circumstances of the case but was entitled to give greater weight to the availability of free advice and easy access to the Ombudsman’s service.
5. The challenge to the adequacy of the reasons also failed. The Ombudsman had dealt sufficiently with the binding-agreement submission. The estoppel and legitimate-expectation arguments had not been advanced as separate submissions requiring determination. The appeal otherwise failed, and further submissions were directed on the consequential disposal.

This was an appeal to the High Court under section 151(4) of the Pension Schemes Act 1993 from the Pensions Ombudsman’s determination dated 28 September 2018. The appeal was allowed in part on the jurisdictional misdirection ground and dismissed on the costs and reasons grounds.