Lee Andrew v Royal Devon and Exeter NHS Foundation Trust

The High Court considered an appeal under section 151(4) of the Pension Schemes Act 1993 from a Pensions Ombudsman determination. The Ombudsman had awarded the claimant £1,000 for non-financial loss but rejected his claim for financial loss arising from reliance on an incorrect ill-health retirement estimate. The court considered (i) whether the Ombudsman applied the correct legal test on reliance and causation, and (ii) whether the Ombudsman erred in law in treating the possibility of redeployment as equivalent to the claimant's ability to apply competitively for other posts rather than a potential reasonable-adjustment redeployment.

Key legal principles applied included the limited scope of appeals under s.151(4) (error of law only), the investigatory and discretionary role of the Ombudsman (Webber v Department for Education), and the distinction between reasonable adjustments/redeployment and competitive appointment (Archibald v Fife Council). The court dismissed the challenge to the Ombudsman's reliance/causation reasoning and his refusal to hold an oral hearing, but held that the Ombudsman had made an error of law by equating redeployment under a duty to make reasonable adjustments with the opportunity to apply competitively for other NHS roles. The matter was remitted to the Ombudsman to reconsider causation/financial loss in light of the correct legal approach to redeployment.

Background and parties: The appellant, Mr Andrew, a long-serving specialist orthotic technician employed by the Royal Devon and Exeter NHS Foundation Trust, retired on ill-health grounds on 18 February 2018. He was a member of two pension schemes. In August 2017 the Trust provided an ill-health retirement estimate for the 1995/2008 Scheme based on an overstated pensionable pay figure; the final calculation after retirement showed substantially lower benefits. The appellant complained to the Pensions Ombudsman claiming financial loss and non-financial loss arising from reliance on the incorrect estimate.

Procedural history: The Ombudsman issued a Determination dated 17 December 2021 awarding £1,000 for distress and inconvenience but dismissing the claim for financial loss on the basis that, in the Ombudsman's view, the appellant would in any event have retired because he was incapable of continuing his job (Tier 1 ill-health retirement had been awarded). The appellant obtained permission to appeal to the High Court (HHJ Matthews, permission dated 10 March 2022) and appealed under s.151(4) of the Pension Schemes Act 1993. The appeal was heard by Mr Justice Zacaroli on 17 November 2022 and determined on 28 November 2022.

Nature of the appeal and issues: The appeal raised (i) whether the Ombudsman applied the correct test on reliance and causation (did the claimant rely on the incorrect estimate in a legally effective way and did the error cause financial loss), and (ii) whether the Ombudsman erred by treating the prospect of redeployment as merely the ability to apply for other NHS posts rather than as a potential reasonable adjustment under the Equality Act 2010 (sections 20 and 21).

Court's reasoning and findings: The court emphasised the limited scope of appeals under s.151(4) (error of law) and the investigatory discretion of the Ombudsman. On the reliance/causation point the court concluded that the Ombudsman had considered reliance and causation and that there was an evidential basis for the Ombudsman's conclusion that, given the Tier 1 application and award and the appellant's assessment of his incapacity, it was not irrational to conclude he would not have remained in employment beyond the date he retired. The court therefore dismissed the challenge to that conclusion and the related complaint that an oral hearing should have been held.

On redeployment, however, the court held that the Ombudsman had fallen into error by equating the possibility of the appellant applying competitively for other NHS posts with the distinct legal obligation of an employer to make reasonable adjustments (which can include placing a disabled employee in another post without competitive selection, per Archibald v Fife Council). The Ombudsman had therefore failed to apply the correct legal test when assessing whether the Trust's error caused financial loss by preventing the appellant from seeking or obtaining a redeployment as a reasonable adjustment. The court allowed the appeal on that ground and remitted the question of financial loss to the Ombudsman for reconsideration.

Appeal allowed in part. The court dismissed the challenge to the Ombudsman's conclusion on reliance and causation and his refusal to hold an oral hearing, finding an adequate evidential basis for those conclusions. However, the court held that the Ombudsman erred in law by treating the prospect of redeployment as equivalent to the claimant's ability to apply competitively for other NHS posts rather than as a potential reasonable adjustment under the Equality Act 2010. That error was material and required remittance for reconsideration of whether the claimant suffered financial loss as a result of refraining from seeking redeployment in reliance on the incorrect ill-health retirement estimate.

Permission to appeal to the High Court was granted by HHJ Matthews on 10 March 2022. Appeal under section 151(4) of the Pension Schemes Act 1993 from the Pensions Ombudsman Determination dated 17 December 2021. Heard by Mr Justice Zacaroli on 17 November 2022; judgment handed down 28 November 2022. Neutral citation: [2022] EWHC 2992 (Ch).