Places for People Pension Trustee Limited v Places for People Group Limited & Ors

A court approving a representative settlement concerning pension scheme benefits must be satisfied that it benefits all represented persons, despite their differing interests. The assessment should focus on whether representatives have rigorously and reasonably advanced the interests affected by each issue. Pragmatic benefits, litigation costs, delay and intermediate outcomes may properly be considered, but a rough compromise which ignores materially stronger issue-specific arguments may be unfair.

Rectification of pension scheme documents requires proof of the relevant parties’ common continuing subjective intention, including the authorised decision-makers of corporate parties. An outward expression of accord is not invariably required. Subsequent conduct, repeated drafting errors, negligent advice and delay may be relevant, although delay alone is not a bar; prejudice remains material.

The claimant trustee sought orders concerning a defined-benefit occupational pension scheme. The proceedings raised validity issues, questions concerning confirmations under Pension Schemes Act 1993, and rectification issues arising from allegedly defective or unintended amendments to scheme documents.

The trustee also sought an issue-by-issue representation order under CPR 19.9 and approval of a negotiated settlement binding on represented stakeholders. The settlement used probabilities assigned to identified junctures, together with rectification of the scheme documents and additional benefits. The central questions were whether representation was permissible, whether the settlement was for the benefit of all represented persons, and whether the proposed rectifications were established.

1. Representation and settlement approval. The claims concerned property subject to a trust and therefore fell within CPR 19.9(1). An issue-by-issue representation order was permissible where stakeholders had the same interest in the particular validity or section 37 issue. The court could proceed on the basis that “claim” included part of a claim, or because the arrangement furthered the overriding objective: Capita ATL Pension Trustees Ltd v Zurkinskas [2010] EWHC 3365 (Ch).
2. Under CPR 19.9(6), the decisive question was whether the settlement was for the benefit of all represented persons. There was no universal requirement for consultation or notification, although some notification would commonly be beneficial. Representatives had to investigate and advance the interests affected by each issue with rigour. A rough split of the difference was inappropriate where stakeholders had different interests and materially stronger arguments on particular issues.
3. The court could nevertheless take account of pragmatic considerations, including the avoidance of costly and uncertain litigation, earlier payment of benefits, savings in legal costs and intermediate outcomes: Capita; Thompson v Fresenius Kabi Ltd [2013] Pens. L.R. 157. The relevant question was whether the settlement fell within a range of reasonable settlements, not whether it was the settlement the court would have selected. The probabilistic model was acceptable because the parties tested dependencies between junctures, addressed statistical and tax issues, considered all stakeholders and adopted a rigorous process. The representation order and settlement were therefore approved.
4. Rectification. The applicable principles were those stated by the Court of Appeal in FSHC Group Holdings Ltd v GLAS Trust Corporation Limited [2019] EWCA Civ 1361. The trustee had to establish a common continuing subjective intention concerning the matter in the instrument which, by mistake, was not reflected in it. For corporate parties, the relevant intention was that of authorised decision-makers. An outward expression of accord was unnecessary in the circumstances of these pension documents.
5. The court could infer unintended drafting effects from the surrounding evidence, including incremental consolidation of documents, subsequent conduct and corrective steps. Negligent advice did not bar rectification. Delay alone was insufficient; the relevant question was prejudice. Although rectification could not be granted merely by consent, the representative beneficiary’s non-opposition after a rigorous process was significant evidence. The evidence established the requisite intention, and the documents were rectified as sought. The representation order, approval order and rectification order were made.