Court maintains pension verdict

Pensioners have spent years campaigning for their pensions

The Appeal Court has upheld a verdict that government maladministration played a role in tens of thousands of workers losing their pensions.

Last year the High Court ruled that government leaflets helped mislead up to 125,000 people whose pension schemes went bust between 1997 and 2005.

The Appeal Court said the government's subsequent appeal was "irrational".

The government may now appeal further to the House of Lords, a suggestion campaigners have called "outrageous".

"We will want to consider this complex and lengthy judgment in more detail with our colleagues in government before deciding whether to pursue an appeal," said a spokesman for the Department of Work and Pensions (DWP).

But Ros Altmann, a leading campaigner for the pensioners involved, was scathing of the government's attitude.

"The secretary of state's appeal against last year's High Court judicial review ruling that 'no reasonable secretary of state could rationally disagree' with the Ombudsman, was dismissed," she said.

He must accept that his department caused injustices which go beyond just financial losses Ros Altmann What the government leaflets said

"In fact, today's verdict is even stronger than last year's High Court ruling.

"The three judges not only confirmed that the secretary of state's rejection of the Parliamentary Ombudsman's findings was irrational and unlawful, but also ruled that he must accept that his department caused injustices which go beyond just financial losses," she added.

Long campaign

The issue revolves around a long campaign to obtain better compensation for members of pension schemes that were closed while insolvent and which then fell under the umbrella of the Financial Assistance Scheme (FAS).

Two years ago, the Parliamentary Ombudsman, Ann Abraham, published a highly critical report on government's role in the saga.

She concluded that the government had published leaflets and other literature that had lulled some scheme trustees and members into a false sense of security over the protection then offered to them by the state.

She recommended that compensation be paid.

Her main finding of maladministration was subsequently upheld in a judicial review in the High Court last year after the government rejected her initial findings and, at first, refused to act on them.

Last December the government finally caved in to pressure and decided that it would, after all, improve substantially the financing and scope of the FAS.

This would bring it much more closely into line with the benefits paid out by the Pension Protection Fund (PPF), which came into operation in April 2005.

That fund already covers members of schemes that have gone bust since 2005.

Appeal findings

The meaning of the Appeal Court's ruling is disputed by the DWP.

The maladministration was not a significant contributory cause of the financial losses suffered by individuals DWP

It acknowledged that the original finding of maladministration, for publishing misleading official information, had been upheld again.

But it said the court had supported its view that "the maladministration was not a significant contributory cause of the financial losses suffered by individuals.

"[It] ruled that some non-financial losses were caused by the maladministration.

"[It] found in the government's favour on the point relating to the Ombudsman's findings not being binding," the DWP claimed.

However Ms Altmann said the government was misreading the ruling.

"The Court did not conclude that no financial losses were caused by maladministration, rather that not all the losses of all the scheme members were caused by it," she said.

As for the Ombudsman's rulings not being binding on ministers, she said: "This only applies to other cases."

"In this case, the ruling made no difference to the outcome in because the Government failed to provide cogent reasons for [its] rejection," she said.

The Ombudsman said she was "still considering the judgement".