Pensioners court costs to be paid

The Work & Pensions Secretary John Hutton told MPs that he would pay the costs of the men's claim so far, plus any appeal costs.

But he said the government itself might go to appeal over the case.

The High Court has ordered the government to reconsider its rejection of findings made by the parliamentary ombudsman in a report on lost pensions.

Last year the ombudsman, Ann Abraham, found that the government was guilty of maladministration, and had caused injustice, by publishing inaccurate and misleading information about the security of occupational pension schemes.

She had called on the government to arrange higher levels of compensation for about 85,000 people.

They had lost all or part of their pension entitlements when their pension schemes were wound up with a deficit, between 1997 and 2005.

Judicial review

The government's refusal to abide with the ombudsman's ruling was challenged by four men, whose claims were heard as test cases in a judicial review at the High Court.

On Wednesday Mr Justice Bean sided with the men, and the ombudsman, and ordered the government to rethink its attitude.

He said it would not be reasonable or rational for ministers to disagree with the ombudsman's main conclusions over maladministration.

However he rejected the idea that the losses suffered by all the tens of thousands of pensioners involved had been caused by the government's misinformation.

Parliamentary statement

Mr Hutton adopted a much more conciliatory attitude than before when he addressed MPs in Parliament.

He said the government had acted in good faith and sympathised with the plight of the pension scheme members.

But he pointed out that the government had not yet decided if it would appeal against the High Court ruling on the one point on which it had lost.

"We have not yet decided the precise grounds for such an appeal," said Mr Hutton.

"It is absolutely right and proper that we take the time to study this judgment and consider its implications in detail."

He also noted that the government was also in the process of reviewing the level of protection offered by the Financial Assistance Scheme.

It has been obliged to do this following an earlier ruling by the European Court of Justice, which had said that up until 2005 the UK's system for protecting pension schemes against insolvency had been inadequate.