Secretary of State for Work and Pensions v Hughes and others

Pensioners from four schemes challenged the legality of a decision of the Pensions Protection Fund as to how it would pay their pensions, and accrued entitlements, in the light of the CJEU ruling in Hampshire v Board of the Pension Protection Fund [2019] ICR 327. 

Giving judgment for the Claimants, Lewis J ruled that: (a) the provisions in the Pensions Act 2004 that capped the amount of compensation payable were unjustified discrimination on grounds of age, contrary to the pensioners’ directly effective rights derived from the EU Charter of Fundamental Rights, as well as being contrary to A1P1 and Article 14 ECHR, such that those primary legislative provisions fell to be disapplied; and (b) that the PPF’s approach failed to accord with Article 8 of the Insolvency Directive because it did not guarantee that each pensioner would receive at least half of the private pension they had contracted for. The judgment also contains important analysis on delay in claims challenging the legality of legislation where private claims arise in parallel.

Following a four-day hearing, the Court of Appeal has now upheld Lewis J’s ruling on the compensation cap. The Court rejected the Secretary of State’s arguments that the capping provisions fell outside the scope of EU law and that the differential treatment on grounds of age to which they give rise was justified. The Court further held that Lewis J had been right to grant an extension of time for the challenge. 

The Court also allowed the PPF’s appeal against Lewis J’s ruling on Article 8.

Tom de la Mare QC and Iain Steele acted for BALPA (the airline pilots union) and pilots from the BMI and Monarch schemes.

The full judgment can be viewed here.