East Lancashire Primary Care Trust v Leach & Anor

This is my extemporary judgment in the matter of an appeal by the East Lancashire Primary Care Trust against a decision of the Pensions Ombudsman, Mr Tony King, dated 30^th March 2012, claim number 2MA30201. The Respondents to the appeal are Mrs Jean Leach and the NHS Pensions Agency. The Appellant, East Lancashire Primary Trust, is represented before me by Mr Giles Powell of counsel. Mrs Leach appears as a litigant in person, with her husband in attendance. NHS Pensions Agency appears by Mr Jonathan Davey of counsel.

On 30^th March 2012 the Pensions Ombudsman released a determination relating to a complaint by Mrs Leach, formerly a mental health officer, concerning information that she had been given in the run-up to her decision to retire early rather than transfer to a new service provider under arrangements to outsource the work then being provided in the Appellant’s learning disability and support learning service. Mrs Leach had been born on 20^th June 1954, and it is common ground that she would have been entitled to retire with enhanced benefits, and no discount from her pension entitlement, upon attaining the age of 55 on 20^th June 2009. Instead, Mrs Leach in fact retired early on 31^st May 2008 rather than moving over to the new outsourced employer.

Her complaint was that her pension had been subject to an actuarial reduction that she was not expecting. She says that the Appellant had not provided her with adequate support or explanation, and that if she had known that she would receive an actuarial reduced pension benefit on early retirement, she would not have retired early, but would have transferred over to the new employer and continued working until she attained age 55.

The short reasons for the Pension Ombudsman’s determination are set out at page 1 of the document which he issued on 30^th March. He refused to uphold the complaint against the Second Respondent, NHS Pensions Agency. He found that they had correctly calculated Mrs Leach’s benefits, based on a normal retirement age of 60, and had not been responsible for the information which she had received being misleading. However, the Pensions Ombudsman upheld the complaint against the Appellant, East Lancashire Primary Care Trust, on the basis that he found that they had provided misleading information, without explanation or support, upon which Mrs Leach had based a decision to retire which was to her disadvantage.

The determination related the material facts at paragraphs 1 through to 24. At paragraph 7, it related that Mrs Leach had been employed by the Appellant in the learning disability and supporting living service, working in a home for users of the service. She had enjoyed mental health officer status under the scheme. Having been born on 20^th June 1954, she would have been entitled to retire with enhanced benefits, and no reduced pension, on 20^th June 2009. As recorded at paragraph 22, she in fact retired on 31^st May 2008, and did not transfer to the new service provider.

Having reproduced part of the employers’ guide at paragraph 25 of his determination, the Pensions Ombudsman proceeded to summarise Mrs Leach’s position at paragraphs 26 through to 37. At paragraph 26, he recorded that she had decided to retire rather than transfer her employment to the private sector after she had received the quotations of which she makes complaint. At paragraphs 38 through to 43, the Pensions Ombudsman summarised the position of NHS Pensions Agency. At paragraphs 44 through to 61, the Pensions Ombudsman summarised the position of the Appellant Primary Care Trust. In particular, paragraphs 59 and 60 of the determination says this:

“59.

Mrs Leach should not be placed in a better position financially than if no mistake had been made and if she had continued in employment. She has in the meantime had the benefit of an accelerated pension, retired from work earlier than she would have done and has not had to pay pension contributions. It would produce a windfall for her if these factors were not taken into account.

60.

If Mrs Leach had issued proceedings in court for breach of contract or negligent misstatement she could have hoped to be compensated by being put into the pension which she would have been in if the relevant contract had been performed or if there had been no negligent misstatement. The law does not provide for damages to be assessed as if the incorrect information had been correct, and following the case of East Sussex County Council v. Barbara Jacobs [2003] EWHC 3323 (Ch), I do not have the power to put Mrs Leach in a more favourable position than she would have been in had she issued proceedings in court.”

There, of course, the Pensions Ombudsman is summarising the submissions of the Appellant Primary Care Trust.

At paragraphs 62 to 65, the Pensions Ombudsman addressed a request by the Appellant Primary Care Trust for an oral hearing, which he said had been made very late in the proceedings, in order to question and explore certain aspects of Mrs Leach’s evidence to the Ombudsman. The conclusion which the Ombudsman reached was that, balancing justice to both parties, the interests of justice would be best served by not holding a hearing at that late stage.

The Pension Ombudsman set out his conclusions at paragraphs 69 through to 79. At paragraph 72 he said that:

“As to the consequences of receiving misleading statements, Mrs Leach retired on 31 May 2008, slightly below the age of 54. She expected to receive benefits that were consistent with those on the quotations. She would have been entitled to an unreduced pension if she had remained an active member of the Scheme until 20^th June 2009. If she had transferred to the new service provider, instead of retiring, she could have remained in the Scheme and retired on an unreduced pension after the age of 55, almost a year later.”

At paragraph 74 the Ombudsman said this:

“In my judgment, Mrs Leach was given misleading information, without support or explanation, based on which she decided not to transfer her employment but to retire instead, and that decision was financially detrimental to her. It is not a matter of NHS East Lancashire failing to advise her of her best course of action (which as I have said, they had no obligation to do.) It is a matter of their failure to provide her with clear and accurate information, which they were obliged to do.”

At paragraph 77 the Ombudsman said that:

“For the reasons given above, I uphold Mrs Leach’s complaint against NHS East Lancashire. I do not uphold it against NHS Pensions, although I do make directions for them to take necessary steps.”

Crucially at paragraph 78 the Ombudsman said this:

“I cannot put Mrs Leach in the position she would have been in (working for an extra year with a pension potentially payable from age 55). But I do not need to go that far because the position that Mrs Leach thought she was accepting and would have been content with is of lower value. The benefits she was quoted were the same as those that would have been payable from age 55. If she had worked to age 55 she would have received higher income up to then than the benefits that she thought would be put into payment. So it is reasonable that she should now be put in the position she expected to be in, of receiving the benefits she believed she would get. By adopting this approach there is no need for me to take account of factors such as the advantage to Mrs Leach of not working or the contributions which she would have had to pay had she continued working for a further year. I emphasise that she will, when my directions are followed, be in a worse position (because that is what she would have settled for) than she would have been had she been given correct and complete information and so stayed in employment to 55.”

The Ombudsman’s directions are set out at paragraphs 80 through to 82. He said this:

“80.

On the basis that Mrs Leach should receive her benefits increased immediately with retrospective effect from 1^st June 2008 as if at that date the amounts had been payable that are shown on the estimates with leaving dates of March and September 2008, I direct NHS Pensions (even though not at fault in the matter) within 28 days of today’s date:

(1)

to calculate the future additional pension that would have been due to Mrs Leach;

(2)

to calculate the supplementary past instalments, including additional cash sum, due to Mrs Leach together with simple interest on such instalments at the base rate for the time being quoted by the reference banks;

(3)

to advise NHS East Lancashire the above calculations.

81.

I direct NHS East Lancashire, within 28 days thereafter:

(i)

to pay Mrs Leach the past instalments and interest by way of a lump sum; and

(ii)

to purchase an annuity for Mrs Leach so as to provide her with supplementary future pension to give her as near as possible the same total pension that she would have had including ancillary and contingent benefits.

82.

Within 28 days of the date of this determination NHS East Lancashire to pay Mrs Leach £300 for the non financial injustice she has suffered.”

East Lancashire Primary Care Trust filed an Appellant’s Notice on 27^th April 2012. The original Respondents were: (1) The Pensions Ombudsman; (2) Mrs Leach; and (3) NHS Pensions Agency.

On 15^th May 2012 the Pensions Ombudsman wrote to the Court noting that the Claimant had named the Pensions Ombudsman as a Respondent to the appeal. The letter continued:

“While the Ombudsman is usually served with Notice of Appeal, following the case of Moore’s (Wallisdown) Limited v. Pensions Ombudsman and others [2002] 1 All ER 737 the Pensions Ombudsman is not a correct Respondent.”

The writer therefore asked for the Court record to be amended to remove the Pensions Ombudsman as a Respondent to the proceedings.

On 18^th May 2012 the Appellant’s solicitors, Hill Dickinson, wrote to the Court confirming their consent to the Pensions Ombudsman being removed as a Respondent to the appeal. That was achieved by paragraph 1 of an order that I made on 19^th June 2012 (which was sealed on 26^th June 2012).

Subsequently, on 22^nd August 2012 the Pensions Ombudsman wrote again to the Court. The letter stated that the Ombudsman did not normally participate in appeal proceedings unless the appeal raised wider questions as to his jurisdiction or powers and the Court either agreed to his participation or so required it.

The letter continued by stating that the Ombudsman considered that the instant appeal did raise a significant general issue for his office. In a letter dated 13^th August, Hill Dickinson, the Appellant’s solicitors, had advised that they would be seeking a direction that, if the matter were remitted to the Pensions Ombudsman, it should be to a different Ombudsman, for fresh consideration. The letter stated that the question of the choice of an adjudicator in the event that the case were remitted was an important question relating to the Ombudsman’s powers and obligations and to the work of his office. He therefore wished to apply under CPR 52.12A for the Court’s leave to be joined as an interested party to the appeal. If granted leave, the Ombudsman would not propose to appear at the hearing, in order to reduce the risk of additional costs being occurred; but he would ask for the following points to be considered by the Court:

“(1)

The purpose of the intervention was to be able to put before the Court facts and matters, and make submissions, relevant to general principles relating to directions that should be given if a case were remitted.

(2)

It was not the Ombudsman’s purpose to address the merits of a particular decision.

(3)

The Ombudsman submitted that if the Court decided that the appeal must be allowed, and the determination set aside, the Court should not give any directions as to the person who should then deal with the matter.

(4)

Section 149(4) of the Pensions Schemes Act 1993 provided that:

‘Subject to any provision made by the rules, the procedure for conducting such an investigation shall be such as the Pensions Ombudsman considers appropriate in the circumstances of the case; and he may, in particular, obtain information from such persons and in such manner, and make such inquiries, as he thinks fit.’

(5)

The rules referred to were the Personal and Occupational Pension Schemes (Pensions Ombudsman) (Procedure) Rules 1995, Statutory Instrument 1995 No. 1053. Nothing in those rules required that where a case was remitted it could not be reconsidered by the person who made the original decision.

(6)

In accordance with the decision in Locabail (UK) Limited v. Bayfield Properties Limited [2000] QB 451, there was no necessary objection to a matter being reconsidered by the person who made the original decision.

(7)

Accordingly, it was a matter of discretion for the Ombudsman to decide how to conduct an investigation, and the Court was therefore requested to leave to the discretion of the Ombudsman, and the Deputy Pensions Ombudsman, the question of by whom the matter should be reconsidered.” (Quote unchecked)

In wishing to participate, and in making those points, the Ombudsman did not seek to act as advocate in his own cause, but merely to provide assistance to the Court. A copy of that letter was provided to the other parties to the appeal, who indicated that they had no objection to the Pensions Ombudsman being joined to the appeal as an interested party. Accordingly, by an order dated 30^th August (and sealed on 4^th September) 2012 His Honour Judge Pelling QC, sitting as a Judge of the High Court, gave permission to the Pensions Ombudsman to intervene in the appeal pursuant to CPR 52.12A and paragraph 17.9 of the Part 52 Practice Direction. As anticipated by the letter, the Pensions Ombudsman has not appeared before me by counsel or other advocate.

A Respondent’s Notice was filed by the Second Respondent, NHS Pensions Agency, on 13^th August 2012. In the original Appellant’s Notice, the Primary Care Trust had sought an order setting aside the Pension Ombudsman’s determination and remitting the matter to the Pensions Ombudsman to be reconsidered afresh and in full. The grounds of appeal were that the Pensions Ombudsman had erred in law and his determination was wrong within CPR 52.11(3)(a) in that: (a) he was said to have applied the wrong measure of damages in law in awarding Mrs Leach the amount stated in the misleading estimates: paragraphs 78 and 80 of the determination. It was said that he should have awarded Mrs Leach damages on the basis that the contract had been lawfully performed, and she had been provided with the correct estimates for early retirement. Alternatively, on the basis that no negligent misstatement had been made and the correct information had been provided: see East Sussex County Council v. Jacobs at paragraph 12 by Blackburne J. (b) It was said that the Pensions Ombudsman had made an award to which Mrs Leach was not entitled within the NHS Pension Scheme, namely a full award on early retirement. It was said that she was only entitled to a reduced award on early retirement before age 55.

In the Respondent’s Notice, NHS Pensions Agency also indicated that it appealed the Pensions Ombudsman’s determination on the basis that he had erred in law, and that his determination was wrong, in that he had applied the wrong measure of damages, and had ordered the payment to Mrs Leach of pension benefits to which she was not entitled under the NHS Pension Scheme. The Second Respondent, too, sought an order setting aside the Pensions Ombudsman’s determination of 30^th March 2012 and remitting the matter to him for reconsideration.

The Respondent’s Notice acknowledged that an extension of time for its filing was required. It was said that the matter had unfortunately not been dealt with expeditiously, due to the pressure of other work. The hearing was not listed until September, and the other parties would not suffer prejudice if the Second Respondent were permitted to file the notice out of time. Acceptance of the Notice would assist the Court in dealing with the case justly.

At the outset of this hearing, and without opposition from either the Appellant or the First Respondent, I extended the Second Respondent’s time for filing a Respondent’s Notice. I did so because there was no prejudice to either the Appellant or the First Respondent. The Respondent’s Notice does not in any way extend the scope of the appeal. It is merely a reflection of the appeal that is already before the Court, at the instance of East Lancashire Primary Care Trust. In those circumstances, it is appropriate that the Second Respondent’s appeal should also be before the Court, and determined at the same time. As I say, that course was not opposed by any party to the appeal, and it causes no prejudice to any of them.

The Appellant’s skeleton argument is dated 10^th May 2012. Essentially it is said that, as set out in the grounds of appeal, the Ombudsman had applied the wrong measure of damages, and that the resulting award and determination were unlawful as being outwith the relevant National Health Service Pension Scheme Regulations. It is said that the Court should dismiss the complaint of Mrs Leach. The determination is fundamentally flawed, and the Pensions Ombudsman’s determination should be set aside. In the alternative, the Court should remit the matter to a fresh Pensions Ombudsman, other than Mr King, for a full and fresh reconsideration. It is said that the determination is so fundamentally flawed that it is neither appropriate, nor proper, for Mr King himself to review it.

Mr Powell addressed me for about 50 minutes. He submitted that the jurisdiction of the Pensions Ombudsman is to rectify acts or omissions constituting maladministration. He submitted that he could not award compensation for the 13 months which Mrs Leach says that she would have worked had she not taken early retirement before the age of 55. It is submitted that all the Pensions Ombudsman could properly do was to consider what a lawful award would have been under the relevant provisions of the applicable pension scheme. What the Pensions Ombudsman in fact did was to disregard the constraints upon his powers, which he had recognised at paragraphs 59 and 60 of his determination; and in so doing he had nullified the combined effect of paragraphs E11 and E35 of the applicable National Health Service Pension Scheme Regulations. Having retired before her normal retirement age of 55, all that Mrs Leach was entitled to was an actuarially reduced pension in accordance with paragraph E51. All the Pensions Ombudsman had the power to do was to make an award on the footing that the appropriate, and correct, information had been provided. Having found maladministration, the Pensions Ombudsman should have made an award which fell within the scope of the Scheme.

Mr Powell acknowledged that the First Respondent might have a freestanding claim for negligent misstatement, or negligent misrepresentation; but that was a claim to be pursued through the law courts, and was not something in respect of which the Pensions Ombudsman could make an award. Mr Powell submitted that the matter should be remitted to the Pensions Ombudsman, but with a direction that it should not be remitted to the author of the original determination, Mr Tony King. Mr Powell took me to what his researches had disclosed was the only case law authority on the principles applicable to the remission of a case to a lower tribunal. That authority is the decision of the Employment Appeal Tribunal, presided over by Burton J, in the case of Sinclair, Roche and Temperley v. Heard, reported at [2004] IRLR 763. In particular, Mr Powell took me to paragraphs 45 and 46 of the Employment Appeal Tribunal’s judgment. Mr Powell laid particular emphasis upon sub-paragraphs 46(4), headed “Totally flawed decision”, and 46(5) “Second bite”. Mr Powell noted that the principles there laid down had been referred to by Dyson LJ, delivering the judgment of the Court of Appeal, in the later case of Barke v. Seetec Business Technology Centre Limited [2005] EWCA Civ 578, at paragraph 31. There, Dyson LJ recorded that in the Sinclair, Roche and Temperley case, Burton J had given comprehensive guidance as to the circumstances in which, when allowing an appeal, it was appropriate for the Employment Appeal Tribunal to remit a case for reconsideration by the Employment Tribunal whose decision had been set aside, rather than to a different Tribunal. Those observations were strictly obiter, since the Court of Appeal was considering the guidance given by the Employment Appeal Tribunal as to the application of what was described as the Burns procedure, relating to the procedure for providing further reasons for an inadequately reasoned, or unreasoned, decision. Nevertheless, I am satisfied that the principles laid down by Burton J in the Sinclair, Roche and Temperley case are apparently the only, and constitute valid, guidance for a court considering whether a matter should be remitted to the original inferior tribunal or to a differently constituted tribunal. Those were the Appellant’s submissions.

I was then addressed by Mr Davey for the Second Respondent for about 30 minutes. Mr Davey emphasised that his client administers the pension scheme on behalf of the National Health Service. Whilst there was no finding of maladministration directed to his client, his client was nevertheless concerned that the matter should be approached in a correct and principled way, and in accordance with the correct principles of law. The Second Respondent agreed with the Appellant that there was an error of law which vitiated the Pensions Ombudsman’s decision in the instant case. He submitted that the Ombudsman could not make an award of a pension outwith the terms of the applicable occupational pension scheme. Where he disagreed with Mr Powell was over whether the Pensions Ombudsman had had jurisdiction to make a final award in a different way. On the issue of whether the matter should be remitted to a different Pensions Ombudsman, Mr Davey made it clear that his client’s position was neutral.

Mr Davey began by taking me to the relevant provisions in s.146(1) of the Pension Scheme Act and s.151(2). He emphasised, by reference to s.146(1), that the Pensions Ombudsman is required to investigate and determine any complaint made to him by a complainant who alleges that he has sustained injustice in consequence of maladministration in connection with any act or omission of the trustees or managers of an occupational pension scheme. By s.151(2), where the Pensions Ombudsman makes a determination, he may direct the trustees or managers of the scheme concerned to take, or refrain from taking, such steps as he may specify in his statement of the determination of the complaint or dispute in question. Mr Davey submitted that what the Pensions Ombudsman could not do was to make an award which gave a pension on the basis of an incorrect piece of information. He submitted that the scheme provided no entitlement to a pension on the basis directed by the Pensions Ombudsman, and therefore he had had no jurisdiction to make the order that he had.

On the issue of what the Pensions Ombudsman could have done, Mr Davey referred me to two previous decisions of the Pensions Ombudsman. The first in point of time, although not in the order in which I was referred to it, was a complaint by Dr S S Graveson v. NHS Pensions Agency K00733. That was a decision of Dr Julian Farrand, as Pensions Ombudsman, dated 30^th August 2001. There I was taken to paragraphs 1 to 8 and 19 through to 27. In particular I was referred to paragraphs 20 through to 22. At paragraph 20, it said that appropriate steps must be directed to achieve redress for the injustice caused by the maladministration, taking into account any measures the complainant took, or could have taken, to mitigate his loss. The Pensions Ombudsman expressly said that it was not open to him simply to order the payment of the pension originally quoted.

The measure of damages for breach of duty to take care to provide accurate information was, in principle, the loss attributable to the inaccuracy of the information which had been suffered by reason of having entered into a transaction on the assumption that the information was correct. In the case of the complainant, the result of the maladministration had been that he was induced to leave his practice prematurely. It was necessary to consider, by way of comparison, the position he would have been in had he been advised of his correct early retirement benefits at the time. On that footing, the Pensions Ombudsman had been satisfied that the complainant would not have retired when he did. In principle, therefore, the complainant’s loss could be quantified as the difference between his assumed earnings between the premature date of retirement and his normal retirement date on his 60^th birthday, including assumed future salary increases had he remained with the practice during that period, together with his anticipated retirement benefits from the scheme and his actual income, save such income as he would have received even if he had remained with the practice. That, of course, was subject to the complainant’s duty to mitigate.

The second decision in point of time was on a complaint by Mr A R Melloday v. Trustees of the Kodak Pension Plan No. 75476/3. That was a decision of the Deputy Pensions Ombudsman, Jane Irvin, dated 12^th October 2010. I was taken to paragraph 10 and paragraphs 13 through to 26. Particular reference was accorded to paragraphs 21 through to 24. There the Deputy Pensions Ombudsman acknowledged that it was not her function to fine trustees or award punitive amounts of compensation. Rather, it was to place an individual in the position that he would have been in had any maladministration not taken place, and to make modest awards to recognise distress and inconvenience suffered.

Having noted that the complainant had asked her to consider the case from a different perspective, suggesting that he was entitled to what he was told he would receive, albeit he was told incorrectly, at paragraph 23 the Deputy Pensions Ombudsman acknowledged that the difficulty for the complainant was that the provision of incorrect information did not of itself create an entitlement to be treated as though the information were correct. The complainant was in receipt of the payments to which he was entitled under the Plan Rules.

Where incorrect information had been given, compensation was said to be aimed at putting the recipient in the position in which he would have been had the correct information instead been given. To put that another way, compensation was not payable on the basis that the incorrect information was treated as correct. In other words, to redress claimed income loss, the Deputy Pensions Ombudsman must conclude that the complainant would have acted differently had he been told that his planned pension at age 65 would be some £3,500 less.

On the basis of those two decisions, Mr Davey submitted that the appropriate questions for the Pensions Ombudsman to have considered would have been whether Mrs Leach had acted to her detriment as a result of the incorrect information, and, if so, what financial loss she could have established as a result. Mr Davey acknowledged that the actual decision contained an error of law. The proper course was to remit the matter to the Pensions Ombudsman; and, as previously stated, he was neutral as to whether it should be a different Pensions Ombudsman from Mr King.

Mrs Leach briefly addressed the Court. She emphasised that she had not received any actuarially reduced statement of her pension entitlement. What she had received were the documents which the Pensions Ombudsman had identified in his determination. She stressed that she would have continued working for a further 13 months had she been provided with the correct information; and she added that, if such work were available, she would have continued working on a part-time basis. She emphasised that, as a result of the incorrect statement of her pension entitlement, her husband, who would otherwise have retired, had had to continue working full-time in order to redress the financial loss which she had suffered in terms of her pension.

In reply, Mr Powell reiterated that the Pensions Ombudsman had applied the wrong measure, and that the matter should be remitted to a different Pensions Ombudsman for a full and fresh reconsideration. He emphasised that this was a case in which the Pensions Ombudsman in his determination had produced a totally flawed decision in terms of remedy. Mr Powell also emphasised that the Pensions Ombudsman had refused an oral hearing in circumstances where there were issues of fact which had clearly called for one. Those issues of fact were first, whether the actuarially reduced quotation had ever been received by Mrs Leach, and, secondly, what would have happened if the incorrect quotations actually provided had not been supplied, but correct quotations had been provided in their place. Those were the submissions

This is, as the parties acknowledge, an appeal limited to issues of law. I am satisfied that, as both counsel submit, the governing authority is the decision of Blackburne J in the case of case of East Sussex County Council v. Jacobs previously cited. I am satisfied that the two Pensions Ombudsmen determinations referred to me by Mr Davey are consistent with Blackburne’s J approach.

The East Sussex County Council case bears some similarity to the instant case. At paragraph 12, Blackburne J accepted the correctness of the submission that it was no part of the Ombudsman’s jurisdiction to put the complainant in a more favourable position than if the complainant had successfully taken the complaint to the courts. If, in the instant case, the complainant had complained of a breach of contract or of a negligent misstatement in breach of a tortious duty of care, she could have hoped to receive compensation by being put into the position in which she would have been if either the relevant contract had been performed - that is to say, she had been told what her correct entitlement was - or there had been no negligent misstatement of her entitlement. In neither event would her damages have been measured by reference to the position in which she would have been if the incorrect information had been correct, which was the effect of the Ombudsman’s award in the instant case.

At paragraph 14, Blackburne J recorded that the purpose of any remedy for maladministration causing injustice should be, as Millett LJ had pointed out, on appeal from an earlier decision of Robert Walker J in the case of Westminster City Council v. Haywood:

“... to provide an appropriate remedy for the injustice found to have been sustained by the complainant.”

At paragraph 15, Blackburne J recorded that the remedy ordered should have been framed with respect to the complainant’s losses as a result of her retiring early. In my judgment, that is the appropriate remedy that should have been afforded to Mrs Leach in the present case. I am satisfied that that was not the basis upon which the Pensions Ombudsman, in the instant case, awarded compensation to Mrs Leach. I am satisfied that his award does disclose an error of law, and to that extent it should be set aside.

Mr Powell submitted that Blackburne J had a second ground for his decision, which was that the Ombudsman could not order the appellant to pay a level of pension benefit exceeding what was permitted under the scheme. At paragraph 16, Blackburne J had acknowledged that the effect of the direction in the case before him had been to require the appellant to make payments in excess of those permitted under the scheme. To that extent, the measure of loss adopted by the Ombudsman had not only gone beyond his own stated aim, but also beyond what it was open to him, in law, in any event to direct.

In my judgment, the function of the Pension Ombudsman is to be distilled from s.146 of the Pension Schemes Act 1993. By sub-section (1), he may investigate and determine any complaint made to him which alleges that the complainant has sustained injustice in consequence of maladministration in connection with any act or omission of the trustees or managers of an occupational pension scheme. By s.151(2), the Pensions Ombudsman may direct the trustees or managers of the scheme concerned to take, or refrain from taking, such steps as he may specify in his written determination. In my judgment, that determination may afford the complainant compensation for the injustice which the Pension Ombudsman finds that he has sustained in consequence of maladministration in connection with the relevant act or omission of the scheme trustees or managers.

In my judgment, as Blackburne J said at paragraph 14, he may provide an appropriate remedy for the injustice found to have been sustained by the complainant. Where that injustice results in the payment of a lesser sum than would have been paid on the basis of the conduct which the complainant would have undertaken, but for the acts of maladministration found by the Pensions Ombudsman, the Pensions Ombudsman’s award can address and correct that.

In my judgment, the approach taken in the two cases before the Pensions Ombudsman and his Deputy is correct. Where incorrect information has been given, compensation should be aimed at putting the recipient in the position in which he or she would have been had the correct information instead been given. In other words, if, as appears to have been the case here, the Pensions Ombudsman is satisfied that, given correct information, the complainant would have delayed retirement, it seems to me that the Pensions Ombudsman is entitled to make an award of compensation on the basis of the pension that would have been payable had the retirement been delayed. In other words, if satisfied that Mrs Leach would indeed have deferred her retirement until age 55, then compensation can properly awarded on the basis of the net income that would have been received until the date of retirement, together with a pension calculated on the basis that the pension would have been payable at age 55. That, however, is not what the Pensions Ombudsman has done in the present case, and the award must therefore be set aside. The matter must be remitted to the Pensions Ombudsman.

It does not seem to me here that I should make any direction as to the precise identity of the particular Pensions Ombudsman to whom the matter should be remitted. I do not consider that this is a case of a totally flawed decision. This is not a case where the first hearing was wholly flawed, or there had been a complete mishandling of it.

I note that, in the case before Burton J, the Employment Appeal Tribunal was satisfied that the case was not one where either bias, or partiality, or prejudgment had been involved, or where there had been a complete mishandling of the case. Like Burton in that case, I am confident that, if the Pensions Ombudsman considers it appropriate for Mr King to continue in the matter, he will approach his renewed task free of preconceptions, and with an open mind, assisted by any available transcript of this extemporary judgment. It seems to me that it would be convenient for the matter to be reconsidered by Mr King if the Pensions Ombudsman considers that it is appropriate for the matter to go back before him.

I accept the reasons advanced by the Pensions Ombudsman in his letter to the Court of 22^nd August 2012. I consider that it should be a matter for the Pensions Ombudsman’s discretion to decide how to conduct the remitted investigation; and it should be left to his discretion as to the identity of the person by whom the matter should be reconsidered.

Those are my reasons for setting aside the existing determination, to the extent I have indicated, and remitting the matter for further consideration by the Pensions Ombudsman. Are there any matters that are unclear in those reasons? [No response.] So the effect is that I am setting aside the Pensions Ombudsman’s decision and remitting the matter to him for him to reconsider what the appropriate measure of compensation is in the matter. In other words, I am not finally determining the matter myself; but I have given him certain guidance, and basically said that he must decide what loss Mrs Leach has suffered as a result of her decision to retire early.