IN THE MATTER OF THE MOTOR INDUSTRY PENSION PLAN
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Before :
MR JUSTICE ADAM JOHNSON
Between :
ROSS TRUSTEES SERVICES LIMITED (THE CURRENT TRUSTEE OF THE MOTOR INDUSTRY PENSION PLAN) | Claimant |
- and - | |
COMRON ROWE (AS A PROPOSED REPRESENTATIVE DEFENDANT PURSUANT TO CPR PART 19.9) - and - (1) THE SECRETARY OF STATE FOR WORK AND PENSIONS (2) THE BOARD OF THE PENSION PROTECTION FUND | Defendant Interested Parties |
Richard Hitchcock KC and Lydia Seymour KC (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the Claimant
Keith Bryant KC and Philip Stear (instructed by Temple Bright LLP) for the Defendant
David E. Grant KC (instructed jointly by Government Legal Department and Osborne Clarke LLP) for the Interested Parties
Hearing date: 8 July 2026
Approved Judgment
This judgment was handed down remotely at 12pm on 24 July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
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Mr Justice Adam Johnson:
Introduction
At a hearing on 8 July 2026 I heard an application for various orders in these proceedings including an order affirming the terms of a compromise. At the conclusion of the hearing I indicated I would make the orders sought with reasons to follow. These are my reasons.
The Problem
The problem addressed by the compromise concerns the administration of the Motor Industry Pension Plan (“the Plan”). The Plan was established in 1977, but the first definitive Trust Deed and Rules were adopted in 1984 (“the 1984 TDR”).
As its name suggests, the Plan is an industry-wide occupational pension scheme. It has segregated sections for different groups of associated employers.
The problem we are concerned with is about the different treatment of male and female scheme members. It comes about in this way.
The 1984 TDR provided for male and female scheme members to have a different “Pensionable Age”. “Pensionable Age” was defined as follows: “[t]he 65th birthday in the case of males and the 60th birthday in the case of females.”
On 17 May 1990, however, the ECJ in Barber v. Guardian Royal Exchange Group, Case C-262/88, [1991] 1 QB 344, established that it was contrary to Article 119 of the Treaty of Rome for retirement pensions to be payable under an occupational pension scheme from different ages for male and female employees. In common with many other pension schemes, therefore, the Plan had to undergo an exercise of seeking to equalise the Pensionable Ages or Normal Retirement Ages (“NRAs”) of male and female employees. The Trustees of the Plan sought to do this in 1992. A further trust deed and rules were entered into on 13 May 1992 (“the 1992 TDR”). The present issue arises because of certain doubts as to whether the intended equalisation was successfully achieved.
Before describing what happened in 1992, I should also mention that later decisions of the ECJ clarified certain practical points left open by the Barber decision itself. These clarifications are relevant because they help define the scope of the present problem. Three points may be mentioned. First, benefits attributable to service before the date of the Barber decision on 17 May 1990 could continue to be paid in accordance with any express provision made for different NRAs. Second, thereafter it would be lawful for equalisation to take effect by reference to what for some scheme members would be a less favourable NRA for the future than they had enjoyed before – so a scheme could equalise its NRA at 65 rather than 60, for example. Third, however, until a scheme took steps to equalise its NRAs, it would have to be administered from 17 May 1990 onwards on the basis that all employees benefited from the most favourable NRA – which would be 60 in the case of the Plan.
In the present case, it is accepted that on any view, NRAs under the Plan were properly equalised at 65 as from 6 April 1999 by means of a further trust deed and rules dated 5 April 1999 (“the 1999 TDR”). However, the uncertainty about the changes effected in 1992 means there is a question-mark as to the period, starting on 17 May 1990, over which the Trustee of the Plan was bound to administer it in accordance with the third of the principles set out above – i.e., on the basis that all relevant employees benefited from the most favourable NRA. If there was an effective equalisation in 1992, then the period will have ended then; if there was not, then it will have ended later, possibly not until 6 April 1999.
As to what actually occurred in 1992, it is clear that the Plan Trustee at the time intended an equalisation exercise to be conducted. The papers disclosed during the proceedings include a standard form letter from Motor Industry Pensions Limited to all its clients dated 27 March 1992, signed by Fiona M. Goulbourn, Managing Director. This refers to a meeting of the Trustee Board on 5 February 1992, at which it was agreed that all companies in the Plan should have the same pension ages for men and women. The letter then proposes that the “normal pension ages under your scheme will be 65 for men and women”, unless “you advise us of a different policy in your company which will also comply with the Barber case ruling …”. The letter goes on, “[u]nless you have any objections, I will implement the equalisation of pension ages on 1 April 1992”. A later note of 29 April 1992 from Linklaters & Paines, the then advisers to the Plan Trustee, stated the same intention: “A normal retirement age of 65 would apply, unless the employer chooses another age between 65 and 70.”
However, there is some ambiguity as to whether the 1992 TDR achieved these objectives. I can state the point as follows.
The 1992 TDR contain a definition of “Normal Retirement Age”, but it is in the nature of a cross-reference: “‘Normal Retirement Age’ – means the age chosen by the Principal Participating Employer as described in Rule 2.2.”
Rule 2.2 is headed, “Employers’ Choice of Benefits”, but there is a question whether it adequately deals with the position of existing employers under the Plan, as opposed to new employers electing to join the Plan after 13 May 1992. That is because of the introductory wording of Rule 2.2. This reads as follows (together with sub-paragraph (a)) (my emphasis added):
“Where the Employer is a new Principal Participating Employer the Deed of Adherence (or a separate deed) will set out the supplementary rules of the Arrangement applying to all its Employees and those of its Associated Employers (if any) as follows:-
(a) A Normal Retirement Age of 65, unless the Employer chooses another age on or between the Member’s 60th and 75th birthdays (or earlier if acceptable to the Inland Revenue) …”.
One can see the issue clearly: the language of Rule 2.2 deals expressly with the position of new Principal Participating Employers, but does not deal expressly with existing employers whose employees were already accruing benefits under the Plan, on terms including different NRAs for men and women, before 13 May 1992.
The Present Proceedings and the Compromise
The present proceedings are Part 8 proceedings brought by the Trustee of the Plan, who asks to be appointed as representative Claimant. A representative Defendant is also proposed: Mr Comron Rowe, an experienced solicitor with a background in pensions law and practice.
In its original formulation, the Claim Form sought a determination of the date or dates on which the NRAs of relevant scheme members were equalised at 65: was this on 1 April 1992 (the date referenced in the 27 March 1992 letter); or 13 May 1992 (the date of the 1992 TDR); or some other date between 14 May 1992 and 5 April 1999?
Happily, however, negotiations between the legal teams on each side of the debate have resulted in a compromise. The Court is now asked to approve that compromise.
To explain, the two sides of the debate are as follows. On the one hand, there are those parties whose interests would be best served by a finding that there was no effective equalisation of NRAs until April 1999. They are the parties who would benefit from a situation in which the most favourable NRA of 60 continued for as long as possible – including both male and female employees whose benefits would otherwise accrue from 1992 onwards on the basis of a (less favourable) equalised NRA of 65.
On the other hand, there are those parties whose interests would be best served by a finding that there was an effective equalisation of NRAs at a much earlier date. Such parties would include (for example) other scheme members not in employment during the disputed period, who have an interest in the liabilities of the Plan not being increased by the cost of having to service a more favourable provision for those who were.
It would not be appropriate to set out in this Judgment the detail of the negotiations. I have though been given information as to the course the negotiations took. It is clear that they were pursued diligently on both sides, and included detailed input from Leading Counsel on the legal issues in play. In accordance with established practice (see, for example, Capita ATL Pension Trustees Ltd v. Zurkinskas and ors [2010] EWHC 3365 (Ch) at [26]), I have been shown substantial, confidential opinions from counsel on each side, and had the opportunity during the hearing of questioning counsel in private session on matters of particular interest. I thus have no doubt about the genuineness of the process of negotiation the parties have pursued.
The compromise reflects the view that those arguing that there was no effective equalisation in 1992 (i.e., the group described at [17] above) have the better case. This has been characterised as giving rise to a 66:34 “merits split”. In practical terms, it is reflected in an agreement that the Normal Retirement Age of relevant members should be treated as follows:
60 years in respect of any pensionable service from 17 May 1990 to 12 May 1992;
61.7 years in respect of any pensionable service from 13 May 1992 to 5 April 1999; and
65 years in respect of any pensionable service from 6 April 1999.
As to mechanics, these have been discussed with the Plan’s actuarial consultants, AON, who have devised a methodology which will allow the terms of the compromise to be implemented without the need for changes to the underlying administration coding on their system. This will greatly simplify the process of implementation. The Claimant is confident this can be achieved.
The Issues for the Court
Overview
The essential questions for the Court are (1) whether representation orders should be made constituting the proceedings in a manner reflecting the different interests described at [17] and [18] above, and if so (2) whether the Court should approve the settlement the parties have reached.
The legal framework is that in CPR, Rule 19, which deals with representation orders. The matter falls within the Rule because it applies to claims about “property subject to a trust” (Rule 19.9(1)(b)), and the Plan assets are held subject to a trust.
By Rule 19.2(2):
“(2) The court may make an order appointing a person to represent any other person or persons in the claim where the person or persons to be represented –
…
(d) are a class of persons who have the same interest in the claim and -
…
(ii) to appoint a representative would further the overriding objective.”
Special rules apply where a settlement is reached affecting represented parties. These are set out in Rule 19.2(5) and (6):
“(5) The court’s approval is required to settle a claim in which a party is acting as a representative under this rule.
(6) The court may approve a settlement only where it is satisfied that the settlement is for the benefit of all the represented persons.”
Representation Orders
It is now conventional in pension cases for “issue-based” representation orders to be made: that is to say, for representative parties to be appointed to argue for the positions of all those interested in the issues before the Court being resolved in a particular way. This approach was affirmed by Sir Andrew Morritt C in the Zurkinskas decision at [13], and is now described in the current version of the Chancery Guide as “a common feature of most pension claims.”
That is what is proposed here. By means of proposed Re-Amendments to the Claim Form, it is proposed that the Defendant, Mr Rowe, be appointed to represent the interests of all those with an interest in the Court determining the lowest possible NRA for relevant members with effect from 13 May 1992 (i.e., the group described at [17] above); and that the Claimant Trustee be appointed to represent the interests of all those with an interest in the Court determining the highest possible NRA for relevant members from 13 May 1992 (i.e., the group described at [18] above).
Constituted in that manner, it is obvious that the two camps comprise persons who have “the same interest in the claim” (see Rule 19.2(2)(d)). I am also persuaded that appointing the two suggested representatives will further the overriding objective (see Rule 19.2(2)(d)(ii)), because not doing so would create the need for multiple Part 8 applications, thereby “greatly increasing the cost and expense to the benefit of no one” (see again Zurkinskas at [13]).
In light of the above, I will permit the proposed re-amendments to the Claim Form, and will make the representation orders sought. Certain other, ancillary amendments to the Claim Form are also approved.
Should the settlement be approved?
The threshold question posed by Rule 19.9(6) is whether the court is satisfied that the settlement is “for the benefit of all the represented persons”. In a case such as the present where there are two groups of represented persons, the court must be satisfied that the compromise is mutually beneficial, and “[t]hus will need to be persuaded that it strikes a fair balance between the competing arguments” (see Thompson v. Fresenius Kabi Ltd [2013] Pens. L.R. 157, per Briggs J at [17]).
If the threshold is passed, then the court “may” approve the settlement, but is not bound to do so.
As to the threshold question, in the present case I am satisfied that the settlement is mutually beneficial.
In my opinion, the principal benefit for both sides is achieving a speedy outcome which resolves all ongoing uncertainty as to the equalisation issue and thus simplifies the future administration of the Plan, including the distribution of benefits to members.
An important element in the overall assessment of mutual benefit is the so-called merits split, of 66:34 in favour of the arguments advanced by the Defendant, Mr Rowe. As to that, in the Zurkinskas case, Sir Andrew Morritt C accepted that the practice of allocating percentage chances of success to particular arguments was “a permissible method by which to devise a compromise of disputed issues” (see at [25]), but was cautious because of the somewhat crude nature of that type of analysis (see at [24]). I agree, but would approach matters in this case in the following way.
To begin with, the exercise for the court is not the usual one of deciding between competing alternatives. I do not need to decide who is right or wrong, or indeed to express any clear view of my own on the merits; I need to decide only whether the settlement is “for the benefit of” the represented parties.
By definition, neither is achieving the full benefit that would accrue to them if there was a trial and they turned out to be correct in advancing the available arguments on their side of the debate. They are each giving up the chance of complete vindication; but by the same token, they are also each removing the risk that they will turn out to be wrong, with all the consequences (including as to costs) that that would involve. In my opinion, this is the context in which to ask whether the compromise “strikes a fair balance between the competing arguments” (the test stated by Briggs J in Fresenius Kabi, above). The question is whether, in light of the available arguments, the compromise represents a reasonable balancing of risk and reward on both sides.
Having considered the arguments, including with the benefit of the confidential opinions, I am satisfied that the present settlement does strike such a balance. The 66:34 merits split has been arrived at following a period of careful and diligent negotiation involving Leading Counsel on both sides (see above). It is within a range that can properly be described as reasonable. The benefit to the Defendant is that it recognises a merits position which in relative terms is perceived to be stronger than that of the Claimant Trustee, while at the same time removing entirely the risk of fighting on the merits and losing. The benefit to the Claimant is equal and opposite: the settlement removes entirely the risk of fighting on the merits and losing from a position which is perceived to be weaker in relative terms, but with an allowance for the possibility that the result might nonetheless be a positive one.
The other consequences of the settlement are no less valuable. There will be no need for the Part 8 Claim to continue to a full trial and that will save costs and time on both sides. The settlement will promote certainty and provide clarity as to the terms on which the Plan should be administered, and more particularly as to the basis on which members’ historic, current and future entitlements should be calculated. That can begin to happen now, with no further delay. The methodology devised by AON will allow for practical implementation of the compromise in a manner that is known to be achievable, and that should promote the effective and timely distribution of benefits to members.
For all those reasons I am persuaded that the settlement is for the benefit of all represented persons. There are no factors suggesting that the resultant discretion should be exercised against approval. In favour of doing so is the fact that explanatory notes were sent to both relevant employers under the Plan (on 27 or 28 May 2026), and to relevant employees (on 2 June 2026), and as at the date of the hearing, no objections to the proposed compromise had been received. I therefore propose to approve the settlement.
Final Matters
I explained above at [3] that the Plan has a number of segregated sections. A Schedule annexed to the Claim Form identifies some 166 such sections. Of those, some 83 continue to be administered by the Claimant Trustee, but the remainder have either been transferred to the Pension Protection Fund (“PPF”) or have received assistance from the Financial Assistance Scheme and so are administered by the PPF.
To take account of their particular position, the approved Order gives the PPF responsibility for implementing the compromise in relation to these sections of the Plan. The Order also contains special terms which suspend practical implementation for a short period to allow further communication to take place with the members of such sections, and which give the PPF, the Secretary of State for Work and Pensions and the Defendant liberty to apply in relation to matters of implementation for a period of six months.
Conclusion
The Order sought is granted, and the proposed settlement is approved.