Taking the lead – how the Pensions Ombudsman is using its lead case approach in practice

Last summer, we wrote about a series of member complaints relating to the Boots pension scheme that were attracting press attention.  To recap, the complaints related to an assertion by scheme members and their Union that as part of a buy in of benefits with an insurer, the ability for scheme members to draw their pension unreduced from age 60 had been removed.  At this stage the information in the public domain is incomplete, and it is unclear whether the benefit being considered was one members were entitled to as of right prior to the buy in, or whether it was a subject to the exercise of trustee and / or employer discretion.

You can read more about what we know so far about the complaints, which at that stage were being dealt with under the scheme’s Internal Dispute Resolution Procedure (IDRP), in our earlier article.

The Pension Ombudsman’s lead case approach

The complaints have now reached the desk of the Pensions Ombudsman, having failed to reach a resolution through the scheme’s IDRP and in the recent weeks TPO has published a case management update on its website confirming that it will be using its “lead case” approach in relation to the Boots scheme complaints.  You can read the update here and there is also a dedicated page for Boots scheme members to find out more about the lead cases which includes an FAQs section here.

The lead case approach is designed to streamline the process where there is an industry wide issue, or where, as in this case, there is a scheme wide issue affecting a large number of members.  The idea is that a single lead case is accelerated through TPO’s processes, whilst the remainder are left at the IDRP stage, pending the determination in the lead case.  The approach is designed to maximise efficiency in an Ombudsman service that has seen accelerating demand for its services.  TPO has been actively encouraging parties and their advisers to identify cases where a lead case approach could be appropriate and to put forward proposals.

In relation to the Boots scheme dispute, TPO’s information page says:

“There are many hundreds of members affected by this issue who have indicated in some way that they object to the change made in the scheme. 

Lead complaints are an efficient way of dealing with a significant volume of potential complaints of a similar nature relating to the same issue, reducing the time and cost to all parties. Lead complaints can be accelerated through our processes, providing clarity for all parties as early as possible.”

Whilst TPO’s determination in any lead case (or in the case of the Boots scheme, two lead cases) is only binding on the parties to that case, it can be used to inform the trustees’ approach to other IDRP cases in train. 

What about time limits?

As TPO flags on its information page for Boots scheme members, the lead case approach does mean that other members who may wish to complain about the same issues have to be mindful of timescales.  The webpage says: 

“TPO has agreed that it will make an allowance for the time a member’s IDRP complaint is paused whilst the lead complaints are investigated, so that any pause does not prejudice a potential complainant when we are applying our time limits (which are set out in Regulation 5 of The Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996). However, TPO cannot give any assurance concerning time limits in respect of the Limitation Act 1980.”

In most cases, members need to make their application to TPO within 3 years of the event they are complaining about or, if later, 3 years of the date they became aware (or should have become aware) of it.  TPO does have some flexibility to extend the deadline that would otherwise apply – this is found under Regulation 5(3) of the 1996 Regulations (referenced above) which gives TPO discretion to extend the deadline for such period as he considers reasonable, in circumstances where he considers the delay was reasonable.

The final line from TPO’s webpage is worth noting – TPO cannot give any assurance concerning time limits in respect of the Limitation Act 1980.  This relates to bringing a claim in court and the limitation periods that apply there, which could be relevant if the parties do not accept TPO’s determination and wish to appeal the matter to Court.  Parties to any Ombudsman complaint should always be mindful of limitation periods in relation to any future court action (which differ from those for making an Ombudsman complaint) but this could be particularly relevant where a lead case approach is adopted and remaining complaints are held at the IDRP stage (although of course the hope is that the accelerated “lead case” approach will lead to quicker determination of the lead complaint and that in turn informs the IDRP process for other affected members).  Members should identify any relevant limitation periods, and consider whether any protective action is needed, such as putting in place standstill agreements.

Next steps

The information page on TPO’s website advises that there will be two lead cases in the Boots scheme dispute which between them should cover the matters at issue for the majority of the members.  One of those complaints has already been received in mid March (Mr F), the other (Ms A) is expected “shortly”.  At that stage the complaints will be ready to be allocated to an adjudicator.

We will be watching future developments, both in this particular dispute and in relation to TPO's evolving case management approach more broadly, with interest.