Pensions Casebook - Julian Hanson

This case summary forms part of the Burges Salmon Pensions Regulatory Casebook. We provide analysis including practical considerations and high level commentary

01 October 2021

Commentary / practical considerations

  • In this case TPR issued a prohibition order prevent Mr Hanson from acting as a trustee of any trust scheme in light of his behaviour.
  • This included Mr Hanson’s dishonesty (as found by the judge in High Court proceedings brought against Mr Hanson). Mr Hanson persuaded 245 individual to transfer a total of £13.4m from their pensions schemes. Small amounts were paid to the members but those members largely lost the rest.
  • The determination notice has important practical considerations when considering the role and duty of trustees.
  • This example raises awareness to the fact if other trustees have failed in their duties as severely as this particular trustee has, they will also be prohibited to the same extent. Furthermore, the decision illustrates TPR’s attitude towards protecting member’s savings and insuring individuals do not avoid punishment for their actions.

Case summary

(i) Facts & background: The determination notice follows a High Court decision dated 23 January 2018, where proceedings were brought against Mr Hanson and others by TPR; aiming to recover lost sums from misuse or misappropriation of scheme assets.

  • The case against Mr Hanson claimed he was involved in persuading individuals to transfer their pension pots to schemes established by Mr David Austin.
  • 245 individuals transferred a total of approximately £13.4m into the receiving schemes.
  • These individuals received a small amount of money for transferring their pot, whilst the rest of the money transferred was largely lost.

Mr Hanson’s role in this involved acting as a corporate trustee, which managed Friendly Pensions Retirement Scheme ('FRPF', one of the receiving schemes).

Mr Hanson procured the transfer of £120,000 from FRPF to Broadbridges Consulting Limited, a company owned by Mr Austin.

Broadbridges also paid Mr Hanson £7,000 on the same day that the £120,000 was transferred. The proceedings resulted in Mr Hanson being ordered to pay sums to the newly appointed independent trustee of the impacted schemes.

It was held that Mr Hanson knowingly misused scheme assets, in fraudulent breaches of trust.

(ii) Summary of decision:

  • The Panel determined that Mr Hanson should be prohibited from acting as a trustee of trust schemes in general. When making this decision.
  • The Panel agreed with the Judge’s conclusions regarding the payments made to and from Broadbridges.
  • The judge held this to be dishonest, amounting to a misuse or misappropriation of scheme assets.
  • The Panel also took issue with the nature of the “investment” into Broadbridges, given the lack of diversification and due diligence, a competent trustee would not invest almost all of the schemes assets in such a way.

Analysis

Key legal principles: Section 3(1) PA 95 and schedule 2 PA 04 applied when prohibiting Mr Hanson of his ability to act as a trustee in general.

When deciding whether Mr Hanson was 'fit and proper person', the panel are in effect applying the test set out in section 3(1).

A statement produced by TPR in 2016 named 'the Prohibition Statement' is in accordance with section 3(6) and sets out the criteria of what makes a 'fit and proper person' – honesty, integrity, competence and capability, financial soundness are all considered by TPR. The panel considered these key legal points.

Key words

TPR powers, protection, dishonesty, fit and proper persons, prohibition of trustee

Date 

30 August 2018 

PA04 procedure & reference

Standard procedure (s 96(2)(d)), C112776666/3

 

Key contact

Clive Pugh

Clive Pugh Partner

  • Pensions Regulatory
  • Pensions Services
  • Pensions Legal Advice 

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