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High Court finds against government on occupational pensions

23 February 2007
The High Court has found the government guilty of maladministration for giving misleading advice to employees whose pensions, it assured them, would be secure in their final salary pensions schemes.

Its advice was proved wanting when the occupational pensions schemes of tens of thousands of employees liquidated when their employers went bankrupt, leaving them without mechanisms for obtaining compensation.

Last year, employees affected by the inaccurate government information – much of it provided in leaflet form by the Department for Work and Pensions – took their case to the Financial Ombudsman, which found that the government was culpable of wrongdoing.

The government rejected the Ombudsman's findings and refused to pay compensation.

The employees took their case to the European Court of Justice, and finally, to the High Court where Mr Justice Bean this week ruled that the government's rejection of the Ombudsman's finding against it was "irrational".

Some of the information provided by the government on pensions schemes was "inaccurate and misleading", he ruled.

"This is a fantastic 'David versus Goliath' victory for the pensioners who have fought for justice," the Liberal Democrat pensions spokesman David Laws commented.

The legal victory is expected to magnify pressures on government to compensate victims.

To learn more about occupational pensions, click here.

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