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Law firm fails in pension liability challenge

4 August 2014

A firm of solicitors has failed in its attempt to challenge a claim to meet a share of the deficit of a pension fund set up to provide for employees and dependants of legal practices.

Paisley firm Pattison & Sim and its two partners were defending a claim for £50,224 by the trustees of the Scottish Solicitors Staff Pension Fund, which went into deficit following the stock market collapse in the early years of this century. They contested whether amending scheme rules of 1980 and 1990, on which the claim was based, had been validly adopted.

The scheme trustees were unable to produce documents establlishing that the three-way approval process required for amendments had been followed, and it appeared that a certain deed referred to in the narrative of subsequent amending documents did not in fact exist, a factor founded on by the defenders as displacing any presumption of regularity in respect of the administration of the fund.

Lord Woolman in the Court of Session however described the defenders' approach as "unduly technical and legalistic". The deeds themselves, he said, "provide the best evidence of what took place". They narrated that the amendments were carried out in accordance with the appropriate procedure, and he saw "no reason to peer behind those clear words... [The defenders' argument that the recitals are mere assertions which require further vouching subverts the purpose of formal deeds".

He continued: "The general rule is that 'deeds in themselves regular and complete must receive effect until reduced'... In this case the remedy of reduction is not available, because.. it is impossible to unwind all the contributions and payments that have been made over the years". The reference in later documents to the non-existent deed was "curious", but did not impact on the earlier deeds. The 1980 and 1990 amending deeds were therefore valid.

The judge added that as the defenders had conducted and settled earlier litigation on the basis that the rules applied, it would be inequitable now to allow them to "reprobate" the 1990 deed – though he ruled against further arguments by the trustees based on personal bar and abuse of process.

Click here to view the judgment.

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