Pension Update - Legal Challenge
Steve Trigg, Chair, South Wales Police Federation
This is a very brief overview of the issues affecting the legal challenge to the new Police Pension Scheme known as the CARE (Career Average Revalued Earnings) scheme. It follows a visit I undertook to London in order to seek further information from those involved in the independent legal challenge being organised by officers from Greater Manchester Police.
It is important to understand that the Police Federation of England and Wales is not involved in this legal challenge and is not funding the matter. It is an independent challenge organised by a group of officers who are seeking others to join their group in effectively a class action.
However, we are fully aware of the thirst for information in relation to the legal sustainability of the CARE scheme and we are, therefore, providing this information to hopefully offer you a balanced approach to this very sensitive issue with a view to you choosing a course of action best suited to your circumstances. This should be read in conjunction with the attached documents from the PFEW for a fuller picture.
Background: There can be few officers affected by the changes to the CARE Pension scheme who have not been concerned that they have been subject to this change without prior consultation and, for most, contrary to their wishes.
The Police Federation of England and Wales has published an FAQ document and circulated their view that following legal advice there is no credible avenue to pursue a legal challenge against those changes.
As a result, a group of officers from GMP has organised their own challenge in conjunction with a London based law firm, Leigh Day.
On Monday 12th October, 2015 I travelled to London for a presentation from their QC, Keith Bryant, and the following is a summary of that meeting.
This is not intended as advice on the merits of the claim but is simply a minute of the meeting to hopefully inform the debate.
Merits of Claim: Counsel is convinced that those officers affected have a credible legal challenge based on:
- age (direct discrimination);
- race (indirect).
If a claim succeeds on one of the three elements, the ruling applies to all three.
Potential outcome if the claim is successful: Leigh Day are confident of success based on individual claims through the employment tribunal. They have currently signed 6,000 officers to the action and will issue papers for each. The case(s) are likely to be heard in the London courts.
If the claim succeeds, the potential outcome could be that those officers would be readmitted into their previous pension scheme (either the 1987 scheme or the 2006 scheme) and compensation for ‘injury to feelings’ awarded. What happens after that is really unknown – if the CARE scheme is deemed to be unlawful, we have no way of knowing if the scheme would then be completely discarded, completely rewritten or amended to take account of any legal issues that may have been raised.
Funding: Leigh Day are running the case on a ‘no win no fee’ basis. They estimate the case will take between 3 and 5 years to complete and could easily involve appeals at various stages. At the end of the process, they estimate their costs will be circa £5million.
If the claim is lost, those costs will be borne by Leigh Day who will take insurance to cover this eventuality.
If they win, the legal costs will be shared amongst those officers who have registered as participating members of the action. However, Leigh Day suggested that these costs should be covered by any compensation for ‘injury to feelings’ that officers subsequently receive.
Risks: If those registered with Leigh Day win their case, the ruling wouldn’t necessarily apply to those not registered i.e. the Government could choose to settle on those included on the claim but not the others similarly affected who would have to make claims separately.
It should be noted that should there be any underpayment to the old scheme whilst the legal process is ongoing, such a debt would need to be repaid by the officers should they re-enter their old scheme at the end of the process.
There is a suspicion that should the case fail, the Government may be minded to move those currently enjoying tapered protection immediately into the CARE scheme, thereby losing that tapered protection, or for officers currently ring-fenced to also be moved into the CARE scheme.
Counsel’s position is that the Government could not do that retrospectively and, should they be minded to cease tapered protection or ring fencing, due to the estimated date of case completion, most officers affected would either have completed their tapered protection or retired. However, this is a risk to be considered.
Disclaimer: The preceding information is based on my notes taken during the meeting and my personal observations. They should not be taken as legal or financial advice. Officers should seek further information from the Leigh Day website, the web site of the Police Federation of England and Wales and other web sites such as the South Wales Police Federation web site, the Home Office web site and any other relevant sources of information. Officers should seek independent legal advice if appropriate as well as financial advice from an Independent Financial Advisor before making any decisions which may impact upon their pension entitlement.