England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		27 February 2003

Mr Justice Stanley Burnton:

1. In these proceedings the Claimant seeks an order to quash the decision of the Defendant dated 6 March 2002 finding that the Claimant did not discharge his regulatory duty in providing the Interested Party, Mrs Julie Waring, with financial advice relating to her pension, and that she would not have acted as she did if he had duly discharged that duty. The Ombudsman concluded that it was inappropriate to recommend to her that she should not join her employer's pension scheme. The grounds on which relief is sought, ignoring those no longer pursued on behalf of the Claimant, are:

(a) alleged procedural unfairness on the part of the Ombudsman in reaching his decision;

(b) mistake of fact on the part of the Ombudsman in reaching his decision.

2. The Ombudsman denies any procedural unfairness. He admits that he made a mistake of fact in reaching his decision, but submits that it was immaterial and does not in any event give rise to a right to relief.
3. In opening the Claimant's case, Miss Collier stated that there was a subsidiary ground, namely that when relying on the Pensions Review Guidance referred to below, the Ombudsman failed to take Mrs Waring's particular circumstances into account. It is clear that the Ombudsman did take at least some of Mrs Waring's personal circumstances into account. Miss Collier did not make any separate submissions in relation to this ground, which is also not separately developed in her skeleton argument, and accordingly I do not deal with it.

The regulatory background

4. Prior to 1 December 2001, pursuant to the Financial Services Act 1986 ("the 1986 Act") the financial services industry was, insofar as is relevant, governed by several self-regulatory organisations ("SROs"). In order for persons to practise as financial advisors, they were required to join an SRO and thereby subject themselves to the regulatory scheme operated by that SRO. The Claimant was formerly a member of the Financial Intermediaries, Managers and Brokers Regulatory Association ("FIMBRA"). On 18 July 1994, the PIA took over the regulatory functions of FIMBRA, and the Claimant became a member of it.
5. Pursuant to the 1986 Act, the PIA was required to maintain effective arrangements for the investigation of complaints made against its members. Insofar as is relevant to these proceedings, this function was exercised by the PIA Ombudsman Bureau Limited ("the PIAOB") as a body independent of the PIA. When financial advisors joined the PIA, they were required to submit to the jurisdiction of the PIAOB to consider and adjudicate upon complaints made against them.
6. The regulation of the financial services industry was restructured by the Financial Services and Markets Act 2000. Pursuant to that Act, as of 1 December 2001, the Ombudsman assumed jurisdiction to deal with complaints against members of the former SROs. The Ombudsman thus inherited the jurisdiction previously exercised by the PIAOB.
7. The Financial Services and Markets Act 2000 (Transitional Provisions) (Ombudsman Scheme and Complaints Scheme) Order 2001 ("the 2001 Order") makes provision for complaints that had been made to the PIAOB but had not been determined by the time the Ombudsman assumed jurisdiction for the determination of such complaints. Article 6(2) of the 2001 Order provides:

"A relevant existing complaint is to be determined (so far as practicable) by reference to such criteria as would have applied to the determination of the complaint by the former ombudsman under the former scheme in question immediately before commencement…"

8. The complaint made by Mrs Waring in the present case was received by the PIAOB before, and had not been determined by, 1 December 2001. It is common ground that it was therefore a "relevant existing complaint" within the meaning of articles 1(2) and 2 of the 2001 Order. Accordingly, it fell to be determined by the Ombudsman (so far as practicable) by reference to the criteria that would have applied under the PIAOB scheme.
9. Those criteria were set out in the PIAOB's Terms of Reference. Insofar as is relevant, they provided:

"3.3 The [PIAOB] shall, subject to the other provisions of these Terms of Reference, in his own discretion, decide the procedure to be adopted by him in investigating and considering complaints. He shall act impartially in all respects.

…

3.6 The [PIAOB] shall not be bound by any legal rule of evidence.

…

5.1 If a complaint is not settled or withdrawn by agreement between the parties then the [PIAOB] may, after investigating and considering the complaint, make an award against, or a recommendation to, the firm identified in the complaint. In making any award or recommendation the [PIAOB] shall:

(a) except to the extent that they are inconsistent with the express provisions hereof, observe any applicable enactment, rule of law or relevant judicial authority;

(b) have regard to such statements of general principles of good insurance, investment or marketing practice, rules, codes and guidance as were relevant to the firm's business at the time of the events which gave rise to the subject matter of the complaint;

(c) have regard to any relevant standards of redress as issued by the PIA or by any other SRO as may be relevant to the firm in question.

5.2 Where such general principles, rules, codes, guidance and standards are inconsistent with any enactment, rule of law or judicial authority which would require the complainant to be treated less favourably, the said principles, rules, codes, guidance and standards shall prevail.

5.2A If, in respect of a complaint relating to a pension transaction, the [PIAOB] is satisfied that the firm in question has reviewed the transaction in accordance with the PIA's standards for the review of such transactions (including, if appropriate, making an offer of redress to the complainant) then he shall make no award or recommendation unless he is of the opinion that the particular circumstances of the case are not addressed by the standards."

10. The statements of principles, guidance and the like referred to in paragraphs 5.1 to 5.2A of the PIAOB's Terms of Reference included the PIA's Pensions Review Guidance ("the Guidance"), which was ultimately accepted by the Claimant to be a guide to appropriate practice in 1993 and therefore applicable to the present case. The Guidance was introduced in response to industry-wide pensions mis-selling, which involved financial advisors wrongly recommending that investors purchase personal pension plans (on which financial advisors would have received commission) rather than join or continue as members of their employer's occupational pension schemes (on which financial advisors would not have received commission). The PIA required its members to conduct reviews of pensions advice given between April 1988 and June 1994. Insofar as is relevant to the present case, the Guidance related to cases where investors had opted-out of occupational pension schemes and to cases where it was open to an investor to join such a scheme but he or she had not done so.
11. The Guidance established the procedure for reviews and the standards against which past advice was to be judged. All PIA member firms were expected to be familiar with the Guidance (paragraph 1.03 of the Guidance), which provided a comprehensive guide on how to assess whether advice given to an individual not to join an occupational pension scheme complied with good practice and regulatory requirements and was appropriate in the circumstances.
12. The premise upon which the Guidance operates is that, absent special factors, advice to purchase a personal pension scheme rather than join an occupational pension scheme was inappropriate. One such special factor is "the investor's expectation of early and frequent changes of employment". However, the Guidance makes it clear that, even if such a special factor was present, this alone would not render advice compliant and it would still be necessary to proceed to apply the detailed tests laid down by the Guidance (Guidance, paragraph 03.3(a)-(b)). None of the special factors identified in the Guidance at paragraph 03.3(a) was present in this case.
13. Those detailed tests included a review of whether the member had considered the areas referred to in the guidance as being necessary for a proper comparison between an occupational pension scheme and a personal pension plan, and whether appropriate records had been kept of this exercise (Guidance paragraph 03.3(d)). The "standards to meet" specified included the following statement:

"While the comparison of the (occupational) scheme's costs and benefits with those of the proposed personal pension arrangements … which was presented to the investor might not have been expected to itemise each area in precise detail, some consideration of all of the areas listed would have been vital for a full evaluation of the scheme and a broad comparison with the personal pension plan/Section 226 contract. These should have been carried out at the time of the sale and the information should be on file. Similarly, some quantification of the various benefits – and their cost, if having to be replaced – would have been essential."

14. The areas listed in the guidance include "ancillary benefits (e.g. tax-free cash, life cover, PHI)" and "benefits on leaving service" conferred by a pension scheme or plan. The Guidance states that:

"if no evidence is found of a particular part of the comparison, it needs to be assumed that it was not included. If there is no evidence of key areas being included in the comparison, it is unlikely that it will be possible to demonstrate that the sale was compliant." (Guidance, paragraph 03.3(e))

15. In his decision of 6 March 2002, the Ombudsman referred to provisions of the Guidance that helpfully summarise the obligations of a financial advisor in the present context:

"The advice given should have been based on a sound knowledge of the investor and have been suitable for the investor … did the firm take reasonable steps to gather all the information necessary to give advice to the investor which was suitable … did the firm take reasonable steps to evaluate the information gathered in order that it could give the investor suitable advice … the central issue is whether the advice to acquire a personal pension was suitable advice in the circumstances including the individual's position in relation to the occupational scheme.

…

The firm needs to consider which contributions or benefits associated with membership of the occupational scheme or the personal pension were relevant to the investor and whether sufficient information was gathered to enable a broad comparison of the contributions and benefits as between the occupational and personal pension."

The facts

16. Mrs Waring was born on 8 March 1963. In June 1991 she was made redundant by her employer, Courtaulds Plc. The Defendant is an independent financial advisor in the sense of not being linked to a single pension or life insurance company. Towards the end of 1991, the Defendant advised Mrs Waring to purchase a personal pension plan (a "PPP") with Standard Life through a "section 32 buyout" of her existing pension benefits with the Courtaulds occupational pension scheme ("OPS"). She accepted his advice and contributed £33.33 per month to her PPP.
17. On 28 October 1993, Mr Waring telephoned Mr Green to ask for his advice in relation to his wife's pension arrangements. He told him that she might rejoin Courtaulds. Mr Green made a note of the call then or shortly after. It is apparent that Mr Waring told Mr Green that his wife's employment might be relatively short-term, since the Defendant made calculations appropriate to 2 years' and 3 years' employment. These calculations do not refer to any of the collateral benefits of the Courtaulds OPS other than the death in service benefit. The possible short term of Mrs Waring's proposed employment is reflected in the letter of advice from Mr Green to Mr Waring dated 19 November 1993, which is at the centre of his wife's complaint, and which I therefore set out in full.

"As requested I have considered the following alternatives:-

1. That Julie should join the Courtaulds scheme for 2 or 3 years.

2. Alternatively that Julie contribute to a Personal Pension Plan for 2 or 3 years and then make it paid up. (She could, of course, start contributing at a later stage if appropriate.)

Under the Lautro provisions laid down for providing quotations it is not easy to provide a fully comparable basis which readily facilitates a cost benefit analysis. However I have highlighted below the main points to consider. For the sake of simplicity I have assumed that £83 gross per month would be paid into each scheme for the same period. For the same reason I have also assumed that Julie's salary remains unchanged over the next 3 years.

1. Membership for 2 years

(A) The Courtaulds Scheme: this offers 1/60^th for each year of service. Therefore if Julie left after 2 full years of service she would be entitled to a paid up pension of £900 p.a. This pension would be increased by at least 70% of the rate of inflation. Therefore I have assumed that between now and age 60 the pension would be increased at the rate of 5% per annum. On this basis the estimated pension would be £3,360 p.a. increasing each year depending on the rate of inflation and at the discretion of the trustees. However part of this benefit would relate to SERPS. Julie has already contracted out of SERPS on an individual basis. For someone of Julie's age this is by far the best way to contract out.

(B) A Personal Pension Plan: after paying for 2 years in full the estimated pension fund (assuming 12% p.a. tax free growth) would be £26,400. Under the Lautro basis this would produce a level single life pension of £2,840 p.a. plus SERPS. On the face of it this may not be as good as the Courtaulds Scheme. However one must also consider that the growth rate could be higher than 12% and that the exercise of the open market could boost the pension appreciably, e.g. a with profits annuity would currently boost the pension by 33%. If this annuity fund grew at 12% p.a. this would allow the pension to increase at approximately 5% per annum, i.e. £3,777 increasing plus SERPS.

2. Membership for 3 years

(A) The Courtaulds Scheme: on the same estimated basis the paid up pension after 3 years would be £1,350 p.a. rising to £4,800 p.a. (increasing) less SERPS at age 60.

(B) A Personal Pension Plan: after paying for 3 years in full the estimated pension fund (assuming 12% p.a. tax free growth) would be £45,200. Under the Lautro basis this would produce a level single life pension of £4,870 p.a. plus SERPS. By applying a with profits annuity on the same basis as outlined above the pension would increase to £6,477 p.a. increasing at approximately 5% p.a. plus SERPS.

If Julie were to be a member of the Courtaulds scheme for less than 2 years then on leaving service she would only be entitled to a refund of contributions less a deduction of 20% for tax.

As there seem to be some doubt about the length of time Julie is likely to remain in service the best course of action would appear to be the Personal Pension Plan. She would simply increase her contributions to the existing Standard Life Plan and remain contracted out on an individual basis.

The only other consideration is the fact that membership of the Courtaulds Scheme provides life cover of three times salary. This could be covered elsewhere quite cheaply on a short term basis.

I trust you will find this letter helpful and look forward to hearing from you."

18. It can be seen that the advice made no mention of any maternity benefit or ill-health benefit, of the option to pay additional voluntary contributions ("AVCs") under the Courtaulds scheme, or of the employer's contributions under the OPS. The letter appears to state that the only ancillary benefit under the Courtaulds scheme was life cover. I refer below to the assumption of a growth rate of 12 per cent per annum for the PPP policy, which Mr Green pointed out could be higher (but not that it might be lower).
19. On 13 January 1994, Mr Waring spoke to the Claimant. The Claimant's note of their conversation is as follows:

"Decided not to join Courtaulds scheme – cannot guarantee 2 years. Also wishes to increase contribution. …

Ian (Waring) also asked about State Maternity Benefit in the event that Julie leaves below 2 years service.

…

Ian asked that he receive regular information about performance of Julie's plan – part of review procedure."

20. Standard Life accepted Mrs Waring's pension proposal and she duly paid premiums under it. However she did not leave Courtaulds' employment.
21. Perhaps prompted by publicity given to allegations of pensions mis-selling, by letter to the Claimant dated 22 March 2000 Mr Waring requested a review of Mrs Waring's situation "as per PIA guidelines". The Claimant replied by letter dated 23 March 2000. He protested that at the time of the 1993 advice Mrs Waring was in a "special short term situation…because she only planned to stay with Courtaulds for 2 to 3 years. Until I received your letter I did not know that she was still employed there. If she now plans to stay there for some time then she should join the Company scheme". He pointed out that over the past 5 years average investment growth with Standard Life had been 16.2 per cent per annum. He added: "The PIA Guidelines refer to the mis-selling of personal pension plans. I do not see how this situation can be considered in that category."
22. The Warings were dissatisfied with this response. On 7 September 2000 Mr Waring wrote to the PIAOB seeking advice, stating, "I hope that we have not been given the wrong advice, or not given appropriate ongoing service." The PIAOB sent to the Warings a complaint form which was completed and signed by Mrs Waring. The PIAOB sent copies of the form and of the letter of 7 September 2000 to the Claimant, asking him to arrange for the complaint to be investigated in accordance with Chapter 8 of the PIA's rule book.
23. The Claimant responded to the PIAOB's letter by sending a letter to Mr Waring dated 13 Oct 2000 in which he acknowledged receipt of the complaint. He protested that:

"In reading your letter of complaint it is obvious that you have grossly misrepresented the facts and called into question my professional reputation with both the PIA and another independent financial adviser. Bearing in mind the defamatory remarks you also made to Skandia some months ago, I shall be taking advice on these matters."

Leaving aside the reference to Skandia, with which I am not concerned, this was a wholly inappropriate response to the Warings' understandable concerns. The Claimant expressed the view that the investigation would establish that the complaint was "totally without merit".

24. The Claimant responded substantively to the complaint by letter to Mr Waring dated 8 December 2000. He disputed Mr Waring's statement in his letter of 7 September 2000 that he and his wife were "not experts in this complicated area of finance". He pointed out that Mr Waring had been wrong to inform the PIAOB that his wife had 9 years' continuous service with Courtaulds (in fact she had 7 years'). In relation to the suggestion that incorrect advice had been given in 1993, he stated:

"On 28^th October 1993 you advised that Julie would be going back to work for Courtaulds. However, you stressed that she would only be going back for two to three years. My understanding was that you planned to start a family and therefore your time scale could not be accurate. You sought guidance on what she should do about her pension benefits. It was also a requirement that joining the Courtaulds scheme required a 4% contribution from Julie i.e. £83. I also understand that there was some doubt as to whether or not she wished to increase her gross monthly contribution to £83 and thereafter be committed to a 4% contribution each year.

My letter of November 1993 dealt with your query in detail. The options were set out for consideration, with due regard to the most important fact that Julie was only planning to stay with Courtaulds for 2-3 years i.e. prior to starting a family. Based on the information contained in that letter you and Julie made the decision for her to remain in the Personal Pension Plan. Indeed you telephoned me on 13 January 1994 to say that Julie wished to increase her gross monthly contribution to £83. I asked that this be confirmed in writing. A letter dated 14 January 1994 was duly received. It should be noted that the plan is reviewed each year in January."

The letter also referred to the fact that Mrs Waring's decision to purchase a personal pension plan was based on the information contained in his letter dated 19 November 1993. The Claimant expressed the (erroneous) view that Mrs Waring's case did not fall into the category of pensions mis-selling because Mrs Waring's case was not an opt-out. His conclusions were as follows:

"1. The facts confirm quite clearly that Julie did not opt out of the Courtaulds Pension Scheme in order to take out a Personal Pension Scheme as an alternative to her employer's scheme. She had already left Courtaulds. Furthermore, she has not been in continuous employment with Courtaulds for the last 9 years. Therefore I am perfectly satisfied that the advice given was perfectly valid and correct when the Personal Pension was established.

2. In terms of ongoing advice, an IFA can only act on information received. Communication is a two way process. When you requested advice in November 1993, I went to considerable trouble to outline all the options in light of the very uncertain period of time during which Julie expected to be re-employed at Courtaulds. In the end, you and Julie decided to continue with the Personal Pension Scheme and the contributions were increased."

25. The Warings remained dissatisfied. On 18 January 2001 Mr Waring wrote to the PIAOB asking for "your expert and neutral second opinion". The areas of concern he identified included:

"1. Was it in Julie's best interest not join her company scheme, (Courtauld's), but instead to continue to contribute to a personal pension, even though the actual decided cost to her, (£83 per month) was the same?

…

4. Should we have received a letter from Mr Green asking if we want him to undertake a thorough review as per the P.I.A. guideline Phase 1 & 2?"

26. On 19 March 2001 the PIAOB received a further complaint form from Mrs Waring. The PIAOB sent a copy on to the Claimant and informed him that it would investigate the complaint. The Claimant replied by a 10-page letter dated 13 June 2001 with which he enclosed his client file. He asserted that Mr Waring was "one of the most knowledgeable clients in terms of pensions and life assurance and understanding the importance of investment growth. It was he who initiated the transfer from the Courtaulds scheme when Mrs Waring was made redundant in 1991". He stated:

"When Mrs Waring went back to work for Courtaulds, he understood the needs to question whether or not she should continue contributing to her Personal Pension Plan or join the company scheme. As I understood the position, the decision to continue with the Personal Pension Plan was very much based on the fact that Mrs Waring could not guarantee to stay two years, never mind two or three. This point came out in the discussion about my letter of 19 November 1993. This was because they planned to start a family and whatever time she decided to join the company scheme she would have to guarantee to be able to stay for at least two years. This is just not possible when you are planning a family. Furthermore, Mr and Mrs Waring were not sure whether they could afford the 4% personal contribution."

27. He also stated that:

"Bearing in mind the regular communication and rationale behind Mrs Waring continuing to contribute to her Personal Pension Plan, I did not consider that this situation required the thorough review which Mr Waring now claims should have taken place."

28. Mr Phillip Mansell, an adjudicator of the PIAOB, wrote to the Claimant on 20 June 2001. It is clear that Mr Mansell had carefully examined the correspondence and the file. He asked for the Claimant's response on a number of points:

"I would agree that, if Mrs Waring were definitely not going to be with her employer for a period of more than two years, then the advice to contribute towards a personal pension would not seem inappropriate. However, I note from your letter of 23 March 2000 that 'Julie made her decision to continue with a personal pension because she only planned to stay with Courtaulds for 2-3 years'. This, as I read it, suggests that there was a distinct possibility that, at the time, Mrs Waring would have been with her employer for more than two years. On this basis, please explain why you considered that a personal pension would be more appropriate than joining her employer's scheme.

Expanding on the first sentence of the above paragraph, it could be similarly argued that, should it be inappropriate to join an employer's scheme, it is also not appropriate to effect a personal pension if there appears little prospect of the premium being maintained for more than a very short period, in view of the associated charges. If we assume that Mrs Waring was only to be in employment for a period of less than two years prior to starting a family, please advise why you believe that a personal pension was more appropriate than an alternative savings vehicle (for instance, a deposit account) with lower charges.

I am unable to locate a fact find or other such documentation to support your claim that it was Mrs Waring's wish to start a family in the near future, when the advice was given. The nearest evidence to this that I can find is your letter of 19 November 1993 when you state one of the alternatives is 'that Julie should join the Courtaulds scheme for 2 or 3 years'. As you are aware, Mr Waring states in his letter of 18 January 2001 (originally incorrectly dated) that 'I suggested that 2-3 years was a suitable period for comparison purposes, as she was likely to be there for at least (my emphasis) this long'. There are clearly differing accounts on this issue, and I would ask for your comments on this."

29. On 3 July 2001, the Claimant sent to Mr Mansell a copy of a number of documents, including his note of 13 January 1994 that had been found in a separate file. It noted Mr Waring's question as:

"Is it worth her while joining if she is only going to work there for 2-3 years at most – family?"

Mr Waring challenges the reference to family as a later insertion, but nothing turns on this.

30. The Claimant responded substantively to the letter of 20 June by letter dated 31 July 2001 He stated that the information before him when he advised in 1993 indicated that there was every probability that Mrs Waring would be with Courtaulds for less than 2 years, and he explained why he considered that a personal pension would be more appropriate than joining her employer's scheme. He accepted that he did not complete a contemporaneous fact find, but only the contemporaneous notes referred to above. He took issue with Mr Waring's assertion in earlier correspondence that the anticipated 2-3 year period was taken because of uncertainty as to how her employment would work out: his recollection and notes indicated that the reason for the uncertainty was the Warings' wish to start a family.
31. Mr Mansell communicated his interim decision on Mrs Waring's complaint to the Claimant by letter dated 31 August 2001. He stated:

"I should start by explaining that it is my view (and the view that is expressed in the pensions review guidance) that it is hard to justify advising an individual to acquire a personal pension in favour of their occupational pension scheme. The guidance also lays down the information that should be communicated to the investor when they are being advised not to join an occupational pension scheme, although the imparting of such information in itself would not necessarily make the advice appropriate. Examples of what should be considered include dependant's pensions, early retirement and ill-health pensions, rates of increases in deferment and payment, ancillary benefits and, importantly, employer's contributions. It is further detailed in the guidance that the investor should be given crucial information concerning the recommendation including telling the investor the effect of not receiving the benefit of employer contributions. In this regard, I do not believe that you have demonstrated that the advice has met the compliance requirements of the regulator.

It is, of course, your argument that the advice was given not to join the occupational pension scheme because of Mrs Waring's imminent plans to start a family, and that she would therefore have had no accumulated benefit from the scheme when she ceased employment. I assume, therefore, that it is also your argument that any compliance failings are this immaterial. You will note that Mrs Waring, in her letter of 22 August 2001, refutes that she had any immediate plans to start a family.

I would observe that your position, with regard to Mrs Waring's employment intentions, is somewhat confusing. As I noted in my letter of 20 June 2001, your letter of 23 March 2000 states that 'Julie made her decision to continue with a personal pension because she only planned to stay with Courtaulds for 2-3 years'. However, your letter of 31 July 2001 states that 'there was every probability that, at the time, Mrs Waring would have been with her employer for less than two years'.

In view of the submissions made by both you and Mrs Waring and your respective statements, it is my view that the Ombudsman would not be persuaded that it was apparent that Mrs Waring would be working for Courtaulds for a period of under two years. My view is that, at the time of advice, that there was every possibility Mrs Waring would continue to be working for Courtaulds two years later or that – putting this another way – the evidence available does not indicate that it was probable that Mrs Waring would leave Courtaulds within two years. In this regard, I do not believe that the advice given to Mrs Waring was appropriate nor has it met the required regulatory standard.

My view, therefore, is that Mrs Waring should be compensated for any loss that she has suffered as a result of not joining the Courtaulds pension scheme in 1993. The loss should be calculated with regard to the Pension Review Guidance from the time that you gave the advice to Mrs Waring in 1993 up until the point that Mrs Waring joined the occupational pension scheme."

32. The Claimant did not accept the interim decision and passed the papers to his solicitors. They wrote to Mr Mansell on 19 October 2001. They disputed that the Claimant's advice to the Warings "had failed to meet the compliance requirements of the regulator", stating that "the advice was given to Mrs Waring in a letter dated 19 November 1993 and during a meeting at our client's home. At that meeting, our client provided all the necessary information and explanations required." Apart from the generalisation that "all the necessary information and explanations required" were provided, the letter did not identify the advice given at the meeting (if it went beyond that contained in the letter of 19 November 1993); nor did they give a date for the meeting. There is no note of the meeting on the client file. The letter continued:

"In our view, this matter can be resolved in our clients' favour on the basis of a single issue. That issue is, when Mrs Waring asked for advice from our client, she said (through her husband or directly) that she only planned to stay with Courtaulds for two or three years. As that was her stated intention, then on any view, the advice must have been correct."

33. The letter set out the basis for the "issue" (in fact, a contention) being well-founded, and concluded:

"We trust this deals with the matter sufficiently. If it does not, we will make further representations."

34. On 16 November 2001, Mr Mansell enquired of the trustees of the Courtaulds pension scheme what in 1993 had been the options given to scheme members who left service prior to completion of 2 years' service, whether the scheme had provision for ill health pensions to be paid, and if so what, and whether the scheme granted allowances for continuous service to be credited to employees who left employment and rejoined, or who took maternity leave.
35. In a letter to Mr Mansell dated 29 November 2001, the Warings again took issue with the Claimant's case that the reason for the uncertainty as to the period of Mrs Waring's employment was their intention to start a family.
36. On 19 December 2001, Mr Mansell sent to the Claimant's solicitors a copy of a letter he had received from the Courtaulds pension scheme administrators, setting out the entitlements of members leaving service within 2 years of joining, of members retiring through ill-health and the position in relation to maternity leave. With regard to those leaving service within 2 years, it stated:

"Members leaving service within 2 years of joining are entitled to either a refund of contributions or a transfer to another pension provider. The transfer value would be made up of the member's contributions plus interest, plus the company's share of the Contributions Equivalent Premium."

Mr Mansell also enclosed a copy of the Warings' letter of 29 November 2001. He said:

"My view remains that your client should compensate Mrs Waring, in accordance with the regulator's guidance, for the period that she was not part of the Courtaulds scheme."

He then referred to the transfer to Standard Life, a matter that is not the subject of these proceedings, and continued:

"I would therefore ask for your further representations before I pass the papers back to the Ombudsman."

37. The Claimant's solicitors sent a long letter dated 1 February 2002 in response to Mr Mansell's letter of 19 December 2001, making representations concerning the question of pension transfer to Standard Life and the issues relating to Mrs Waring's non-joinder of the Courtaulds OPS. Their position remained that the principal, if not the only, issue was that Mrs Waring intended to stay at Courtaulds for 2 or 3 years and as such the Claimant's advice must have been correct. The letter concluded:

"We trust that the above is enough to cause you to reach a conclusion that the Warings' complaint is unsubstantiated and that our client's version of events is to be preferred. In the event that you require further information from us, please contact us …."

38. On 6 March 2002, the Ombudsman issued his decision. He stated:

"This case raises various issues which I must consider. Firstly, I must determine whether or not adequate information was given to Mrs Waring as part of the advice so that she was able to make a fully informed decision. Secondly, I must consider the argument raised by Green Denman & Co. that it was Mrs Waring's imminent intention to start a family, thus any membership of an occupational scheme would have not accrued any worthwhile benefit. Essentially, I must decide whether Mrs Waring has satisfied me that the advice was inappropriate and if inappropriate I must decide whether Mrs Waring would have acted any differently if the advice had been appropriate."

He referred to the Pension Review Guidance, and continued:

"The evidence in this case satisfies me that the conduct of Green Denman could not properly be regarded as satisfying the tests imposed by the Review.

I turn now to the matter of Mrs Waring's future plans at the time of the advice. Green Denman & Co. have argued that it was Mrs Waring's intentions to shortly start a family, and this is why she was recommended the personal pension. I am satisfied by the evidence in this case that compliant advice would have been to recommend that Mrs Waring join the Courtaulds Scheme. It would appear that Mrs Waring contemplated working at Courtaulds for two to three years and then commencing a family but that she could not in the terms of the contemporaneous note of 13 January 1994 guarantee that she would not leave Courtaulds before the expiry of 2 years. During membership of Courtaulds Scheme Mrs Waring would benefit from the protection afforded by the scheme if she were forced to retire from employment by reason of serious ill health. If, despite commencing a family, Mrs Waring had decided to return to the employment of Courtaulds following maternity leave then she would have secured the benefit of scheme membership (i.e. qualifying service) being maintained during the period of her maternity leave. Further a transfer value would be granted under the scheme rules if service did not exceed two years, a value which would not only be made up of the members contributions plus interest but also benefit from the company's share of the contributions equivalent to premiums. If Mrs Waring had left Courtaulds after 1 to 2 years service, as suggested as possible by Green Denman, then by reason of the inevitably substantial set up costs of the personal pension the paid up value of the pension contract would likely to have represented only a modest percentage of her contributions to the pension. If Mrs Waring wished to make contributions over and above those required of the company scheme then she would most advantageously have made those additional contributions to the company's in house AVC scheme rather than to a personal pension. Conversely I am not persuaded that the company pension was unsuitable because contributions to it would have had to have increased with salary increases since clearly an increase in salary would in absolute terms represent a very much larger sum than the required contributions increase and thus should be affordable from the first amount. Evidence has been given by the Warings that they had considerable savings at the time.

Finally I understand that membership of the scheme provided life cover three times salary.

It is, therefore, my finding that Green Denman & Co did not discharge its regulatory duty in providing Mrs Waring with financial advice, and that Mrs Waring would not have as acted as she did had they done so. My view is that it was inappropriate to recommend to Mrs Waring that she should not join her employer's scheme.

I therefore order Green Denman & Co to perform a loss assessment in respect of the time when Mrs Waring was not a member of the occupational pension scheme, in accordance with the Pensions Review Guidance, for the period from 1 January 1994 (which as best as I can judge might have been the earliest date from which Mrs Waring could have been expected to commence participation in the company scheme) to the date that Mrs Waring did eventually join the scheme. If a loss is revealed then I direct that redress should be made in accordance with the Guidance. If any unresolved issue arises in respect of loss or redress then, subject to our Rules, that issue may be referred to us."

The issues on fairness

39. It was common ground, and indeed indisputable, that the Ombudsman has a duty to act fairly in arriving at his decision. The issue in this case is whether the requirements of fairness were complied with.
40. It was also common ground that the requirements of fairness vary from case to case, depending on the context and the particular facts. However, a party to a dispute is entitled to know what are the areas of concern which he should address.
41. In some contexts, it is unfair for a decision maker to go beyond the points put forward by the complainant. In litigation before the courts, for example, the issues are normally defined in the parties' pleadings, and the court will not normally decide the case on a point that has not been raised in the pleadings (although they may be amended to raise an issue suggested by the court if no unfairness results). The present context is very different. Most complainants are insufficiently versed in the complexities of the subject, and would be unable unassisted to assess whether the advice they were given was sound or inadequate. It is for that reason that they turn to financial advisers for advice; it is because their relative ignorance renders them vulnerable that financial advisors are regulated; it is for that reason that financial advisors were required to review their pensions advice; and it is to provide an informal but informed adjudicator that the financial ombudsman scheme was established. It cannot therefore be contended that the ombudsman acts unfairly if he decides against a respondent on the basis of a comparison of the rival pension schemes that the complainant did not make.
42. The Claimant's case on unfairness is essentially that the Ombudsman did not convey to him or to his solicitors that he was concerned that the Claimant's advice to Mrs Waring was non-compliant and inappropriate by reason of the provisions of the Courtaulds scheme as to ill-health retirement protection, the potential in the event of a return to work following maternity leave, the transfer value of benefits in the event that service did not exceed 2 years, and the availability of the Courtaulds AVC scheme. The Claimant contends that if he had appreciated that these matters were of concern, he would have made further submissions to the Ombudsman that might have affected his decision. For the purpose of the present proceedings, the Ombudsman accepts that there were representations that the Claimant might have put forward that were material to his decision. He also accepts, as he must, that the Claimant and his solicitors were not specifically asked to address these aspects of the Courtaulds scheme. The Ombudsman's case is that the Claimant was or should have been aware that these aspects of the Courtaulds scheme needed to be addressed by him or his solicitors in their submissions to him before he reached his decision.
43. There are two requirements of financial advice that have to be considered in the present context: compliance and appropriateness. Advice is compliant if it complies with regulatory requirements as to procedure and content: for example, if the requisite information on the investor is obtained and recorded, and an analysis and quantified comparison of the benefits and disadvantages of the rival financial products is made and recorded in writing. Advice is appropriate if it is the correct advice for the particular investor. These two requirements are obviously interdependent. A principal object of the compliance requirements of the regulator is to ensure that the financial advisor is sufficiently informed as to be able to give appropriate advice. If, for example, the financial advisor has not obtained relevant information concerning the investor and does not properly compare the available financial products, and explain their relative merits and demerits to the investor, his advice as to which is better for the investor is liable to be inappropriate. The other purpose of compliance is to ensure that sufficient information is given to the investor to enable him to make an informed decision.
44. However, even if his advice is not compliant, it may be appropriate. If, for example, there are only two similar products available, the advisor may have a reasonable chance that his advice as to which is preferable will be appropriate. In the present context, most advice to enter into an OPS rather than take a PPP would be appropriate, even if the advisor had not complied with regulatory requirements before giving the advice. In general, a client will not be entitled to compensation unless he acted on advice that was inappropriate. The fact that the advice was not compliant may be the reason for its being inappropriate, but if a financial advisor whose inquiries and procedures are not compliant by good fortune gives appropriate advice which the client accepts, the client will not normally have suffered loss.
45. It is not suggested that the Ombudsman was not entitled to find that Mrs Waring envisaged working for Courtaulds for 2 to 3 years. Even if the Claimant's explanation of the shortness of the period is accepted, i.e. that Mrs Waring and her husband planned to start a family, it is evident that although there was a possibility of her leaving her employment within the 2 year period, there was also a possibility that she might not become pregnant even within a period of 3 years.
46. In assessing the fairness of the Ombudsman's procedure and decision, I accept Mr Moffett's submission that it was appropriate for him to assume that Mr Green and his solicitors knew of the content of the Guidance. Mr Green had been a member of FIMBRA and of the PIA and held himself out to be a financial adviser. As such, he was required to be familiar with the Guidance. His solicitors could not and certainly should not have represented him unless they too were familiar with the relevant regulatory provisions including the Guidance.
47. Mr Mansell's interim decision of 31 August 2001 made it clear that he considered that the Claimant's advice had been neither compliant nor appropriate. Given the paucity of the Claimant's documentation, which does not include a sufficient analysis of the aspects of the Courtaulds scheme that he was required to consider or of the personal position of Mrs Waring, the finding that the advice was not compliant was inevitable.
48. The Claimant's solicitors responded to the interim decision in their letter of 19 October 2001 dismissively. They did not seek to address the requirements of the Guidance. They addressed only the issue of the appropriateness of the advice.
49. Mr Mansell, in his letter of 19 December 2001, maintained his view that the Claimant should compensate Mrs Waring. It was implicit in that view that he considered the advice given to her to have been not only non-compliant, but also inappropriate. If the Ombudsman agreed with that view, it would follow that, assuming that Mrs Waring acted on that advice (and the contrary is not suggested), he would conclude that the Claimant should compensate her. In order to address the appropriateness of the advice given by the Claimant to Mrs Waring, it was necessary to consider those aspects of the Courtaulds scheme, such as ancillary benefits, which were relevant to the appropriateness of the advice. The letter from Courtaulds enclosed by Mr Mansell contained information as to such matters, which were clearly relevant to a comparison of the OPS with a PPP, whether or not they were specifically mentioned in the Guidance, and had to be taken into account in any further representations on behalf of the Claimant. When, at the end of his letter, Mr Mansell asked for the Claimant's solicitors' further representations before he passed the papers back to the Ombudsman, it should have been clear to the Claimant and his solicitors that they should address the issue of appropriateness, and in doing so address the provisions of the Courtaulds scheme relevant to appropriateness, before the Ombudsman made his decision.
50. In his first witness statement, the Claimant refers to the letter from Courtaulds pension scheme administration, and states:

"In the light of the recent correspondence that had taken place, my lawyers and I presumed that the purpose of this letter was to confirm the benefits available before and after two years service had been reached and therefore test the advice I had given."

That being the case, it was for the Claimant and his solicitors to justify his advice in the light of the information in the Courtaulds letter as to the benefits of their OPS. It is difficult to see what the point of sending the Courtaulds letter to the Claimant's solicitors was if not to obtain their client's case in the light of its contents. The Claimant's solicitors did not address the benefits mentioned in the Courtaulds letter in their further representations. The reason given by the Claimant is that neither he nor Mrs Waring was asked to comment upon it. That is not so as far as the Claimant is concerned. The letter of 19 December 2001 expressly asked for the Claimant's solicitors' further representations. I am unable to accept Miss Collier's submission that that request was limited to the question of the transfer to Standard Life: Mr Mansell's reiteration of his view that the Claimant should compensate Mrs Waring for the period that she was not part of the Courtaulds scheme made it clear that representations on his behalf had to address the appropriateness of the advice in December 1993. All of the matters referred to in the Courtaulds letter were relevant to the comparison required by the Guidance, and to the appropriateness of the advice. I do not accept that it was necessary for Mr Mansell or the Ombudsman to identify each benefit that was relevant and ask for comment on it: the relevance of each of them was apparent. I similarly do not accept the submission on behalf of the Claimant that it was unfair to require him to address all of the benefits of the Courtaulds scheme. That is precisely what was required of a financial advisor when advising his client and when carrying out a review of advice previously given. If, therefore, the Claimant's solicitors did not address the benefits of the Courtaulds scheme in their further representations, the Ombudsman was entitled to assume that they had chosen not to do so.

51. The Claimant's solicitors' 7-page letter of 1 February 2002 appeared to be a comprehensive statement of the Claimant's case, and the Ombudsman was entitled to treat it as such, notwithstanding the penultimate sentence of the letter, which did not indicate that there were further matters on which the Claimant wished to make representations.
52. In these circumstances, the Ombudsman was entitled to proceed to make his decision. In my judgment, there was no unfairness in his deciding the matter on the basis that he did. He was entitled to find that the Defendant's advice had been inappropriate. Given that Mrs Waring had accepted the Defendant's 1993 advice, and there was nothing to show that she was a client who would have rejected advice to join the Courtaulds OPS, he was entitled to find that the giving of inappropriate advice had caused her loss as referred to in his decision letter.
53. In paragraph 24 of his first witness statement, Mr Prior, the Ombudsman, referred to Mr Green's assumption in his letter of 19 November 1993 of "an imprudently high growth rate for the PPP" and to his mention of the advantage of the purchase of a with profits annuity with the PPP fund. I read this passage of his statement as being a comment on Mr Green's witness statement, and thus a retrospective justification of his decision, rather than contemporaneous reasons for his decision. The matters to which he referred (the first of which is contentious) were not mentioned in the decision itself. I have therefore ignored them.

Mistake of fact

54. In giving his reasons for his decision, the Ombudsman stated:

"… a transfer value would be granted under the scheme rules if service did not exceed two years, a value which would not only be made up of the members contributions plus interest but also benefit from the company's share of the contributions equivalent to premiums."

55. In his first witness statement, Mr Prior accepted that when he made that statement, when he referred to "the company's share of the contributions equivalent to premiums" he was under the mistaken belief that Mrs Waring could benefit from Courtaulds both making good the reduced national insurance contributions paid by reason of her membership of their contracted-out scheme and paying an added sum representing the time value to the company of the contributions which had not been paid in full. He accepted that there was in fact no such added sum. He added:

"However, even if I had been aware of my error it would have made no difference to my decision which was based on my assessment that it was probable that Mrs Waring would be employed for more than 2 years."

56. In his second witness statement, Mr Prior enlarged on his error. He said he did not quantify the "time value" element at the time of his decision, but attributed only a modest value to it, i.e. a couple of hundred pounds.
57. The reference in the decision letter to "contributions equivalent to premiums" was an error for contributions equivalent premium ("CEP"), which is made up of the National Insurance contributions which would have been paid by the employee and by the employer if the employee had not been a member of the OPS.
58. Two issues arise under this head: whether Mr Prior's mistake was material to his decision, and whether, if it was, his mistake, being one of fact, renders his decision liable to be quashed.
59. Miss Collier accepts that an immaterial error of fact cannot justify judicial review. She submits that the onus of establishing immateriality is on the Defendant, and subject to the wider question of principle I consider that this submission is correct. She further submits that the decision maker must establish clearly that his error was immaterial if the Court is to treat it as such.
60. The question to what extent error of a non-jurisdictional fact is a separate ground for judicial review is not settled. The court cannot quash a decision of an inferior tribunal (and the Ombudsman is in effect a tribunal) merely because it considers that a finding of fact by the inferior tribunal was incorrect, or because (to give an example relevant to the present case) on the evidence before it the Court would have made a different assessment of the respective merits of two pension schemes: if a court of review were to do so, it would constitute itself a court of appeal on issues of fact. I was referred to the well-known authorities on the question, including the speech of Lord Slynn in R (Alconbury) Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] UKHL 23, [2001] 2 WLR 1389 at paragraph 53 and that of Lord Nolan at paragraph 61, to the judgments of Brooke LJ and Steel J in Adan v Newham LBC [2001] EWCA Civ 1916 at paragraphs 41 and 86 respectively, and to the judgment of Waller LJ in R (McLellan) v Bracknell Forest Borough Council [2001] EWCA Civ 1510. To those authorities must be added the speech of Lord Bingham in Begum v London Borough of Tower Hamlets [2003] UKHL 5 at paragraph 7, in which he stated that a decision is liable to be quashed "if the decision-maker is shown to have misunderstood or been ignorant of an established and relevant fact". In some cases, the question can be circumvented by a finding that there was no evidence to support the finding of fact (the ground of review referred to by Lord Nolan in Alconbury), or by a finding that the decision maker took into account an irrelevant fact. It is not clear that the present case can be accommodated under either of these heads of judicial review. There was evidence that the transfer value for members leaving the Courtaulds scheme within 2 years of joining included the company's share of the CEP, namely the Courtaulds letter of 20 November 2002. That the company's share of the CEP was included in the transfer value was a legally relevant fact. The error in the present case was as to what was included in the company's share of the CEP. But the Ombudsman's error would fall within Lord Bingham's statement of the law if it were material.
61. However, I am satisfied that the Ombudsman's error was immaterial. His evidence is that it was immaterial for two reasons. First, he based his decision on the probability that Mrs Waring would be employed for more than 2 years. I have already stated that he was entitled to come to make that finding. It is clear from his decision that the error related to his assessment of transfer value if Mrs Waring left Courtaulds within 2 years of joining. Secondly, in quantitative terms his error was negligible. It related to a percentage (time value) of a minor constituent of the transfer value. Mr Prior puts the value at only a couple of hundred pounds. In relative terms, it was small and could not have affected his decision.

Determination

62. For the reasons set out above, the claim for judicial review will be dismissed.
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MR JUSTICE STANLEY BURNTON: My judgment in this case has been distributed in draft. I would like to express my gratitude to counsel for their suggested corrections. For the reasons set out in the judgment, copies of which are now available to the parties, their legal representatives, the press and the public, the claim will be dismissed.

MISS WINDLE: My Lord, the respondent does not appear to have a representative here. The claimant wishes to apply for permission to appeal. I am not quite sure what you might wish to do about costs.

MR JUSTICE STANLEY BURNTON: No-one here for the defendant at all?

MISS WINDLE: The defendant's solicitor is here I understand, my Lord, but no counsel.

MR JUSTICE STANLEY BURNTON: Who is the solicitor?

DEFENDANT'S SOLICITOR: That is me.

MR JUSTICE STANLEY BURNTON: Were you expecting counsel to be here?

DEFENDANT'S SOLICITOR: I was, yes. I am from the Financial Ombudsman service. I am one of the solicitors there.

MR JUSTICE STANLEY BURNTON: What do you want to do?

DEFENDANT'S SOLICITOR: We would like to ask for our costs?

MR JUSTICE STANLEY BURNTON: Why are you not represented?

DEFENDANT'S SOLICITOR: I do not know. I came straight from the office and I did not know counsel was not attending. I do not know why he is not here.

MR JUSTICE STANLEY BURNTON: Do you have any objection to my dealing with costs on this basis?

MISS WINDLE: My Lord, we do not agree to the defendant's costs schedule because we feel that the claimant should have costs arising from the adjournment and the extra evidence. We should not have to pay the defendant's costs of those and should, indeed, get their own costs arising from that adjournment occasioned by the defendant.

MR JUSTICE STANLEY BURNTON: What I am going to do is put this back until 20 past 10 so that the lady who is here from the Financial Ombudsman Service can find out what has happened to her counsel, and if he or she gets over fast enough perhaps you can discuss the disputed items and I shall hear you then. If he is not here and the case is not in a position to proceed, we will discuss what to do and there may be costs consequences in relation to that.

Short Adjournment

MR MOFFETT: My Lord, can I please offer my apologies for not being here at 10 o'clock. I understand your Lordship came to court. Unfortunately I understood the matter was to come on at 25 past 10. I do not know where the confusion arose, but I do apologise for keeping your Lordship waiting.

MR JUSTICE STANLEY BURNTON: It is a very curious time for anything -- 25 past 10 -- the listing shows 10 o'clock.

MR MOFFETT: I understand that is when we were informed by the court offices, my Lord. I am very sorry, my diary said it was 25 past.

MR JUSTICE STANLEY BURNTON: Your clerk knew it was at 10 o'clock.

MR MOFFETT: He may well have done, my Lord. All I can say in my defence is that in my diary, on the computer, it says 25 past. I do offer my sincerest apologies.

MR JUSTICE STANLEY BURNTON: There we are. Right, judgment has been handed down.

MR MOFFETT: In the light of that we would simply ask for an order that the claimant pays the defendant's costs.

MR JUSTICE STANLEY BURNTON: There is an issue as to costs, have you been told about that?

MR MOFFETT: Yes, I have, my Lord.

MISS WINDLE: My Lord, the claimant seeks the costs arising from the adjournment which the defendant needed in order to put in extra witness statements as to the mistake of fact. The claimant contents that those --

MR JUSTICE STANLEY BURNTON: When you say the adjournment, which adjournment are you referring to?

MISS WINDLE: My Lord, I am having some difficulties here because I was not instructed in the original case.

MR JUSTICE STANLEY BURNTON: As far as I was concerned, there was just one hearing and there was another witness statement -- in fact two witness statements and written representations were put in.

MISS WINDLE: My Lord, yes. I understand there was some extra evidence that was put in after the beginning of the hearing.

MR JUSTICE STANLEY BURNTON: But there was not a second hearing.

MISS WINDLE: My Lord, I am sorry, that must obviously be my mistake, I was not there.

MR JUSTICE STANLEY BURNTON: Unless there was some hearing that was adjourned before the matter came to me, was there?

MR MOFFETT: No, my Lord. Your Lordship may recall the latter was originally listed for one day and then ran over into the second day. Your Lordship overnight asked Ms Collier, who was then representing the claimant, to go away and see if she can unearth any authorities relating to mistaken facts. So I do not know if that is where the confusion arises.

MISS WINDLE: I am instructed that the mistake of fact did not come to light until after the hearing begun which then occasioned us having to go away and get extra evidence relating to the mistake of fact which was as a result of them not having produced evidence in that (inaudible) to begin with before the hearing. So its those costs, my Lord, that I am instructed to request.

MR JUSTICE STANLEY BURNTON: The order that I made on the 16th was that Mr Prior serve a supplemental witness statement by 4 o'clock on the 17th, and the claimants were given leave to serve a witness statement in response and so on.

MISS WINDLE: Yes, it is the costs incurred as a result of that supplemental witness statement which the claimant says Mr Prior should have brought to the attention of the court before the hearing began, and then all the evidence in response to the submissions and so on would have been done by the claimant before the beginning of the hearing, as opposed to in the middle of it and necessitated going back to the documents and reconsidering matters, inevitably incurring extra expenditure as a result of revisiting.

MR JUSTICE STANLEY BURNTON: Is there a schedule of costs, or are costs to go to a detailed assessment?

MISS WINDLE: My Lord, I understand the costs are to go to a detailed assessment. My learned friend has a schedule, I am afraid I do not.

MR MOFFETT: My Lord, I was going to ask for detailed assessment. Can I perhaps clarify what occurred. The mistake of fact was raised in the witness statement of Mr Prior which was served before the hearing.

MR JUSTICE STANLEY BURNTON: That is how the claimant knew there had been a mistake of fact.

MR MOFFETT: Indeed, my Lord. So it is not true that this matter was not put before the court. Your Lordship may recall that what happened was that your Lordship wanted further clarification on the exact nature of the mistake of facts. Your Lordship was of the view that Mr Prior's original witness statement had not provided --

MR JUSTICE STANLEY BURNTON: Yes, it did not give any figures or say just what the mistake was.

MR MOFFETT: So that is why the matter proceeded as it did. This was a point taken by the claimants and it proceeded not because we say we were in any default, we quite clearly and properly raised the matter for the court and admitted to it. There was no allegation --

MR JUSTICE STANLEY BURNTON: There was insufficient information before me, I felt, for me to decide.

MR MOFFETT: I accept that and I accept that is why your Lordship made the point, but in relation to the principle of the matter, this was an issue which was taken by the claimant. The result of the further evidence was that your Lordship did not accept the claimant's argument of the point and that being the case, I would submit respectfully that the normal rule should apply -- by taking a point which they did not succeed on, then we should be entitled to the cost of that point, my Lord.

MR JUSTICE STANLEY BURNTON: What is said is that additional costs were incurred because the matter had not been adequately addressed earlier.

MR MOFFETT: My Lord, I would not accept that and I would not accept that in the way it is put because there are two separate issues. Firstly there is the issue of the witness statement and it might perhaps be on a less strong ground in relation to that because your Lordship found that your Lordship did require more information. But certainly in relation to submissions, what I would say is a good part of those submissions were addressed to questions of law, and your Lordship may recall getting served with voluminous bundles of authorities and it would not be at all fair to say that was our fault because in relation to the authorities and the principle that was at stake, those matters were very much in play long before the matter first came before your Lordship.

MR JUSTICE STANLEY BURNTON: And you want this to go to detailed assessment?

MR MOFFETT: Yes, my Lord. Given the way the matter proceeded I do not ask your Lordship to summarily assess the costs.

MISS WINDLE: My Lord, the claimant simply says, as your Lordship pointed out, that the defendants had put insufficient evidence before the court and that required the claimant to go back and get additional witness statements and produce additional submissions which might indeed have been done anyway, but would have been done previously and would not have necessitated revisiting matters and reconsidering matters out of consequence as it were and, therefore, incurring extra costs, but perhaps the appropriate place to discuss this is on a detailed assessment.

MR JUSTICE STANLEY BURNTON: Thank you very much. The defendant will have his costs to go for detailed assessment, however the costs of and occasioned by the last witness statement served on behalf of the claimant will be paid by the defendant. I make no separate order in respect of the supplemental skeleton arguments resulting from the service of that evidence on the basis that, more or less, the same time and costs would have been incurred had the matter been originally sufficiently evidenced.

MR MOFFETT: My Lord, I am grateful for that.

MISS WINDLE: My Lord, we would seek permission to appeal and the ground on which we appeal is that the claimant has a real prospect of success on two issues. The first of those issues is whether, in all the circumstances, procedural fairness required that the defendant should make clear precisely the case against the claimant in order that the claimant was able to respond to that. My Lord, our submissions were that procedural fairness required that the claimant should be told exactly the points against him and should not be required to infer them from a letter.

MR JUSTICE STANLEY BURNTON: Those are Ms Collier's submissions?

MISS WINDLE: My Lord, yes. The point of law for appeal is a question of whether the defendant must specify the points which he is going to consider against the claimant before actually considering those points, and not leave him to infer them from (inaudible) but in fact specify them, and we say this is an important point of interest to anybody in the same circumstances who needs to know exactly what they are required to do to respond to a complaint against them, and whether they need to consider any matters which might conceivably be raised or only those matters which are drawn to their attention as being considered.

The second point on which we seek permission to appeal is the question of the mistake of fact, and your Lordship found that if the mistake of fact was material, then it would be a ground for judicial review.

MR JUSTICE STANLEY BURNTON: I think I fudged that a little.

MISS WINDLE: And the issue is whether as a matter of law it is appropriate for somebody to rely on a mistake of fact which they say is immaterial without showing that it is immaterial by showing the size of it in respect of the entire pension fund without showing its immateriality. My Lord, unless you have any further question, those are our submissions.

MR JUSTICE STANLEY BURNTON: Although I did not find this case entirely straightforward, it turned on questions of fact and the real question is the degree of specificity required in what are intended to be informal proceedings. The facts are set out in detail in my judgment. In those circumstances, I do not think it appropriate to grant leave to appeal. Leave to appeal can be sought from the Court of Appeal who will be able to read the judgment and take a view speedily as to whether it is a proper case for the appeal to go forward.

MISS WINDLE: My Lord, I am grateful. There is one other matter. The claimant would seek permission to have an extension of time in which to make a further application for permission to appeal. Ms Collier is actually in court today and again all next week, and there may be some difficulty in obtaining further instructions. In the light of your Lordship's comments, we would seek 28 days in which to make a further application for permission to appeal.

MR MOFFETT: My Lord, I would not object to that.

MR JUSTICE STANLEY BURNTON: So be it.

MISS WINDLE: My Lord, I am grateful.