QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| R (on the application of Richard Parish)
|- and -
|The Pensions Ombudsman
Mr David Pievsky (instructed by The Office of the Pensions Ombudsman) for the Defendant
Hearing dates: 4 and 5 December 2008
Crown Copyright ©
Mr Justice Keith:
The Pensions Ombudsman's role
"… a complaint made to him by or on behalf of an actual or potential beneficiary of an occupational or personal pension scheme who alleges that he has sustained injustice in consequence of maladministration in connection with any act or omission of a person responsible for the management of the scheme."
The use of the word "may" shows that he has a discretion whether to investigate a particular complaint, and he "may … order the discontinuance of an investigation if he considers it appropriate to do so": rule 16(1)(c) of the Personal and Occupational Schemes (Pensions Ombudsman) (Procedure) Rules 1995 (SI 1053/1995) ("the 1995 Rules").
"The Pensions Ombudsman shall not investigate or determine a complaint … –
(a) if, before the making of the complaint … –
(i) proceedings in respect of the matters which would be the subject of the investigation have been begun in any court or employment tribunal, and
(ii) those proceedings are proceedings which have not been discontinued or which have been discontinued on the basis of a settlement or compromise binding all the persons by or on whose behalf the complaint … was made …"
At the same time, an investigation by the Ombudsman should not be derailed by the subsequent issue of proceedings. That is the effect of section 148, which provides, so far as is material:
"(1) This section applies where –
(a) complaint has been made … to the Pensions Ombudsman; and
(b) any party to the investigation subsequently commences any legal proceedings in any court against any other party to the investigation in respect of any of the matters which are the subject of the complaint …
(2) In England and Wales, where this section applies any party to the legal proceedings may at any time after acknowledgment of service, and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings.
(4) On an application under subsection (2) … the court may make an order staying … the proceedings if it is satisfied –
(a) that there is no sufficient reason why the matter should not be investigated by the Pensions Ombudsman; and
(b) that the applicant was at the time when the legal proceedings were commenced and still remains ready and willing to do all things necessary to the proper conduct of the investigation."
"As a matter of principle and common sense, the doctrine of res judicata should apply equally to determinations and directions of the Pensions Ombudsman (and judgments on appeal from him) as to other judgments and determinations, and res judicata should as much be a bar to a complaint before the Pensions Ombudsman as it is a bar to the commencement of legal proceedings to which (in cases where the acts of maladministration complained of consist of interference with private law rights or breaches of private law duties) it is an alternative. I should add that, if contrary to my view for any technical reason the doctrine of res judicata were held to have no application, it would be a proper exercise of his discretion by the Pensions Ombudsman in the interests of finality not to allow an issue already determined to be re-opened before him …"
That case was concerned with whether the Ombudsman should re-investigate a complaint which he had previously investigated, but the principle applies, in my view, just as much to an issue which has been determined by a court. Apart from anything else, you would want to avoid inconsistent decisions on the same issue by the Ombudsman and the court. That was the thinking behind what Knox J said in Hillsdown Holdings Plc v Pensions Ombudsman  1 All ER 862 at p. 899f-g. He thought that section 146(6)(a) suggested that an investigation by the Ombudsman following a complaint to him and court proceedings in respect of matters which would be the subject of that investigation "are intended to be mutually exclusive alternatives", and "it would be strange if it was contemplated that the alternatives would or might produce different results as to the substance of the dispute."
The relevant facts
"(i) that the member's employment [was] terminated by reason of redundancy, or
(ii) with the agreement of the employing authority, that the member's employment [was] terminated in the interests of the efficiency of the service in which he [was] employed …"
Since Prof. Parish had not been dismissed for redundancy, he had to satisfy the condition in reg. E3(2)(b)(ii) if he was to be entitled to such benefits.
"NHS employers may seek early retirement of individual members of staff (including clinical medical and dental staff) in the interests of the efficiency of the service, where performance
- although acceptable in the past, has consistently declined over a period of time to an unacceptable level, and
- after appropriate remedial action has been taken, is considered unlikely to improve."
The Guidelines went on to caution against excessive use of this power. Paras. 2.16-2.18 of the Guidelines provide, so far as is material:
"2.16 Retirements in this category should be rare. The decision to retire an individual early should be taken only as the last resort when it is clearly in the overall interests of the efficiency of the service to do so.
2.17 These arrangements should not be used where an employee's conduct is in question. In these circumstances, appropriate disciplinary proceedings should be initiated.
2.18 When an employee is prepared to accept that early retirement under these arrangements is the most appropriate course of action, the employer should seek their written agreement. However, early retirement can be imposed on an employee if the circumstances described in paragraph 2.14 apply."
"The … claim [in the employment tribunal] principally concerned the manner of [Prof. Parish's] dismissal and …, in my view, did not contest the validity of the reasons given for dismissal. Although it might be the case that, had a hearing taken place, the reasons for dismissal would have been considered and findings made in relation to them, that did not happen and therefore the Ombudsman would not be asked to make findings on matters on which a different tribunal had already ruled."
It is unclear what the phrase "the validity of the reasons given for dismissal" meant. It could have meant that there had been no dispute in the tribunal about what the reasons for Prof. Parish's dismissal had been. Alternatively, it could have meant that there had been no dispute in the tribunal about whether the reasons given for Prof. Parish's dismissal had been capable of justifying his dismissal. But leaving that aside, the conclusion which was reached was that the proceedings in the tribunal were not a bar to the Ombudsman investigating Prof. Parish's complaint because no findings had been made by the tribunal, i.e. the doctrine of res judicata did not apply. That did not deal with whether the proceedings in the tribunal had deprived the Ombudsman of jurisdiction under section 146(6)(a) on the basis that the proceedings in the tribunal had been "in respect of … matters" which were the subject matter of the complaint to the Ombudsman. That was not an issue which the Ombudsman ever addressed – at least not until after the current claim for judicial review was issued.
"There is no dispute that your client's application to this office was received before the High Court received his claim for judicial review. Indeed I set this out clearly in my letter of 31 May 2006. Nonetheless, had the Ombudsman been aware of the application for judicial review and the order of 2 June 2005, he would not have accepted this complaint for investigation. The Ombudsman takes the view that the issue is not whether he has jurisdiction to investigate but whether, as a matter of discretion he should investigate or should continue an investigation of a matter where such parallel proceedings are commenced.
There is no dispute that the Pensions Ombudsman is able to investigate and determine complaints of maladministration causing injustice and disputes of fact, as well as determining disputes of fact or law, as my colleague … explained in her letter of 11 July 2005. She also pointed out that the decision to investigate would be kept under review and could be revised.
You have suggested that there are matters that the Ombudsman could investigate, which were not considered by the court. You dispute some of the facts presented to the court and assert that the Board's decision as to the reasons for the termination of your client's employment was erroneous. Alternatively, you say that, even if the facts presented to the court are correct, there remain factual matters that are unresolved, from which the Ombudsman should draw conclusions. Finally you say that the court did not consider the underlying evidence which related to your client's case, as the Administrative Court does not usually concern itself with issues of disputed fact, and the judicial review proceedings do not permit claimants to lodge voluminous bundles of documentation, even where these are relevant to underlying disputes of fact.
The High Court has already made clear, in its order of 2 June 2005, that NICE correctly construed the phrase 'in the interests of the efficiency of the service', and was entitled to determine that the termination of your client's employment was not 'in the interests of the efficiency of the service'. The Ombudsman is adamant that he should not be used as a way of challenging a matter [which has] already been determined by the High Court. If that decision has been made by the High Court on the basis of a wrong appreciation of the factual background to the decision that would seem to be a matter for you to pursue, or to have pursued, with the Court of Appeal.
You have said that you consider that the court, in reaching the decision it did, might have been influenced by the possibility that the Pensions Ombudsman would conduct an investigation. But there is no evidence to substantiate that statement.
In all the circumstances, therefore, this letter is formal notice of the Pensions Ombudsman's decision to discontinue the investigation into your client's complaint." (Emphasis supplied)
The key point is that the Ombudsman thought that the complaint which he was being asked to investigate was one which had already been determined in the earlier claim for judicial review.
The current claim for judicial review
The subsequent correspondence
"The substance of Prof. Parish's present complaint is that on a proper assessment of the evidence there was no factual basis for the termination of Prof. Parish's employment on the grounds of the efficiency of the service. The substance of the judicial review application was that, even if there were such a factual basis, NICE had no power to lawfully terminate the employment on the alleged basis of the efficiency of the service."
At first blush, that does not make much sense. After all, the case which Prof. Parish's solicitors were advancing was that his dismissal should have been regarded as having been in the interests of the efficiency of the service. But Prof. Parish's solicitors were plainly making the point that the claim for judicial review had proceeded on a set of facts which Prof. Parish was prepared to assume for the purposes of that claim were correct, whereas that assumption was not being made in his present complaint to the Ombudsman. In the context of everything which had gone before, I am sure that what the author of the letter meant to say was:
"The substance of Prof. Parish's present complaint is that on a proper assessment of the evidence there was no factual basis for the termination of Prof. Parish's employment on the grounds of poor performance. The substance of the judicial review application was that, even if there were such a factual basis [for his termination on such grounds], Prof. Parish's dismissal should have been regarded as having been in the interests of the efficiency of the service."
The Ombudsman's new point