Century Life plc v Pensions Ombudsman and Britannia Life Ltd v Pensions Ombudsman 2

Reference: (1995) OPLR 351

The two appellant companies were the successors in business to two insurance companies. These companies were the insurers for two pension schemes of which the various complainants were members.

The insurance companies had no powers in relation to those schemes but drafted the majority of the scheme documentation and provided the administration services. The complainants alleged various forms of maladministration on the part of the insurers, as the managers of the schemes.

The Ombudsman upheld the complaints of maladministration against the two insurance companies as managers of the pension schemes. Before the Ombudsman, neither party disputed that they were managers of the relevant pension schemes.

The appellant insurance companies argued before the court that the Ombudsman's jurisdiction to investigate complaints against "trustees or managers" only applied to managers where there were no trustees. In the alternative, the appellants argued that in each case their predecessors in business were not managers in respect of these pension schemes. Dyson J held that PSA 1993 had not imposed any special or more restrictive meaning to the term managers and no such meaning should be implied. The word bears its ordinary meaning. Where an insurance company carries out the day to day running of a pension scheme they would come within that ordinary meaning. Furthermore, the Ombudsman's jurisdiction to investigate complaints against managers was capable of operating separately from the jurisdiction his office holds over complaints against trustees.

The Ombudsman could not hold that an insurance company was a manager of a pension scheme simply on the basis of his knowledge of the general insurance market. However, on the facts of these two cases, he was entitled to hold that the predecessors to the appellant companies had been managers of the relevant schemes and that the appellants could therefore be found liable for maladministration.