NHS Pensions Agency v Pensions Ombudsman 2

Reference: (1997) OPLR 99

This was a joint appeal against two determinations of the Ombudsman against the NHS Pensions Agency. Both complaints centred on representations made or allegedly made by the Agency and the relevant employer. The first complainant, Dr Waterhouse, had retired in the belief that he was entitled to a pension which was higher than his actual entitlement. The second complainant, Mr Nicholson, claimed that he had changed jobs on the basis of a transfer value "which it turned out he was unable to secure". Both complainants alleged that they had suffered financially to their detriment due to incorrect representations made to them by the appellant.

In the case of Dr Waterhouse, the Ombudsman upheld the complaint of maladministration and directed that the complainant's pension entitlement be recalculated in accordance with the representations made to him. He also ordered the payment of GBP 200 to compensate the complainant for distress and inconvenience. In relation to Mr Nicholson, the Ombudsman ordered that his transfer value be calculated as if he had been entitled to the transfer. The Ombudsman allocated responsibility for the misrepresentation between the employers and the Pensions Agency in the ratio two thirds to one third. In addition he ordered payments for distress and inconvenience totalling GBP 450 to be made to Mr Nicholson.

The Ombudsman's determination pre-dated the High Court decision in Westminster City Council -v- Haywood. As a result of that decision, Dr Waterhouse agreed to a Consent Order for the appeal. This reversed the Ombudsman's order on the substantive issue but not on the question of damages for distress and inconvenience. In Mr Nicholson's case, comparative figures were produced on appeal which showed that he had not actually suffered any financial loss as a result of the incorrect representation made to him. Accordingly, the appeal was allowed and the Ombudsman's determination was set aside.

Carnwath J permitted the appeals in relation to the compensation for distress and inconvenience. He avoided further consideration of the general principle established in Westminster by holding that whether or not the Ombudsman has a power to make such an order, it would only be possible to do so where there was distress and inconvenience beyond ordinary litigation distress. There was no such distress in either of these cases.

The Ombudsman was ordered to pay half the costs of Dr Waterhouse as he had been somewhat equivocal about his position regarding the appeal which necessitated additional work by Dr Waterhouse's solicitors.