HF Pension Trustees v Ellison 2

United Kingdom

Reference: (1999) 30 PBLR (10)

Trustees of a pension scheme, relying on advice from solicitors, made transfers from one scheme to another scheme. The latter scheme allowed for surplus to be returned to the principal employer whereas the first scheme did not. The surplus was transferred in 1989 from the first to the second scheme and a large proportion of surplus repaid to the employer in 1990.

The Ombudsman determined the transfer was invalid.

The High Court ruled that the transfer was invalid. The trustees commenced proceedings in negligence against the solicitors (who had become partners in a new firm as a result of a merger). The Court ruled that the trustees had no right of action against the new partnership. The new partnership could voluntarily assume the old partners' liabilities, but that was only binding between the old and new partners; it did not allow the trustees to sue the new partnership. Secondly, the action was time-barred. The trustees knew all the facts relevant to the negligence claim when they made the original transfers. The fact that they only later appreciated that the advice might have been negligent did not extend the time limit for bringing actions.