Ewing v Arthur Cox 1

Reference: (2000) OPLR 257

A trustee of a pension scheme who was also the employer personnel director arranged for her benefits to be bought out. The administrator did not realise she had taken a buy out and later paid her a lump sum and pension. This was discovered and the trustees instructed Arthur Cox solicitors to obtain repayment. Arthur Cox sent a letter to the member demanding payment in 7 days.

The Ombudsman found the member knew that she was not entitled to the money and was not acting in good faith. He also considered that Arthur Cox were acting as administrators and ordered them to pay GBP 200 for distress for sending an unnecessarily abrupt letter before action.

Arthur Cox appealed and the Northern Irish Court of Appeal held that whether they could be viewed as administrators depended on their retainer. Here they were simply acting as agent on instructions of their principal, the trustees. Any maladministration was by the trustees. The solicitors were not "concerned with the administration of the scheme" but their principal was. As to whether there had been maladministration, a peremptory tone was to be expected where the trustees had grave suspicions about lack of good faith. The Court would not have categorised the letter as maladministration but given their role of review, they were not able to say the Ombudsman was in error as a matter of law. However, injustice was "impossible" in the circumstances as the member knew all along that she had been overpaid and could expect no other form of communication. No reasonable tribunal could have said there was injustice so it was not necessary to remit the case to the Ombudsman.