High Court rules against a consortium of 38 Lehman Brothers subsidiary companies fighting to be excluded from financial support directions by the Pensions Regulator
THE HIGH COURT has ruled against a consortium of 38 Lehman Brothers subsidiary companies fighting to be excluded from financial support directions (FSDs) by the Pensions Regulator.
The 38 firms had been fighting to have the Upper Tribunal reject an appeal to involve them in FSD proceedings, Accountancy Age’s sister publication Professional Pensions reports.
The appeal to hit the 38 firms with FSDs was launched by a smaller group of six Lehmans subsidiaries, which were themselves issued FSDs by the regulator’s Determination Panel in 2010.
Judge Bishopp and judge Herrington, sitting in the Upper Tribunal tax and chancery chamber, ruled the six firms and the trustees were legally allowed to appeal the panel’s decision not to impose an FSD as they were “directly affected” persons in the action.
They also ruled the two-year time limit under which the panel had to issue an FSD did not apply because the limit only applies to TPR’s administrative process.
Nabarro Partner Anne-Marie Winton said: “The Upper Tribunal’s decision that once an FSD has been issued it is OK to add further companies into its scope, without taking any account of the two-year period within which the regulator has to exercise this power, is surprising.
“This looks very much like the regulator being able to have two bites of the cherry. Additional targets could be at risk of being required to provide financial support to a scheme, even though any link they had with the scheme ended more than two years ago.”
A regulator spokesman said: “The Upper Tribunal has found that trustees are ‘directly affected parties’, and are therefore able to refer decisions of the Determinations Panel to the Upper Tribunal. We welcome the clarification to this complex area of law.”