UK Time Out: Trustee Cannot Appeal Prohibition From Acting as Pension Plan Trustee
The UK Pensions Regulator has power to prohibit a person from acting as a pension plan trustee. When it does so, the reputational consequences for the individual can be severe and go beyond the pensions sphere. In 2011, three trustees of a pension scheme were prohibited from acting as trustees of any occupational pension plans. The basis of the prohibition was the trustees breaching pension investment legislation and failing to manage conflicts of interests.
The Regulator made the prohibition order under a Determination Notice in October 2011. Following the DN, the trustees’ names were published on the Regulator’s website. The Regulator’s list includes those individuals it does not consider are ‘fit and proper persons’ to act as trustees of occupational pension plans.
The trustees had 28 days from the issue of the DN to appeal it to the Upper Tribunal, but none of them did so within that timescale. However, in September 2016 one of the trustees (Mr X) asked the Upper Tribunal for permission to appeal despite being well outside the 28 day period.
Mr X argued that he had suffered reputational damage. This arose from his prohibition together with other allegations of fraud and criminality (which were never established). He said that, as a result, banks were not willing to lend to him capital to set up a new business and would not accept him as a director of a new company.
The Upper Tribunal decided that Mr X could not now appeal the Regulator’s DN. This was because:
Court time limits serve a public interest and the interests of other parties have to be considered.
The 4 year 9 month delay was clearly significant.
Mr X’s reasons for the delay were not enough to overcome other factors. He was busy facing separate civil proceedings at the time the DN was issued, which also led to stress and anxiety. However, he could still have appealed the DN and then applied for the decision to be postponed until the civil proceedings were resolved. He ought to have been aware that there was no fee required to appeal the DN.
The consequences for the Regulator, if the Upper Tribunal were to extend the time allowed for an appeal, were important given its limited resources.
The consequences for Mr X, of the Upper Tribunal refusing to extend time, were limited. Mr X could still apply separately for the prohibition order to be revoked, just not by appealing the original decision. Mr X’s arguments about his change of circumstances would still be relevant to an application to revoke the prohibition.
This case shows the importance of keeping to Court deadlines. While the Court will extend time limits in some circumstances, it is taking an increasingly strict approach. Strong reasons must be produced for extending time limits. In this case the public interest took priority, in terms of preserving both the finality of litigation and the Regulator’s limited resources.
The case also highlights practical risks to individual trustees who can face considerable personal consequences from a prohibition order.