HC Deb 21 December 1999 vol 341 cc543-5W
Mrs. Lait

To ask the Secretary of State for Social Security (1) what assessment he has made of the powers of the Pensions Ombudsman to deal with complaints; [103163]

(2) if he will make a statement on the current powers and responsibilities of the Pensions Ombudsman; [103159]

(3) what plans he has to seek amendment of the law to allow class actions by members of the same pension scheme; [103165]

(4) if he will make it his policy to oblige the Pensions Ombudsman to hear oral evidence; [103161]

(5) what assessment he has made of the effectiveness of the process by which complainants are reimbursed the costs of bringing their cases before the Pensions Ombudsman; [103164]

(6) which areas of the powers and responsibilities of the Pensions Ombudsman he is reviewing; [103160]

(7) if he will confer on the Pensions Ombudsman comparable powers concerning the admissibility of documents and evidence and standards of proof as employed in courts of law; [103158]

(8) what recent representations he has received from the Pensions Ombudsman concerning additional powers. [103162]

Mr. Rooker

The Pensions Ombudsman provides an easily accessible service by which pension scheme members and those involved in the running of schemes can raise disputes of fact or law and make complaints of maladministration that have resulted in injustice. He can investigate complaints of injustice caused by maladministration and disputes of fact or law brought by members of pension schemes and their spouses and dependants against trustees managers or employers of those schemes. He can also investigate complaints made by employers against trustees or managers or vice versa, or made by the trustees or managers of one scheme against the trustees or managers of another. Further, he is able to investigate disputes of fact or law referred by employers and trustees or managers of the same scheme or disputes between the trustees or managers of different schemes.

The consultation paper "Strengthening the Pensions Framework" contained proposals to clarify and extend the Ombudsman's remit in respect of certain types of complaint or dispute. These proposals were generally welcomed by those who responded to the consultation. It is intended to bring forward provisions to introduce these changes as soon as is practicable.

A recent Court of Appeal ruling (Thomas Edge & Ors v. The Pensions Ombudsman & Anor) found the Pensions Ombudsman's power of investigation to be limited to those cases where the interests of others not party to the dispute are not affected.

Compliance with the court's determination has the effect of removing certain cases from the Ombudsman's remit. For instance, if a death benefit has been paid to one person (for example a current partner) by the trustees and not to another (for example the legal spouse) the Pensions Ombudsman could not accept a complaint from the legal spouse as it affects the interests of the recipient of the death benefit (who currently cannot be a party) even though the complaint is about the actions of the trustees.

It also means that if groups of members are affected, their cases cannot be considered. For instance, where a complaint relates to the treatment of surplus assets and concerns all the pensioners and all the active members it would be excluded.

The Pensions Ombudsman raised this issue in the light of the potential impact it could have on the types of cases he can investigate. In order to ensure that the Pensions Ombudsman can continue to deal with the range of cases he had dealt with before the 'Edge' decision, changes are required to the procedures under which he conducts his investigations.

These procedures are amended under provisions contained in the Child Support, Pensions and Social Security Bill. These provisions address the restriction on the Pensions Ombudsman's power to investigate and determine a complaint or dispute that affects the interests of those not party to the original complaint or dispute. These will ensure an individual can raise an issue with the Pensions Ombudsman if it affects the interests of a group of members in the same scheme. It will also require that those members have the opportunity to put their point of view. In the case of a group of members, this will be via an appointed representative. In effect, therefore, the procedural changes will establish a mechanism for consideration of group or 'class actions'.

Currently, complainants can have costs reimbursed only for attendance at an oral hearing. This process is adequate when an oral hearing is held to ascertain the facts in a case but might not be sufficient where a complaint or dispute raised intricate issues on which the complaining member might need specialist advice. Without the possibility of access to the resources of their scheme, members may be discouraged from taking valid complaints or disputes to the Pensions Ombudsman because of an inability to finance the required advice. There is, therefore, also provision in the Child Support, Pensions and Social Security Bill to order that legal costs be met from the resources of the scheme. It is anticipated that such orders will be made only for complex cases that involve a number of parties.

The Pensions Ombudsman holds oral hearings where the facts of a case are in dispute or where there is an issue concerning the accuracy of evidence. To require mandatory oral hearings in all instances would lengthen the process, make it more costly and adversarial for those involved and, therefore, we do not propose to change the law in this way.

We also do not propose to confer on the Pensions Ombudsman powers concerning the admissibility of documents and evidence and standards of proof comparable to those employed in courts of law. This would run counter to the principle that the Pensions Ombudsman provides an informal process by which individuals can seek to have their grievances addressed.