Solicitor relieved of failure to comply with court rules on time-limit for appealing Pensions Ombudsman’s decision



Lord Brodie
Lord Brodie

A lawyer who was seeking to challenge a decision by the Pensions Ombudsman to reject a complaint against a trustee over its handling of a sale of properties has been granted permission to bring an appeal despite missing the deadline by more than four months.

A judge in the Court of Session decided, with “some hesitation”, to relieve the noter from the consequences of his failure to comply with a provision in the Rules of Court, after observing that the 14-day time-limit is “anomalously short”.

‘Determination’

Lord Brodie heard that Milngavie solicitor Neil Cunningham had submitted a complaint on 1 February 2016 to the Pensions Ombudsman (PO) in terms of section 146 of the Pension Schemes Act 1993 concerning his rights as a beneficiary of a self-invested personal pension (SIPP), of which Namulas Pension Trustees was the sole trustee. 

The complaint concerned alleged failures on the part of Namulas in its management and sale of heritable properties in which the SIPP had a 50% interest, in consequence of which Mr Cunningham had suffered losses estimated between £300,000 and £400,000.

Nearly three years later on 11 January 2019 the Deputy Pensions Ombudsman (DPO) Karen Johnston issued a determination, having issued a preliminary determination on 7 February 2018, to the effect that the complaint should not be upheld.

A factsheet accompanying the determination stated that: “Appeals are to the Chancery Division of the High Court in England and Wales, the Court of Session in Scotland or the Court of Appeal in Northern Ireland,” adding that for a England and Wales a person wishing to appeal must lodge the appeal “within 28 days” of the ombudsman’s determination, while noting that “different time limits apply in Scotland and in Northern Ireland” and that “legal advice should be taken”.

Section 151(4) of the 1993 Act provides that an appeal on a point of law may be taken to the Court of Session from a determination of the Pensions Ombudsman, but the legislation does not prescribe the manner or the period within which it is to be made, although rule 41.8 of the Rules of the Court of Session (RCS) requires that an appeal against the determination must be made by way of an appeal by stated case for the opinion of the court and that the appeal has to be initiated by an application to the DPO within 14 days after the issue of her decision.

But Mr Cunningham, who had separately raised proceedings against Namulas in Dumbarton Sheriff Court, had wrongly believed that the means of challenging the determination was by way of judicial review.

The court was told that on receipt of the final determination on 14 January 2019 Mr Cunningham spent considerable time in trying to understand the extent to which the DPO had had regard to his comments on the preliminary determination and the extent to which her reasoning had changed in response, preparing a “forensic analysis” of the decision with a view to raising judicial review proceedings.

He first tried to contact counsel with a view to challenging the determination on 28 January 2019, but the advocate was unable to deal with the matter.

On 31 January he instructed a firm of solicitors which instructed counsel, who advised that he thought that appeal of the determination might be subject to the 14-day time limit, which he later confirmed to be the case.

Senior counsel was instructed on 18 February 2019 and on the same day he advised that, as was provided by RCS 41.8, the applicable time limit was 14 days and that the noter would accordingly need to apply to the court to exercise its discretion in terms of RCS 2.1.

‘A little bit of knowledge is a dangerous thing’

Mr Cunningham eventually lodged a note on 7 June 2019 seeking an order to ordain the DPO to state a case for opinion of the Court of Session, along with an an application in terms of RCS 2.1(1) to relieve him from the consequences of his failure to comply with the provision in the Rules of Court relating to the 14-day time limit.

On behalf of the noter it was accepted that he had “made mistakes” and while he was a solicitor, which might give rise to certain expectations, in this case there was an element of “a little bit of knowledge is a dangerous thing”.

After 14 January the noter had engaged in “furious but misconceived activity” in order to put counsel in a position to understand the case. 

Until he received the advice of junior counsel the noter had not been aware of the 14-day time limit; had the factsheet stated that he had 14 days to appeal it is entirely possible that the noter would have been disabused of his belief that the remedy was judicial review and been directed to the need to appeal within what was a very tight deadline. 

It was argued that the dispensing power conferred by RCS 2.1 was available to relieve the consequences of a failure to meet a time-limit imposed by the Rules of Court where it had arisen from “mistake or oversight”, and that it was not necessary to show “exceptional circumstances”.

There was “no prejudice” to the respondents other than Namulas losing a windfall benefit, but the noter considered that his pension fund had suffered a loss in the order of £300,000 to £400,000 as a result of their “mismanagement”.

It was also pointed out that the time-limit in question had been “very short” and that the delay of some four months was not over-long, when contrasted with the period of nearly three years which the DPO had taken in her consideration of the complaint - what was “sauce for the goose was sauce for the gander”. 

It was submitted that the case was of “great significance” to the noter, and there was “no remedy available” against the PO.

‘No prejudice’

The judge decided to relieve the noter of the consequences of his failure to comply with requirements of the Rules of Court, having accepted that was ignorant of the 14-day time limit until junior counsel advised him of it on a preliminary basis on 31 January 2019.

In a written opinion, Lord Brodie said: “I also accept that the time allowed by the Rules of Court within which to make an appeal against a determination by the PO (by requesting him to state a case) is very short. In some cases it may be impracticably short. The recipient of a determination will of course only know what he is faced with if he is aware of what the time limit is.

“That said, exiguous as the information provided by the factsheet may have been, it did at least mention the availability of an appeal and the fact that an appeal was subject to an (undisclosed) time-limit. A prudent recipient of the determination, particularly one who was a solicitor, might have been expected to take immediate competent advice as to when and how he should go about appealing, if that is what he wished to do.

“The noter might have said that he had taken active steps to instruct litigation solicitors and counsel; that he had done this as speedily as possible; that had the ordinary allowance of 42 days under chapter 41 of RCS applied he would have had until 25 February to lodge an appeal; and that 14-day time limit of RCS 41.8 is anomalously short which does not give, in cases of complexity such as this, sufficient time for the preparation and composition of an application.”

He continued: “Here the noter’s failure to comply with the Rules of Court had occurred by the dates in February that the noter had received the advice of junior and then senior counsel. Accordingly, his frankly incomprehensible decision not to follow that advice did not cause his non-compliance. 

“I therefore consider that decision does not prevent an exercise of the RCS 2.1 discretion in his favour. However, the noter’s subsequent delay in acting on counsel’s advice is a factor which weighs against an exercise of that discretion.”

The judge concluded: “The respondents have not pointed to prejudice consequential on allowing the noter relief, beyond loss to Namulas of the finality which it might reasonably have considered had been attained. The noter, on the other hand, may, if deprived of the opportunity to appeal the determination, lose any chance of recovering what he considers to be substantial losses incurred by his SIPP. 

“Balancing these various factors as best I can, I will, albeit with some hesitation relieve the noter of the consequences of his failure to comply with requirements of the Rules of Court, on the condition that he be found liable to the first, second and third respondents in the judicial expenses consequent on the presentation of the note and all procedure following thereon.”

© Scottish Legal News Ltd 2019



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