Charlotte Scholes and Sam Robinson of Pinsent Masons explore a recent court ruling on scheme documentation and why it is important to keep accurate records of trustee meetings and decisions.
A pensions rectification claim is rarely won by pointing to a drafting mistake and saying it produced an odd result. The harder question is usually evidential: what did the employer and trustees actually intend when the deed was signed?
The High Court’s decision in Soufflet Bairds Malt Limited & Anor v Susan Dear is a timely reminder that the answer may be found in the everyday paperwork generated long before litigation was contemplated.
Explanatory guides, trustee minutes, adviser correspondence, and actuarial advice become key reference points when a court is asked years later to determine what the parties really intended.
Soufflet Bairds Malt case: what happened
The case concerned two scheme deeds, executed in 2004 and 2012. Each contained wording which amounted to a “Courage fetter”: a restriction on the amendment power of the type considered in the Courage Group Pension Schemes case from 1987.
Pinsent Masons acted for both the employer and the trustee in seeking rectification, the legal process through which a court can amend documents that do not accurately reflect what the parties intended at the time. The High Court agreed that the restriction had been inserted by mistake and ordered both deeds to be corrected.
The judgment draws out several evidential features that will be familiar to those who deal with pension scheme documentation: a consolidation exercise, reliance on precedent wording, explanatory materials prepared for lay decision-makers, and later conduct that was inconsistent with anyone having understood that a new restriction had been deliberately introduced.
One theme was the importance of the purpose of the documentation exercise. The 2004 deed was treated as a consolidation or housekeeping exercise following earlier scheme changes. There was no evidence that either the employer or trustee intended to make the benefit structure more generous, or to introduce a new substantive limit on the amendment power.
The second point is the value of explanatory guides: documents that explain a transaction to decision-makers. The court placed particular weight on explanatory guides prepared to accompany successive drafts of the 2004 deed. Those guides were designed to tell lay decision-makers what the draft did and did not change.
Regarding the amendment power, they said the existing restrictions on amendment were being carried forward and identified only legislative updates. If a new restriction had truly been intended, one would have expected it to be called out in those materials.
Why it matters for trustees
That point gives the judgment practical significance. Explanatory notes and change summaries are sometimes treated as supporting ancillary project material. In a rectification claim, however, they may become some of the best evidence of how the transaction was presented to those approving the changes. Memories can fade, but documents don’t.
The judgment is also a reminder that silence can speak loudly. The absence of any recorded discussion was held to strongly support the conclusion that the restriction had not been intended.
For trustees, employers and advisers, the broader lesson is practical.
The adoption of new scheme documentation or any material change should be documented carefully, as the paper trail may one day need to explain the decision. Decision papers should plainly explain, in accessible terms, what is changing, what is not changing, and why.
If a drafting mistake later emerges, the most persuasive evidence may be the routine governance material created before anyone knew there was a problem.
Charlotte Scholes is a pensions litigation partner and Sam Robinson is a senior associate at Pinsent Masons.
