High Court rebuffs police officers’ McCloud judicial review

The PSA had argued that the government had not lawfully consulted on the changes to police pensions due to come into force later this year, which will see public sector legacy schemes closed and members moved to reformed schemes in April, as part of the McCloud remedy.

This is separate from the application for judicial review lodged by various unions late last year.

Pensions Expert has reported previously on the concerns of the Pension Challenge Administration Team — a campaign group composed of officers from every federated rank in the UK — about the reforms. 

McCloud is getting more complicated by the day, but with the pension schemes, employers and the individual members all requiring support, the practical question is whether or not the right resources will be made available

Steve Simkins, Isio

The PCAT has repeatedly argued that the 2015 changes introduce age and sex discrimination, as well as removing protections currently in place for accrued pension rights, points reiterated by the PSA in its application for judicial review.

The PSA argued that the government’s consultation on the McCloud remedy was unlawful, that it failed to comply with public sector equality duties, that representations made to the police created a legitimate expectation that the government subsequently (and unlawfully) breached, and that the decision to close the legacy scheme was made on a “material error of fact”, according to the High Court’s summary of its judgment, issued on December 15.

The ultimate aim of the review was to have the consultation declared unlawful and the decision to close the legacy scheme revoked.

The government’s response was that such a verdict would violate parliamentary privilege, as the McCloud remedy is currently the subject of a bill going through parliament. 

The High Court found that there had indeed been errors and inadequacies, especially as regards the government’s compliance with equality duties.

“Additionally, there was a failure to carry out reasonable enquiries into the numbers of officers who would be affected by closure of the police legacy schemes and thus the equalities implications were not properly examined,” the summary noted. 

There were likewise legal mistakes by the government in the decision-making process behind the consultation, not least that a decision was made on the policy before the consultation responses had been seen, which led to a breach of the public sector equality duty.

The court did, however, reject the claims that there had been a substantive breach of expectations, and that the decision to close the legacy schemes was based on factual error.

It also concluded that quashing the consultation or declaring it void “would amount to an impermissible interference with proceedings in parliament. Accordingly, granting the quashing order that is sought would infringe parliamentary privilege”.

Police association to appeal

The PSA will be appealing the High Court decision, according to a statement published on its website on December 24. 

Its national secretary, Dan Murphy, said: “The PSA took the government to judicial review because it was the only option to be heard and to achieve procedural justice. The court found that during the only opportunity to provide our views on the government’s planned changes to our pensions, we were ignored, and that the government also ignored the equality issues raised by the 3,000-plus respondents. 

“The PSA has had no contact from the government in response to the findings, despite us sharing the serious impact this situation is having on our members and the wider workforce. We would have expected an honourable government to make contact and attempt to remedy the situation.

“As the government has clearly chosen to ignore the court’s findings, we have shared our concerns with the other UK staff associations, who have agreed to support the PSA to take our case to the Court of Appeal to seek relief and force the government to remedy the situation.”

Irwin Mitchell partner Penny Cogher told Pensions Expert that “appeals can be fickle, and politically charged cases such as this can produce shock outcomes”.

“Furthermore, there is no guarantee that the next judge, or indeed a judge in the trade unions’ case, would agree with the High Court’s findings in this case and different emphasis may be placed on the different grounds,” she explained. 

“However, it seems to me that the third-party institutions associated with the public sector may be flogging the proverbial dead horse with this type of challenge. The bar is very high to challenge pieces of subordinate legislation such as the relevant pension directions, and so far no third-party institution associated with the public sector has successfully articulated that the government has acted unlawfully in a material way. Nor has anyone proved sufficient wrongdoing to guarantee any form of relief.

“The appeal should be watched with interest. However, notwithstanding the court of public opinion, the government is probably feeling its position safer overall.”

Steve Simkins, head of public services at Isio, said: “On the one hand, this is a race against time, with the Treasury keen to get to the finish line (the enactment of the bill) before any successful appeal by the PSA.

“On the other, it’s a never-ending marathon, with hurdles galore and plenty of hidden holes in the road as more issues arise. Any remediation around discrimination is itself exposed to further discrimination claims. So even if the bill is enacted quickly, there are likely to be further challenges from employment tribunals and other court cases, which could take years to resolve.”

More McCloud drama to come

As Pensions Expert has previously reported, a number of trade unions — including the Fire Brigades Union, the British Medical Association and GMB — have filed for a separate judicial review over the government’s plans to impose the costs of the McCloud remedy on scheme members.

The BMA in particular was incensed that the decision to transfer the costs to the 2016 valuation meant that previously agreed increases in benefits would be reversed. 

Daragh McGinty, legal director and public service pension schemes specialist at Osborne Clarke, told Pensions Expert that the PSA’s claim “is the latest in a long line of examples of the government’s feet being held firmly to the fire over public service pension scheme changes in 2015”.

Though the court was reluctant in this case to interfere with laws passing through parliament, he noted that the unions’ application is challenging Treasury directions, “which have already come into law”.

Simkins added that, beyond the PSA’s judicial review, “there are already two more potential legal stumbling blocks. The first is members who want to get their hands on compensation straight away, and the other is the judicial review of costs”.

“And who pays for McCloud? Is it the public service pension scheme members or taxpayers? While taxpayers will not want to foot the bill, the question is which members should pay. If the cost is kicked down the road there is a future generation of public services that may have a case to make about unfair treatment,” he said.

“McCloud is getting more complicated by the day, but with the pension schemes, employers and the individual members all requiring support, the practical question is whether or not the right resources will be made available.”