Pensioner retiring early in reliance on erroneous statement of pension benefits - remedy to compensate for losses suffered as result of early retirement - ombudsman wrong to award difference between erroneous figures and benefits actually received

East Sussex County Council v Jacobs: Ch D (Mr Justice Blackburne): 16 December 2003

The pensioner received a statement of her pensions benefits in relation to her past service with the employer indicating erroneously high figures for both the lump sum and retirement pension.

As a result of the statement the pensioner retired a year earlier than she would have had she received the correct information.

The pensioner complained of maladminstration to the pensions ombudsman.

The ombudsman found that the erroneous statement constituted an act of maladministration for which the employer was responsible and which had caused the pensioner to retire earlier than she would otherwise have done, and, in consequence of those findings, made directions the effect of which was to award the pensioner the difference between the erroneous figures and the benefits she was actually entitled to.

The employer appealed on the ground, among other things, that the measure of loss adopted by the ombudsman in assessing the award to be made to the pensioner was not known in law.

Jason Coppel (instructed by Sharpe Pritchard) for the employer; the pensioner did not appear and was not represented.

Held, allowing the appeal and remitting the case to the ombudsman, that the purpose of any remedy for maladministration should be to remedy any injustice found; that, since in the instant case the pensioner had not complained that she had suffered injustice because she had received less in benefits than she ought to have received, the only injustice had resulted from her early retirement; that, since payment of the correct level of benefits as required by law could not constitute maladministration, the measure of loss adopted by the ombudsman went beyond that which he could have in law directed; and that the remedy should have been directed towards compensating for the losses suffered as a result of the pensioner retiring earlier than she would otherwise have done.