28 July 2011 - High Court holds that Secretary of State not entitled to resile from concession in BT pensions case

Mr Justice Mann, sitting in the Chancery Division, has rejected an argument by the Secretary of State for Business, Innovation and Skills that he is able to resile from a concession made regarding the scope of the guarantee for liabilities of the BT pension scheme under section 68 of the Telecommunications Act 1984. The claim is being brought by the BT pension scheme trustees to determine the scope of the guarantee; British Telecommunications Plc is the first defendant and the Secretary of State the second defendant.

The concession in question was made in relation to preliminary issues which had previously been tried. In making the concession, the Secretary of State had stated that if a transfer into the fund was fully funded, the members were not excluded from the guarantee. It had been accepted that a bulk transfer of members into the scheme (known as the 'post-transfer date joiners') had been fully funded and so the concession was alleged to apply to them as well.

The Secretary of State, however, disputed that the concession applied to the post-transfer date joiners. He argued that the increased liabilities arising from the post-transfer date joiners fell outside of the guarantee as they arose as a result of a post-transfer date rule amendment. Furthermore, in the Secretary of State's view, the earlier judgment's effect was that the relevant liabilities were not automatically excluded by virtue of the joining date.

Mr Justice Mann rejected the arguments of the Secretary of State as resiling from that concession would leave the claimant and the first defendant at a significant risk of prejudice. They would be forced to argue from a position which was different to that which would have prevailed had the concession remained.  Mann J also held that resiling from the concession amounted to an abuse of process given that the decision on the preliminary issues previously tried was predicated on that concession. Mann J also held, among other things, that no reason for the Secretary of State's change of mind had been provided.

Andrew Simmonds QC and Henry Legge successfully appeared for British Telecommunications PLC.