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Pension Ombudsman holds pension administrator accountable for investment loss due to delayed transfer of funds

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management


Mr. T. (CAS-38354-V5L8)

Facts of the case

  • Mr. T. was a member of a pension scheme.
  • In March 2016, Mr. T. instructed the administrator of the Scheme (“Administrator”) to transfer his funds from a small self-administered scheme to a new provider’s self-invested personal plan. Mr. T. intended to invest these funds immediately following the Brexit vote, with the intention that he would benefit from potential market volatility surrounding the June 2016 referendum.
  • Due to delays on the Administrator’s part, these transfers were not made until August 2016.
  • Mr. T. complained to the Pensions Ombudsman (‘‘PO’’), claiming for the loss of investment suffered due to the delay in transferring the funds.

Pensions Ombudsman

  • The PO dismissed the claim holding that due to the uncertainties present, such as which shares Mr. T. was to purchase or whether he would have been able to purchase these shares in the desired amounts, the adjudicator could not establish that it was reasonably foreseeable to the Administrator that Mr. T. would suffer the loss he was claiming, nor conclude what loss he had actually suffered.
  • Instead, the PO awarded Mr. T. £2,000 for maladministration.

High Court’s decision

  • Mr. T. appealed the PO’s decision to the High Court, arguing that the PO was wrong in law to find that (a) the loss was not reasonably foreseeable and (b) that the loss was immeasurable.
  • The High Court upheld the appeal. Mr. T. did not have to show which shares he intended to purchase or that he would have been able to do so. He was only required to prove, on the balance of probabilities, that he would have invested his funds following the referendum vote.
  • This was not a loss of chance case. There were no considerations of what a third party might have done, only what Mr. T. himself would have done.
  • The PO was to identify the date on which the funds would have arrived but for the delay occurring, and Mr. T. was to prove, on the balance of probabilities, what he would have done with the funds had this occurred.
  • The PO was then to assess the loss by analysing the nature of the portfolio Mr. T. would have likely invested in based on the evidence before him. Mr. T. did not need to show which shares he would have invested in specifically.


  • The case was remitted back to the PO and both parties made further representations.
  • The PO determined that the transfer should have been made by 23 June in view of the reference Mr. T. made to the referendum date in recorded calls on 10 June.
  • The PO held that the calls also demonstrated that Mr. T. was aware there was going to be a post-Brexit opportunity in the event of a leave vote and, if there was a leave vote, that Mr. T. intended to invest.
  • The PO accepted Mr. T.’s evidence of his approach to investment and his reasons for not investing the monies once the transfer was completed (at which point the markets had mostly recovered).
  • The PO considered that Mr. T.’s evidence was sufficient to satisfy the “logical self-consistency” test (i.e. that it had been rigorously tested by reference to logical self-consistency) even though no independent evidence was available as to what he would have done.
  • Having considered the evidence, the PO held that Mr. T. would have invested £250,000 in the FTSE 100 Index immediately after the referendum vote, and thus made a profit of £43,700.
  • Mr. T. was awarded £43,700 in damages plus interest at 8%, to be paid into his SIPP.

Analysis and Practical Advice

The High Court judgment, and its subsequent application by the PO, is useful guidance as to how the PO will approach future cases involving investment loss due to administrative delays and the evidence required to support a claim for hypothetical loss. The decision is of particular interest in the current climate given market fluctuations caused by COVID-19 and the end of the Brexit transition period, especially where pensions administrators may still be adjusting to working remotely.