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High Court Rules in Favour of Pensions Ombudsman

AUTHOR(S): Bryan Dunne, Deirdre Cummins
PRACTICE AREA GROUP: Employment, Pensions and Benefits
DATE: 16.12.2015

Minister for Education and Skills and the Minister for Public Expenditure and Reform v The Pensions Ombudsman and Margaret McDermott

This case involved an appeal to the High Court from a decision of the Pensions Ombudsman (represented by Matheson).  The judgment is interesting as it provided clear guidance as to the role of the courts in examining a decision of the Ombudsman.  The judgment confirmed that, where there is a mixed question of law and fact at issue, unless the Ombudsman commits a serious error of law in how he approaches the issue, his decision will be final. 

The Pensions Ombudsman’s decision was in favour of Ms Margaret McDermott, who was married to Padraig McDermott until 2003, at which point they divorced.  Mr McDermott remarried in 2004, and died in 2009, his second wife having predeceased him. 

Following Mr McDermott’s death, Ms McDermott sought to be paid a spouse’s pension from the Department of Education on the basis of a High Court Order granted during their divorce.  The High Court Order was atypical in that it provided that, if Mr McDermott died prior to Ms McDermott, and was a widower on his death, then Ms McDermott would, notwithstanding their divorce, be paid the spouse’s death in retirement benefit payable under her husband’s pension scheme.  The Department of Education refused to pay Ms McDermott a pension, primarily on the basis that no pension adjustment order varying the benefits payable under Mr McDermott’s pension scheme was made before his death.  The Department argued that, without a pension adjustment order, there was no basis on which the scheme trustees could agree to pay the pension to Ms McDermott. 

Ms McDermott complained to the Pensions Ombudsman who found in her favour.  The Minister for Education and Skills and the Minister for Finance appealed that decision to the High Court. 

Rejecting the appeal in the High Court, Barrett J said he was “unhesitatingly” finding in favour of the Ombudsman. 

The Court endorsed the decision of McMahon J in Square Capital v Financial Services Ombudsman(1) and emphasised that an appeal from the decision of the Pensions Ombudsman is not a full rehearing of a case and, in such circumstances, the court should be conscious of allowing “some deferential recognition for the expertise of the Ombudsman”.  The Court concluded that it is not its role to review the Ombudsman’s final determination as though it were reviewing the procedures of a lower court with an obligation to “look afresh at all material”.

The Court also relied on the recent decision of the Court of Appeal in Financial Services Ombudsman v Millar(2) and confirmed that, while the court should not have to defer to the Ombudsman on purely legal questions, where there is a mixed question of law and fact at issue, unless the Ombudsman commits a serious error of law in how he approaches the issue, his decision will be final.  Barrett J emphasised that a “high threshold must be crossed” to successfully appeal a decision of the Ombudsman and that the Ombudsman enjoys “significant discretion” to achieve a fair outcome in relation to a complaint.  

While this decision provides helpful guidance in relation to the ambit of the Ombudsman’s decision making role, as well as the role of the courts in reviewing same, Barrett J emphasised that this judgment should not be viewed as a panacea for ex-spouses in general who hope to claim a spousal pension without a pensions adjustment order.

(1).            Unreported, High Court, 27 August 2009.
(2).            [2015] IECA 127

This article first appeared in the Employment, Pensions and Benefits newsletter, December 2015, written by Jane McKeever.


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