Bankrupt’s pension scheme rights ruling

The trustees in bankruptcy of Mr McNamara wanted his entitlement in an Irish pension scheme to be included within his English bankruptcy estate.

Section 11 of the Welfare Reform and Pensions Act 1999 removed approved pension arrangements from the scope of a bankruptcy estate. However, the Irish pension scheme was not an approved pension arrangement. Mr McNamara referred the matter to the European Court of Justice (ECJ) who considered it breached Article 49 of the Treaty on the Functioning of the European Union, being a restriction on the freedom of establishment. The ECJ held section 11 was indirectly discriminatory unless it could be objectively justified in the public interest. The reference happened before the UK withdrew from the EU and was therefore binding.

The trustees sought to argue that even if section 11 was indirectly discriminatory, it was objectively justified. The High Court (HC) refused to consider the justification argument and the rustees appealed.

The trustees were previously aware that Mr McNamara was pleading indirect discrimination and failed to raise the justification position then. The Court of Appeal (CoA) held the parties were expected to put forward their entire position from the start. New submissions would require the court’s permission. The HC was not obliged to apply the entirety of the ECJ’s decision where it addressed issues the HC was not required to consider. The CoA could only intervene with the HC’s discretionary case management decisions if they were plainly wrong, which was not the case here.

Wilson v McNamara [2023] EWCA Civ 20

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