Court of Appeal to hear appeal over use of Cost Control Mechanism in public sector pensions dispute
The Court of Appeal has agreed to hear an appeal that revolves around the Government's use of the Cost Control Mechanism in the Public Service Pensions Act 2013.
The High Court dismissed an application by the Fire Brigades Union (FBU) and the British Medical Association for a judicial review in March this year.
The two claims, which were heard together by Mr Justice Choudhury, challenged the decision of HM Treasury to make statutory directions contained in the Public Service Pensions (Valuation and Employer Costs Cap) (Amendment) Directions 2021 (the 2021 Directions) pursuant to powers in connection with a Cost Control Mechanism (CCM) contained in the Public Service Pensions Act 2013 (the 2013 Act).
The CCM is a mechanism intended to control changes in costs of public pension schemes and operates by modifying members' benefits (and/or contributions to such schemes) should the measured cost of future pension provision deviate from a set target.
At the High Court, the two unions contended that the modification of the CCM so as to include within the CCM the costs of implementing what has been called "the McCloud Remedy" following the decision in Lord Chancellor v McCloud & Ors, Sargeant and Ors v Secretary of State for the Home Department and Ors [2019] ICR 1489 was unlawful as it was:
- based on a misconstruction of the 2013 Act;
- in breach of legitimate expectation; and
- indirectly discriminatory.
However, Choudhury J found that the legal bases behind each claim were not made out.
BMA has now confirmed that the Court of Appeal has granted it an appeal.
In a statement concerning the litigation, Dr Vishal Sharma, BMA pensions committee chair, said: "We believe it's unfair that doctors and other public sector workers have been made to pay the price for the Government's unlawful age discrimination."
He added: "Having been found to have committed unlawful age discrimination when reforming the NHS pension scheme in 2015, the Government changed the rules to make NHS staff pay for its own mistake. The Government acted unlawfully when reforming the NHS pension scheme in 2015, and consequently is obligated to fix its mistakes. However, instead of paying for this mistake itself, it has tried to pass this cost onto pension scheme members.
"We firmly believe that affected doctors and other public sector workers must not made to pick up the bill for the Government's unlawful discrimination and are looking forward to making our case to the Court of Appeal."
Adam Carey
