Employers, trustees and Part 8 Claims – What do you need to know?

20 January 2021


A Part 8 claim is a court process for resolving (amongst other things) issues of doubt relevant to the administration of a pension scheme. It avoids the lengthier but more common litigation procedures that require statements of case, disclosure, and factual and expert witness evidence before trial.

In a pensions context, a Part 8 claim is normally used in cases where there is no substantial dispute about the facts but questions about the correct construction of a scheme's rules or relevant legislation are in issue. In these sorts of cases a more streamlined approach can be taken to enable court directions to be given, often resulting in shorter hearings and a quicker resolution of matters of doubt.

Who are the parties to a Part 8 claim?

Parties to a Part 8 claim are usually the scheme's sponsoring employer, its trustees and one or more representative beneficiaries who are appointed to look after members' interests. 

Representative beneficiaries are party to the claim to ensure that all affected members are bound by the court's decision. The trustee often takes a neutral role in the proceedings. Although there can be circumstances in which it is appropriate for the trustees to take a more active role, usually the key issues are argued by the employer and the representative beneficiary.

What about costs?

All parties' costs of a Part 8 claim are paid by the employer or failing that from the scheme's assets.

Does every Part 8 claim follow a set procedure?

There is flexibility within the Part 8 procedure which enables the court to:

  • Give judgment after a fully argued trial, giving directions for the future administration of the scheme and/or the correction of past administration practices.
  • Deal with the matter on a summary basis without a full trial being necessary.
  • Decide the case on paper without any attendance required before the court.
  • Approve a compromise agreed by the parties.

Why might a Part 8 claim be relevant to your scheme?

A Part 8 claim is a useful mechanism for resolving a wide range of issues that can arise in the course of ensuring the proper administration of a pension scheme. Some of the typical scenarios you may come across include:

  • Doubts about the validity of one or more scheme documents such as:
    • whether a deed has been properly executed
    • whether there has been compliance with the requirements of the scheme's power of amendment, section 67 of the Pensions Act 1995 or section 37 of the Pension Schemes Act 1993.
  • Doubts about the meaning (and therefore proper application) of one or more provisions in scheme documentation or relevant legislation such as:
    • how pensions should increase in payment (indexation) or be revalued in deferment (revaluation);
    • how the employer contribution rule operates and the level of scheme funding trustees can seek from the employer;
    • whether members can rely on scheme booklets or announcements to make out a 'change of position' defence or otherwise prevent employers or trustees from having regard only to the scheme's legal documentation in determining benefits.
  • Doubts about whether scheme documentation is out of line with the original intention and/or the scheme's administration practice on issues such as:
    • changes to employer or member/employee contribution rates;
    • changes to the indexation provisions relevant to pensions in payment.
  • Doubts about compliance with a statutory requirement such as:
    • the equalisation of male and female normal pension ages;
    • the preservation of the value of members' benefits.
  • The desire for trustees to obtain protection in respect of aspects of separate and more traditional, adversarial litigation (a 'Beddoe' application) on questions such as:
    • Should the trustees bring/continue a negligence claim against professional advisers?
    • Should the trustees use the assets of the pension scheme to fund such a claim?
    • Should the trustees settle a negligence claim against the advisers at a given level?

If you have any questions about the information above, or about Part 8 claims in general, please contact Ian Gordon or Charlotte Scholes from our Pensions team.

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