The CJEU has concluded that the restrictions on the compensation payable by the UK Pension Protection Fund (PPF) to employees of insolvent companies are contrary to Directive 2008/94/EC (the Insolvency Directive). The Court of Appeal referred the case to the CJEU in July 2016.

The CJEU judgment confirms that, when their employer becomes insolvent, “every individual employee must receive old-age benefits corresponding to at least 50 per cent of the value of his accrued entitlement,” including any indexation benefits. According to the CJEU, the UK statutory cap that imposes an absolute limit on pension payments to members of schemes rescued by the Pension Protection Fund (PPF), irrespective of their original pension entitlements, is unlawful. The CJEU also held that Article 8 of the Insolvency Directive is directly effective and can therefore be relied on directly against the Pension Protection Fund to override the terms of the Pensions Act 2004. The judgment recognises the potential consequential effects on trustees administering any pension scheme that is or has been subject to PPF assessment.

The case arises out of a challenge by Mr Hampshire and 15 other former employees of Turner & Newall (“T&N”) to the PPF’s valuation of the T&N pension scheme. The PPF is the industry-funded statutory “lifeboat” fund responsible for insolvent pension schemes. While most pensioners whose schemes fall within the PPF initially receive compensation of 90% or 100% of their original pension, a small percentage who have not reached retirement age by the time of the insolvency have their compensation capped, which results in some cases in a loss of more than half of their pension. The impact of the cap is exacerbated by restrictive provisions in the Pensions Act 2004 on annual increases, which further reduce the value of PPF compensation over time. In this case, although the T&N scheme had been valued as having a surplus of around £50m, under the 2004 Act Mr Hampshire and around 40 other members of the scheme were subject to the compensation cap, which in some cases resulted in a loss of over 75% of the pension those employees were entitled to receive, and were receiving prior to 2006, under the scheme rules.

The judgment represents a significant victory for Mr Hampshire and other pensioners who have campaigned against the UK’s pension compensation cap for well over a decade. It means that several thousand former employees of companies that have gone insolvent are likely to receive increased compensation payments and increased future pensions, which in some cases may amount to hundreds of thousands of pounds over a pensioner’s lifetime.

Gerry Facenna QC and James Bourke, instructed by Ivan Walker of Walkers Solicitors, are acting for Mr Hampshire.

The case has been widely covered in the media, including The Times and The Financial Times.

In a judgment handed down today, the CAT upheld the CMA’s August 2017 decision finding that the internet sales ban operated by Ping Europe Limited infringed the prohibition in Chapter I of the Competition Act 1998 and Article 101 of the Treaty on the Functioning of the European Union. The judgment represents the first time the CAT has ruled on a CMA decision concerning a “vertical arrangement” (i.e. an arrangement between undertakings operating at different levels of the distribution chain).

Ping is a UK based manufacturer of golf clubs. For some years, it has prohibited its authorised retailers from selling its clubs online, the aim being to promote face-to-face custom fitting for its clubs. Following a complaint by one of Ping’s retailers, the CMA investigated Ping’s ban and found that, whilst the aim was a legitimate one, the ban was, by its very nature, liable to harm competition between Ping’s retailers (by, for example, preventing them from competing for sales outside their local catchment areas). As such, it constituted a restriction of competition by object. The CMA directed Ping to bring the infringement to an end and imposed a fine of £1.45 million.

In today’s judgment, the CAT dismisses Ping’s appeal on liability, but reduces the fine to £1.25 million. The judgment finds that the CMA was right to conclude that Ping’s ban was an object restriction, and that it failed to qualify for exemption under Article 101(3) of the Treaty. In doing so, it sets out the legal principles to be applied when assessing internet sales restrictions, following the Court of Justice’s decisions in C-439/09 Pierre Fabre, C-67/13 Cartes Bancaires and C-230/16 Coty.

Ben Lask, who is Standing Counsel to the CMA, acted for the CMA. The CAT’s judgment can be read here.

Anneli Howard and James Bourke acted for the complainant.

McLaughlin, Re Judicial Review (Northern Ireland) (Rev 1) [2018] UKSC 48

In a widely publicised ruling, the Supreme Court has held that the scheme in Northern Ireland governing payment of Widowed Parents’ Allowance unlawfully discriminates against unmarried parents. The judgment of the majority focused closely on the implications for children affected by this differential treatment.

Steve Broach acted for the National Children’s Bureau in its intervention in Re an application by Siobhan Mclaughlin for Judicial Review (NI) [2018] UKSC 48, the intervention being described by Lady Hale as ‘helpful’

The judgment is available here.

The Upper Tribunal has held that regulations under the Equality Act 2010 excluding children who have a ‘tendency to physical abuse’ from the protection of the Act give rise to unlawful discrimination under Article 14 ECHR insofar as they apply to children with impairments which give rise to an enhanced risk of physical aggression.

Judge Rowley held that in accordance with section 3 of the Human Rights Act 1998, regulation 4(1)(c) of the Equality Act 2010 (Disability) Regulations 2010 ‘does not apply to children in education who have a recognised condition that is more likely to result in a tendency to physical abuse’ (para 98).

The appeal concerned L, a child with autism who was excluded from his primary school. L’s parents appealed to the First-tier Tribunal (FtT) alleging disability discrimination by the school. However the FtT held that L’s behaviour had amounted to a ‘tendency to physical abuse’ such that in relation to this behaviour he was not ‘disabled’ for the purposes of the Equality Act 2010. This meant that the school did not have to justify the decision to exclude L.

The Upper Tribunal allowed L’s parents’ appeal on the basis that the FtT erred in applying regulation 4(1)(c) to L and treating him as not ‘disabled’. This was because applying the regulation to children with an impairment which is more likely to result in physical aggression gave rise to unlawful discrimination contrary to Article 14 ECHR, read with the right to education in Article 2 of the First Protocol (A2P1).

The appeal was defended by the Secretary of State, who accepted that the issue was within the ‘scope or ambit’ of A2P1 and that L had a relevant ‘status’. The Secretary of State argued (1) that children such as L were not in an analogous position to other ‘disabled’ children who did not display a ‘tendency to physical abuse’ and (2) that in any event the differential impact of the regulations on children such as L was justified. Both these submissions were rejected by the Upper Tribunal. In particular Judge Rowley found that the application of regulation 4(1)(c) to children such as L did not strike a ‘fair balance’ and was therefore disproportionate. Judge Rowley held that ‘the requirement for the protection of the status group’s fundamental rights comprehensively outweigh the arguments put forward for the protection of the interests of others’ (para 89).

L’s parents were represented in the appeal by Steve Broach and Eric Metcalfe, instructed by Polly Sweeney at Irwin Mitchell solicitors.

The Upper Tribunal’s decision is available here.

Irwin Mitchell’s news release is available here.

WX, R (On the Application Of) v Northamptonshire County Council [2018] EWHC 2178 (Admin)

The High Court has held that decisions made by Northamptonshire County Council (‘Northamptonshire’) on the future of library services across the County (‘Libraries’) which would have resulted in the closure of 60% of its Libraries, were unlawful.

Mrs Justice Yip DBE held that Northamptonshire had made its decision to close the libraries without balancing its statutory duty to provide a comprehensive library service under section 7 of the Public Libraries and Museums Act 1964, against the financial pressures facing the Council. Furthermore, when taking the final decision to close the Libraries, Northamptonshire did not consider its public sector equality duties nor did it conscientiously take into account the response to its consultation on Library closures. The Judge held that the future of children’s centres, a number of which are located in library buildings marked for closure, and the ‘clawback’ of DFE funding which may arise if the children’s centres could not be relocated, were a relevant consideration which Northamptonshire failed to take into account when making its decision to close the Libraries.

The precise form of relief will be determined later in August.

The Claimant, a child known as WX, was represented by Steve Broach and Khatija Hafesji of Monckton Chambers, and instructed by Irwin Mitchell LLP. A second claim was brought by an adult library user with separate representation.

The judgment can be found here.

KE & Ors, R (On the Application Of) v Bristol City Council [2018] EWHC 2103 (Admin)

The High Court has held that cuts made by Bristol City Council (‘Bristol’) to the funding available for services for children and young people with special educational needs and disabilities (‘SEND’) were unlawful.

His Honour Judge Cotter QC (sitting as a Deputy High Court Judge) held that Bristol were obliged both under statute and common law to consult with affected families before making budget reductions for SEND services, but had not done so. Furthermore there was no evidence of regard by decision makers to the need to safeguard and promote the welfare of children when making the decision, as required by section 11 of the Children Act 2004. The budget decision was also irrational because of a failure to have regard to relevant considerations.

The Judge rejected Bristol’s procedural defences and decided that the relevant budget allocation would be quashed, requiring Bristol to ‘reconsider its funding allocation in this area in the light of the resources available at the material time, without disturbing other aspects of the budget or in particular the Council Tax calculation and without the Court telling the Defendant how its resources should be expended.’ (para 150)

The Claimants were represented by Steve Broach of Monckton Chambers, led by Jenni Richards QC from 39 Essex Chambers for the final hearing and instructed by Simpson Millar LLP. Further discussion of the judgment is available from Simpson Millar and BBC News.

The judgment can be found here.

TW & Ors, R (on the application of) v London Borough of Hillingdon & Anor [2018] EWHC 1791 (Admin)

In a judgment handed down on 13 July 2018, the High Court (Supperstone J) decided that a 10 year residence requirement imposed by the London Borough of Hillingdon in its allocation policy for the provision of social housing was indirectly discriminatory, on the grounds of race, and therefore unlawful.

The case was brought by three Claimants, TW, SW and EM, all of whom are Irish Travellers, and currently living in temporary accommodation in Hillingdon. TW is a woman, lone parent, who cares for SW her two year-old daughter. EM cannot work on the grounds of disability as a full-time carer for his three disabled children.

The Claimants challenged Hillingdon’s Social Housing Allocation Policy, which contained a condition that only households with at least 10 years’ continuous residence in-borough qualified to join the upper welfare-based bands of the housing register – and therefore were much more likely to obtain housing – as well as the additional preference given to such households who were already in the upper bands. The Claimants claimed that as, Irish Travellers, it was much harder to satisfy a lengthy residence requirement, as, due to their race, they had spent many years living a nomadic existence.

In finding for the Claimants, Supperstone J held that the residence requirement was indirectly discriminatory, on grounds of race, especially a requirement as long as ten years. It was almost certain to have a significant and adverse impact on Irish Travellers. However, the Council could not justify the provision. Noting that racial discrimination was a particularly invidious kind of discrimination, and the courts would carefully examine the reasons offered for any discrimination on grounds of race, Supperstone J commented that “The real problem for the Council in attempting to justify the ten years’ qualification and uplift is the paucity and inadequacy of their evidence.” The Judge was “firmly of the view” that the Council’s evidence failed to justify the impact of the ten-year residential qualification and uplift.

Furthermore, the Judge found that the Council’s introduction and maintenance of the residence qualification and uplift gave rise to a breach of s. 11(2) of the Children Act 2004, which requires local authorities to make arrangements for ensuring that their functions are discharged having regard to the need to safeguard and promote the welfare of children. The Judge held that the Council were not in a position to demonstrate, by reference to written contemporaneous records, the process of reasoning by which they had reached their decision in relation to the impact of the residency qualification and uplift on children. Supperstone J rejected the Council’s case that compliance with s. 11 was evidence from the scheme itself.

The Claimants also challenged an uplift under the Allocation Scheme for working households. Supperstone J held that this uplift was indirectly discriminatory but concluded that this provision had been justified by the Council.

The Claimants were represented by Ian Wise QC and Azeem Suterwalla of Monckton Chambers. They were instructed by Rebekah Carrier of Hopkin Murray Beskine.

The judgment can be found here.

LS Cable & System Ltd v European Commission

By decision of 2 April 2014,1 the Commission imposed fines of over €300 million on a number of producers of (extra) high voltage underground and/or submarine power cables for participating in an anticompetitive cartel. Such cables are typically used to transmit and distribute electricity and to interconnect power grids in different countries. According to the Commission, from 1999 onwards and for almost ten years, the main European, Japanese and South Korean power cable producers participated in a cartel aimed at restricting competition for projects in specific territories by allocating markets and customers, thereby distorting the normal competitive process. Most of the producers concerned brought actions before the General Court seeking annulment of the Commission’s decision and annulment of the fines imposed or a reduction of those fines.In today’s judgments, the Court dismisses all those actions.

Ben Rayment was instructed by the European Commission Legal Service as advocate in Case T-439/14 LS Cable & System Ltd v European Commission.

To read the General Court of the European Union’s press release please click here.

The High Court rejected a jurisdiction challenge by Prysmian and NKT, defendants in a UK follow-on damages claim being brought by Vattenfall the state-owned Swedish electrical wind power company and others following the Commission’s power cable cartel decision. The judgment as handed down on 4 June 2018 is here. A case note will follow.

Philip Moser QC, Anneli Howard and Fiona Banks of Monckton Chambers represented the Prysmian defendants.

Michael Armitage of Monckton Chambers is junior counsel for the NKT defendants.

After an unprecedented 10-day hearing, the Court of Appeal handed down judgment today in the three linked appeals on the lawfulness of interchange fees, in Sainsbury’s v MasterCard (Competition Appeal Tribunal), Asda and others v MasterCard (Commercial Court) and Sainsbury’s v Visa (Commercial Court).

In the UK, interchange fees are fees charged on all card purchases.  They are charged by the banks who issue cards to cardholders to the banks who provide services to retailers.  They are passed on to the retailers themselves in ‘merchant service charges’.

The case is the biggest competition appeal for many years and the Court of Appeal’s decision has been keenly awaited.  There are currently scores of cases pending in the English courts, as well as in the courts elsewhere in the EU, concerning the legality of banks’ interchange fees.  The case turns on points of fundamental importance in competition law damages claims, and is of much wider interest and significance too.

Sainsbury’s was represented in the Court of Appeal and below by Mark Brealey QC, instructed by Morgan Lewis and Mishcon de Reya.  Asda, Argos and Morrisons brought in Jon Turner QC and Meredith Pickford QC to lead on the appeals, instructed by Stewarts.  Given the importance of the case, the European Commission, represented by Ronit Kreisberger as well as Nicholas Khan QC of the Commission Legal Service, unusually appeared to make oral submissions to the Court of Appeal, which in substance supported the retailers’ cases on Article 101(1) and (3) TFEU.

In a striking outcome, the  Court of Appeal upheld all the retailers’ appeals against the judgments below by two Commercial Court judges.  In particular, the Court of Appeal has now made clear that the banks’ interchange fee arrangements were restrictions of competition under Article 101(1) TFEU.  It also overturned the conclusions of the Courts below on whether the restrictive practices were justified in the interests of economic efficiency under Article 101(3) TFEU.

The cases will now be remitted to the Competition Appeal Tribunal for further directions.

The judgment can be read here.

This case has been covered by BBC News.