Ombudsman to boost legal role after Royal London scam case

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The Pensions Ombudsman is to take a bigger role in pensions disputes that reach the courts,  including pension liberation and auto-enrolment, after a controversial decision on a pension transfer.

Currently the ombudsman can be party to an appeal though it is does not have a right to.

But Ombudsman Anthony Arter wants to take a more active role following the High Court’s decision to overturn an ombudsman ruling involving Royal London earlier this year.

The High Court said Donnie-Marie Hughes did have the right to transfer £8,000 to a SSAS Royal London suspected of being a scam.

Lawyers warned the decision could open the floodgates to transfers being held up by providers worried about where the funds would end up.

Now the Ombudsman says: “Our practice of looking to intervene will now be extended beyond participating in an appeal which raises questions affecting our legal jurisdiction or internal procedures. Our participation will be more pro-active and will be considered against the backdrop of seeking to assist the court.

“Examples of increased participation may include where the decision could have a wider impact on the pensions industry, such as pension liberation or auto-enrolment.”

Pensions Ombudsman legal director Claire Ryan says: “Widening the circumstances where the Ombudsman may look to intervene in appeals of determinations was carefully considered and is supported by the Department for Work and Pensions.

“We believe that the pensions industry and parties to complaints will welcome the change.”

AJ Bell senior analyst Tom Selby says: “The decision by the Ombudsman to take a more proactive role in appeals against decisions which risk undermining pensions, including those involving scams and automatic enrolment, is welcome. The fact the DWP supports this move is hopefully a signal the Government itself will now start to take the issue of pension scams seriously too.

“However, we still believe much more can be done, starting by revisiting the case for banning pensions cold calling.”