Complaint was made as to a leaflet PEC 3 issued by the Department in 1996, intended to summarise the changes introduced by the Pensions Act 1995, and their purpose. One answer given was: ‘The Government wanted to remove any worries people had about the safety of their occupational (company) pension following the Maxwell affair.’ The Ombudsman found the leaflet inaccurate in not conveying the limitations of the protection, which would not remove ‘any worries’ but at most offered ‘a reasonable expectation – but not a guarantee’ of achieving benefits equivalent to those lost. The Department rejected the criticism, saying it was reasonable to expect people to obtain more detailed information about a specific pension scheme, rather than relying on ‘brief, general and introductory material’ such as was issued by the Department. Judicial review was sought. It was agreed that recommendations of the Ombudsman as opposed to findings, were not binding.
The court was asked whether the findings of the Ombudsman were binding. The claimants argued that findings were binding unless flawed or irrational; the SS said he was entitled, acting rationally, to prefer his own view, without needing to show that the Ombudsman’s view was itself flawed.
Held: It was not enough that the Secretary of State had formed the view that people would not be misled. It was the Ombudsman who had the primary task of assessing the nature of the maladministration and its consequences. The Secretary of State was entitled to disagree with her assessment for cogent reasons, but not to disregard it.
The purpose of the legislation was to give MPs ‘access to the services of an independent and authoritative investigator as ‘a better instrument which they can use to protect the citizen”. The Ombudsman is a ‘servant of Parliament’, but it did not follow that a minister, called to account before Parliament, was precluded ‘from explaining, as part of his justification for the decision to provide no remedy in respect of the complaint, his reasons for rejecting the commissioner’s finding of maladministration’ Such a bar would be ‘wholly foreign’. Parliament did not create a requirement that a public body whose conduct had been the subject of an investigation to accept the Ombudsman’s findings of maladministration.
Sir John Chadwick concluded: ‘It follows that unless compelled by authority to hold otherwise, I would conclude that . . .the Secretary of State, acting rationally, is entitled to reject a finding of maladministration and prefer his own view. But, as I shall explain, it is not enough that the Secretary of State has reached his own view on rational grounds: it is necessary that his decision to reject the ombudsman’s findings in favour of his own view is, itself, not irrational having regard to the legislative intention which underlies the 1967 Act. To put the point another way, it is not enough for a minister who decides to reject the ombudsman’s finding of maladministration simply to assert that he had a choice: he must have a reason for rejecting a finding which the ombudsman has made after an investigation under the powers conferred by the Act.’
and ‘ . . It is not . . a general rule that facts found in the course of a statutory investigation can only be impugned on Wednesbury grounds: although, plainly, if the investigator can be shown to have acted irrationally, that will be a powerful reason for rejecting his findings. The true rule . . .is that the party seeking to reject the findings must himself avoid irrationality: the focus of the court must be on his decision to reject, rather than on the decision of the fact-finder.’
Sir John agreed with counsel for the claimants that ‘. . the relevant test is not whether a reasonable Secretary of State could himself conclude that failure to disclose risks in official leaflets was [not] maladministrative. Such a test would fail to take into account the fact that Parliament has conferred on the Ombudsman the function of making findings of maladministration and that the decision under review is a decision to reject that conclusion. The question is not whether the defendant himself considers that there was maladministration, but whether in the circumstances his rejection of the Ombudsman’s finding to this effect is based on cogent reasons.’
Sir John Chadwick said: ‘On the basis of those reasons it is submitted that the Secretary of State ‘was rationally entitled to conclude’ that the reader of leaflet PEC 3 would not be so misled into thinking that the MFR provided a guarantee that all occupational pensions were safe and secure in all circumstances. If he was entitled so to conclude, then (it is said) he was entitled to reject the Ombudsman’s finding on that point.
For my part, I am not persuaded that that is the correct approach: I am not persuaded that the Secretary of State was entitled to reject the Ombudsman’s finding merely because he preferred another view which could not be characterised as irrational. As I have said, earlier in this judgment, it is not enough that the Secretary of State has reached his own view on rational grounds: it is necessary that his decision to reject the Ombudsman’s findings in favour of his own view is, itself, not irrational having regard to the legislative intention which underlies 1967 Act: he must have a reason (other than simply a preference for his own view) for rejecting a finding which the Ombudsman has made after an investigation under the powers conferred by the Act . .
the judge observed . . that no reasonable Secretary of State could rationally disagree with the Ombudsman’s view that the information in the leaflet PEC 3 was incomplete and potentially misleading. I am satisfied that the judge was correct in that observation; but, for my part, I prefer to say that, in the circumstances of this case, it was irrational for the Secretary of State to reject the Ombudsman’s finding to that effect.’
Sir John Chadwick concluded: ‘It follows that unless compelled by authority to hold otherwise, I would conclude that . . the Secretary of State, acting rationally, is entitled to reject a finding of maladministration and prefer his own view. But, as I shall explain, it is not enough that the Secretary of State has reached his own view on rational grounds: it is necessary that his decision to reject the ombudsman’s findings in favour of his own view is, itself, not irrational having regard to the legislative intention which underlies the 1967 Act. To put the point another way, it is not enough for a minister who decides to reject the ombudsman’s finding of maladministration simply to assert that he had a choice: he must have a reason for rejecting a finding which the ombudsman has made after an investigation under the powers conferred by the Act.’
and ‘. . It is not . . a general rule that facts found in the course of a statutory investigation can only be impugned on Wednesbury grounds: although, plainly, if the investigator can be shown to have acted irrationally, that will be a powerful reason for rejecting his findings. The true rule . . .is that the party seeking to reject the findings must himself avoid irrationality: the focus of the court must be on his decision to reject, rather than on the decision of the fact-finder.’
Sir John agreed with counsel for the claimants that ‘. . the relevant test is not whether a reasonable Secretary of State could himself conclude that failure to disclose risks in official leaflets was [not] maladministrative. Such a test would fail to take into account the fact that Parliament has conferred on the Ombudsman the function of making findings of maladministration and that the decision under review is a decision to reject that conclusion. The question is not whether the defendant himself considers that there was maladministration, but whether in the circumstances his rejection of the Ombudsman’s finding to this effect is based on cogent reasons.’
Sir John Chadwick said: ‘On the basis of those reasons it is submitted that the Secretary of State ‘was rationally entitled to conclude’ that the reader of leaflet PEC 3 would not be so misled into thinking that the MFR provided a guarantee that all occupational pensions were safe and secure in all circumstances. If he was entitled so to conclude, then (it is said) he was entitled to reject the Ombudsman’s finding on that point.
For my part, I am not persuaded that that is the correct approach: I am not persuaded that the Secretary of State was entitled to reject the Ombudsman’s finding merely because he preferred another view which could not be characterised as irrational. As I have said, earlier in this judgment, it is not enough that the Secretary of State has reached his own view on rational grounds: it is necessary that his decision to reject the Ombudsman’s findings in favour of his own view is, itself, not irrational having regard to the legislative intention which underlies 1967 Act: he must have a reason (other than simply a preference for his own view) for rejecting a finding which the Ombudsman has made after an investigation under the powers conferred by the Act . .
the judge observed . . that no reasonable Secretary of State could rationally disagree with the Ombudsman’s view that the information in the leaflet PEC 3 was incomplete and potentially misleading. I am satisfied that the judge was correct in that observation; but, for my part, I prefer to say that, in the circumstances of this case, it was irrational for the Secretary of State to reject the Ombudsman’s finding to that effect.’
Judges:
Wall LJ, Blackburne J, Sir John Chadwick
Citations:
[2008] EWCA Civ 36, [2009] QB 114, [2008] Pens LR 103, [2008] 3 All ER 1116, [2008] 3 WLR 1059
Links:
Jurisdiction:
England and Wales
Citing:
Appeal from – Bradley and Others, Regina (on the Application of) v Secretary of State for Work and Pensions Admn 21-Feb-2007
The claimant had lost his company pension and complained that the respondent had refused to follow the recommendation of the Parliamentary Commissioner for Administration that compensation should be paid.
Held: The court should not rely on . .
Approved – Regina v Commissioner for Local Administration ex parte Eastleigh Borough Council CA 1988
Maladministration includes bias, neglect, inattention, delay, incompetence, inaptitude, perversity, turpitude and arbitrariness in reaching a decision or exercising a discretion, but that it has nothing to do with the intrinsic merits of the . .
Cited by:
Cited – Office of Government Commerce v Information Commissioner and Another Admn 11-Apr-2008
The Office appealed against decisions ordering it to release information about the gateway reviews for the proposed identity card system, claiming a qualified exemption from disclosure under the 2000 Act.
Held: The decision was set aside for . .
Applied – Equitable Members Action Group, Regina (On the Application of) v Her Majesty’s Treasury Admn 15-Oct-2009
The applicants sought judicial review of the defendant’s response to a report of the Parliamentary Ombudsman finding maladministration by the defendant in rejecting the recommendation for compensation.
Held: The respondent’s rejection of the . .
Cited – Gallagher and Another, Regina (on The Application of) v Basildon District Council Admn 9-Nov-2010
The claimant challenged the refusal of the Council to pay compensation as recommended by the Ombudsman. The Council had gathered personal details and information of the claimants in the course of a planning dispute, and then published that . .
Cited – JR55, Re Application for Judicial Review (Northern Ireland) SC 11-May-2016
The Court was asked about the powers of the Complaints Commissioner under the 1996 Order, and in particular about his powers in relation to general medical practitioners working in the National Health Service and whether, and if so in what . .
Lists of cited by and citing cases may be incomplete.
Financial Services, Administrative
Updated: 13 July 2022; Ref: scu.264122