Jurisdiction(s):
United Kingdom

DPO finds multiple statutory and equitable investment breaches by trustee; personal liability imposed; exoneration and indemnity defeated by dishonesty; administrator’s maladministration; substantial redress directed

Published on: 08 January 2024

Published by a LexisNexis Pensions expert

Legal News

Article summary

Summary

The DPO upheld a complaint, concluding that a pension scheme trustee committed multiple breaches of trust by directing scheme assets into speculative ventures and holdings in which he had a personal stake. He did not obtain advice before making these investment decisions. Given the trustee’s reckless conduct, the scheme’s exoneration and indemnity provisions afforded no protection. The Ombudsman’s decision emphasises that trustees can be personally liable for breaches of investment duties.

What were the facts?

Mr M and Mr Y were members of the Focus Administration Pension Scheme (the Scheme). Mr Williams acted as trustee, initially in his personal capacity and later indirectly through Focus Administration Ltd (Focus), which he controlled as a director/shareholder. Brambles Administration Ltd (Brambles) served as the Scheme administrator. The Scheme’s assets were allocated between: lending at below‑market rates to unregulated finance companies and small property developers; and acquiring leases of office pods together with shares in small property development companies...

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