The Pensions Regulator (TPR) has spent almost £3.2m on external barrister fees over the past two years, with one-third of those costs spent on one legal case alone, figures show.
A Freedom of Information request made by IFAonline's sister title Professional Pensions revealed the regulator paid £3,180,626 to external barristers in the last 24 months on a total of 40 cases, with the amount spent on individual cases ranging from £454 to £1,053,471.
TPR refused to disclose a breakdown of costs for individual cases preventing the release of information relating to legal spend on the five “moral hazard” cases – which involve Financial Support Directions (FSDs) and Contribution Notices (CNs) – it prosecuted over the period.
A lawyer said fees for moral hazard cases are likely to comprise a large chunk of regulator’s £3.2m legal spend.
Linklaters partner Mark Blyth (pictured) said: “The bulk of the spend is probably on moral hazard cases but from a cost and benefit perspective they have not resulted in any real recoveries to date.”
Five moral hazard cases have been prosecuted by barristers representing the regulator over the last two years, two CNs involving Desmond & Sons and Bonas Group and three FSDs involving Lehman Brothers, Nortel Networks and Box Clever.
The £3.2m spend would also include legal fees spent on the Great Lakes case, where the sponsor of the Great Lakes UK Limited Pension Plan agreed to pay £30m upfront and £30m over three years to the scheme after the threat of moral hazard proceedings from the regulator.
The regulator said revealing how much was spent on barrister fees and legal advice for individual cases would reveal how an investigation had been carried out, and would be “likely to prejudice its ability to carry out its statutory functions”.
TPR said it opened 2,500 new investigations every year which could lead to court cases which were “complex, multi-jurisdictional, and based on new areas of untested law”.
“In that context, and considering the outcome of many of these cases will affect the way in which tens of thousands of UK pension schemes operate in the future, our spending in this area is carefully measured and appropriate in the circumstances,” a spokesperson said.
Regtech or fintech
Underperformance still present – for now
15% increase in number of claims paid
Open architecture philosophy
Inflation above 2% for first this this year