This is the nub of the Bugler’s case; it is not untypical; he acts as a pathfinder for his disabled comrades:

In October 1964 Belfast Fireman Reg No:392 Burns P.P. , was injured in an explosion at operations in the city. His hearing was damaged.

In January 1997 after 33.5 years of pensionable service and 6.5 years earlier than his intended completion of his 40 years service, Divisional Fire Officer Reg No: 516 Burns P.P., was, much to his regret, compulsorily medically discharged by Lancashire County Fire Brigade because of permanent hearing loss.

The LCFB awarded him a Rule B3 ill-health Pension with a Rule B4 ‘qualifying’ Injury Award. When calculating his initial pension the LCFB paid him the wrong pension. They underpaid him by paying a 30 year(service completed) Rule B1 ‘Ordinary’ pension in error. The Fire Brigade refused to correct their error when it was pointed out to them and have adopted a dismissive stonewalling attitude whilst procrastinating with already exhausted Internal Dispute Resolution procedures.

The Fire Pension Team at the DCLG have adopted a similar attitude in correspondence in spite of Lord Hutton/Rt Hon Mr.A.Maude M.P./Rt Hon.Mr.D.Alexander M.P., enactment of the Public Service Pension Act 2013 (Schedule 3 Para 15) which requires the Secretary of State(and his Team) to either resolve this dispute and/or bring the case to Court as a question of law. Indeed, the DCLG seem unwilling to recognise the implications of this Act for them, or even its existence.

An intransigence which has led to an Early Day Motion in Parliament which is scathingly critical of the DCLG Fire Pension Team.

 We say, this uncomplicated issue is not a question of law but the correct application of existing law (1992 SI No:129) followed by simple accountancy, but which, because of arbitrary oppressive abuses of power by a Labour led and controlled Lancashire Fire Authority, has now become a Human Rights issue.

THE OPINION.

The question is what ill-Health Pension should be paid to Mr. Burns under Statutory Instrument No:129, Rule B3?

Conclusion.

The FPS Pension Provider failed to follow the appropriate 1992 Home Office Commentary, and has based Mr.  Burns’s pensions on an incorrect APP.

Facts.

Mr. Burns was a long term fire-fighter who, having suffered a ‘qualifying injury’, was invalided out of the service in January 1997 on account of ill-health, but for which he would have served until retirement at age 60 ‘on account of age’. He was, at the time, calculated to be entitled to a Rule B1 pension as though taking an early voluntary retirement, rather than leaving as an imposed Rule A15 retirement. He questions his entitlement. The Pension Provider assures him they have acted as the law requires them to act.

Consideration.

As with much of legislation, whilst the intention is clear, the precise meaning may be open to misinterpretation if taken out of context. Here the legislation is the 1992 S.I. No: 129.

To ensure correct interpretation and implementation of the Act/S.I. – a clear working direction was prepared by the Government of the day as a ‘Commentary’ on the ‘Fire Fighters’ Pension Scheme’. It was prepared in 1992 (until replaced in 2008 but not with any retrospective effect) by ‘Finance Division 2’, at The Home Office, with help and advice from the fire authorities, staff associations, and other Government Departments.

The ‘Commentary’ was prepared specifically to guide pension practitioners in their implementation of the Scheme – a practice ‘bible’ – not to ‘replace or override’ the legislation, but to ensure uniformity of interpretation and that the correct interpretation and guidance was given to all, to ensure consistency and an even handed approach.

 In all legislation, whilst the ‘provision’ is crystal clear to those who draft it, its meaning may not be immediately as apparent to the layman. If taken out of a general context, an ambiguity might ostensibly exist. So it is that the ‘Commentary’ is the work of many minds to create the officially authored Government publication, which the Home Office published to guide the pension practitioner.

 In arriving at this Practice Guide, the Government will have ensured that the provisions of the Act are given the meanings intended. Hansard and many other sources would have been referred to in arriving at the definitive interpretation by the State of its Statutory Instrument – its interpretation and meaning to be given to the terms and conditions set out in what is the Government’s Contract with its public servants, in this case firemen.

 It is not for a public servant to re-interpret that Act or apply provisions in a way inconsistent with the ‘Commentary’.

In setting the context within which to give effect to the Scheme, a Rule B1-1 Ordinary pension is payable on 25 years’ service, to those aged over 50, and is limited, as are all pensions, to 40/60ths of average pensionable pay – APP. The mandatory retirement age is 55, with more senior ranks entitled to serve until 60. Whilst the 2/3rds limit is inviolate, the APP increases with time served. 

 Where an officer is injured in the line of duty and, before being required to retire on account of age he is required to retire on account of ‘ill-health’, he will become entitled to an ‘enhanced Rule B3 Ill-health Pension with A ‘Rule B4 Injury Pension’ also payable.

The award of an ill-health pension automatically disbars the retiree from a Rule B1 Ordinary pension.

All pensions (unless deferred), are payable immediately from the date of retirement, so an ill-health pension is paid over the time which, but for retirement by reason of ill health, an Officer would have been expected to continue to serve to increase his APP, both by annual index linking and by way of promotion.  It is an important point to bear in mind because the Commentary seeks to ensure that ill-health is fully compensated. The intention was fairness, and even generosity to those who risked and suffered injury in fire-fighting for the common good. Indeed, it deliberately set out to increase benefits above preceding levels.

In dealing with a 1956 Optant’s ill-health pension, the Commentary states “A 1956 Optant’s ill-health pension does not provide an enhancement of service in the same way as a current scheme ill-health pension does. It is based on the standard principle of the 1/60^th for each year of service up to 20 years and 2/60ths for each year of service over 20. Nothing is added. However, the age limitation on the service as shown in the table above does not apply, and so the 1956 Optant retiring on ill-health grounds could still end up with more pension than he could have done had he retired voluntarily.”

In effect, under the 1956 Scheme, a person retiring on ill-health at 50, is credited with the full pension they would have received had they completed their service to age 55. This was worth 10/60ths. The 1992 Scheme adopted this established principle and expressed it within the Rule B3 formulae, so compensating a firefighter for the loss of his full time served career. But whilst an upper 60ths addition limit is imposed in 1992, at 40/60ths of APP, the APP is not limited but is to be enhanced forward, which was a departure from precedent. The Commentary re-iterates the adopted precedent that an ill-health Rule B3 can exceed a Rule B1 Ordinary Pension.

So – there are two ways a pension may be enhanced. By an addition, or crediting, of 60ths up to a universal upper limit of 40, and by enhancement of the APP.

At Rule K1-5 in the ‘Commentary’, the general principle is stated “The broad purposes of your ill-health pension are:

 – To compensate you for the interruption of your career, and (once you reach  the age when you could have
retired with a pension)

– To take the place of a retirement pension.”

This is not to say that an ill-health pension is a retirement pension, merely that someone in receipt of an ill-health pension will not also receive a retirement pension. The point being that the calculation of each is different.

The Rule B1 Ordinary Pension is a straightforward time served pension. The Rule B3 ill-health pension is no less than time served (in that it is already earnt and cannot be taken away) but is additionally enhanced in compensation for loss of a full service until required to retire ‘on account of age’. That being the future time in potentially healthy service avoided by the enforced early retirement on grounds of ill-health. It would be self-evidently wrong to substitute a B1 Ordinary pension limited in time with an APP at a point in time when a firefighter was required to retire early by reason of ill-health – for that would deny compensation for future loss.

No Legislation exists in a vacuum.  In England, it comes into existence within the framework of the law, and that includes the practices usual at the time unless specifically denied. In considering what may properly be considered in quantum in a civil case, Judges take into account loss to date, future cost, loss of earnings, pain, suffering, and loss of amenity.

The FPS seeks to make good future loss to be suffered by a Rule A15 retiree, by providing for a ‘notional pension’ which is arrived at by artificially increasing the APP, at the time of calculation, to what he or she could have come to earn, had they not had their service time truncated by injury. In a sense a Rule A15 retiree whose pension is correctly assessed, and given an enhanced gratuity, is fully paid until retirement on account of age, and thereafter – by the pension his full service would have earnt him or her.

The scheme sought fairness, and plainly what a Rule A15 retiree is awarded, would not be very far away from the sort of sums a Court may award in considering quantum alone. The Scheme deals with the injury, pain, suffering and loss of amenity separately by way of an Injury Pension and Gratuity.

Mr. Burns makes no complaint (save on gearing) as to his Injury Award. The problem in this matter lies within his ill health pension and its calculation of future financial loss.

 Within this future financial loss, is lost promotion and its pay, or in absence of promotion, the projected annual increments he could have enjoyed until retired ‘on account of age’ – in this case 60.

A person whose ill-health requires an early Rule A15 retirement does not have his pension calculated by the same formulae as a Rule B1 Ordinary, healthy, voluntary retirement pension. The Rule B3 ill-health formula is “enhancing”. 

The award of a Rule B3 ill-health pension automatically denies the Rule A15 retiree a Rule B1 Ordinary Pension. There is no choice in this. For any FPS Pension Provider to re-instate a Rule B1 Ordinary in place of a Rule B3 ill-health is simply wrong. To do so is to treat the Rule A15 retiree as though he was taking an early retirement and was acting voluntarily, as though by an exercise by personal choice. That is the basis of an early retirement Rule B1 pension but it is wrongly applied to any Rule A15 retirement.

If that course were open to a Pension Provider, it would save the pension fund a great deal of money, but it would wholly defeat the purpose of the Scheme and the legislative intention. And what the public requires of its governments in treatment of those who risk life and limb to protect Society. 

The Commentary is at pains to make plain the enhancements the Statutory Instrument requires to be applied in the operation of its scheme. It deals with this specifically; not once but twice in its Rule B3 ill-health pension guidance, and plainly does so with care and in order to put beyond all doubt that any B1 or other pension substitution would be to wrongfully deny legal entitlement.

 The point at principle is that there is no set formulaic, single iIl-health pension, but a “basic” ill- health pension which is to be “enhanced” to make it fulfill its “broad purpose”.

 But Provision is made by way of formula to count additional 60ths of the APP towards a basic ill-health pension, (1/60 pa to 20 years’ service, then 2/60 pa over 20) to which “you can count extra 60ths of APP (“ill-health enhancement”) by compulsory retirement age.” But this is limited at all times to an upper limit of 40/60ths – 2/3rds.

But when it came to any exercise of discretion, and to avoid the temptation of public servants in their dealings   with  un-informed pensioners  to casually negate the legislation to save money, and to avoid negligence – so on  fundamentally  important issues – the Commentary not only gives the same direction and guidance more than once, but changes the language in so doing to make the point unavoidable to anyone using the Commentary, as all in such positions of responsibility well knew what they were required to do.   

At Page B3-2, in dealing with ill Health Pension provision, The Commentary poses a rhetorical question which it then answers: Q, “How much is the pension?” – A, “never more than 40/60’s (2/3rds) of APP, or what could have been earned by compulsory retirement age.”

 And again, not as mere repetition, but rephrased for impact at page B3 -3 (2): “never more than 40/60ths of APP, or what you could have earned by your compulsory retirement age.”. (My underline).

 This provides two mechanisms for enhancement:

 1.  60ths may be added, but are limited to “never more than” than 2/3rds of an APP.

 2.  An ill-health pension is to be calculated on the APP which ‘could’ have been earned, or ‘you could’ have earned by ‘your’ retirement on account of age (but for ill-health). 

The word used is ‘could’. It imposes on the Rule A15 retiree a very low standard of proof of future earnings and rank. Whilst it cannot be fanciful there is no imperative as implied by the word ‘would’.

Quite clearly, such an APP, can only be correctly projected forwards on the historical Pay Formula Settlement, or established trend RPI, and that has to be done for the period until the retiree would have been required to retire ‘on account of age’. The wording is unambiguous and plain and admits no room for error, misunderstanding, or mistake.

Some promotions are timed events. Other promotions are in the hands of those who decide such things.

This enters into the equation an element of judgment. So the question becomes what is the reasonable thing to have done, or do, in each Rule A15 case. Under this discontinued Scheme it was to ask the Chief Fire Officer for an opinion on what any particular Officer ‘could’ have achieved. At best it is largely subjective but, in considering this ex post facto, it has to be borne in mind that presented with a Rule A15 ill-health premature departure, human nature and comradeship being what it is in such units of public service, no CFO is going to be less than magnanimous in such an opinion. In the present case it was back in 1997 – when life was very much on the up and a far cry from the austerity of today.

The difficulty arises in this case because the Commentary was ignored at the time. None of the guidance was followed. Divisional Officer Burns, on being required to take a Rule A15 ill-health retirement in 1997, was given a Rule B1 Ordinary pension.

Today, a Mr. Warren, a Civil Servant, not in post in 1997 and understood to have no specific pensions expertise, but who is currently administering the Lancashire Fire and Rescue Service Pension Scheme, is seeking to avoid correction.

Mr. Warren ostensibly justifies refusal to correct the error by a uniquely idiosyncratic interpretation of S.I. No: 129, Rule B3, Pt 111, and specifically –

 Cl 5 – (1) Where: –

 “(a) If the person had continued to serve until he could be required to retire on  account of age, he would have become entitled to an ordinary or short service pension (“the notional retirement”), and

  (b) The amount calculated in accordance with paragraph 3 or 4 (the ill-health pension) exceeds the notional retirement pension

 The amount of the ill-health pension is that of the notional retirement pension.”.

By his interpretation, repeated several times in his letters, the Rule A15 retiree receives a Rule B1 pension when the ill-health is smaller, but also when the ill-health pension is greater. In Mr. Warren’s view there is effectively no ill-health pension, the ordinary Rule B1 pension meets all cases.

If Mr. Warren is correct, then all those many who so laboriously engaged in the Home Office production of the Commentary have misunderstood what it meant. Indeed, most of the S.I. is superfluous and without meaning for, as Mr. Warren would have it, the only pension the S.I. requires to be paid, in sickness or health, is a Rule B1 in health, and a Rule B1 under the guise of a ‘notional pension’ in ill-health. By his avoidance of immediate correction, he denies the purpose of the Commentary and takes the legislation to be of no effect.

 It is to guard against this sort of misconduct, for to use power to enforce such a view is an abuse, that the Commentary was produced.

 It has been pointed out to him that his fiduciary duty requires him to act for the pensioner.

It raises the possibility that a failure to correct on notification of error, may be taken to have become a policy to withhold a lawful entitlement which, in this case, would be to compound a 16+ year breach. The sequellae may not be limited to damages for breaches of Contract to pay the pensioner the lawfully prescribed pension, but may well be taken to be an arbitrary, and oppressive abuse of power; so subject to exemplary or punitive damages. 

In Divisional Officer Burns’s (Rtd) case, whatever the APP may be, he cannot be paid more than 40/60^th.

In correction the formula to be used in terms of 60ths enhancement is specified by rule B3 of Part 111 of 1992 S.I.No:129 as:

(7 x A) + (A x D) + (2 x A x E)

   60           60              60

‘A’ is the average pensionable pay (APP) which ‘could’ have been earned by compulsory retirement at 60, or 6 years and 149 days longer in service

[6.492 yrs.]

‘D’ is the period in years of his pensionable service up to 20 years

[20]

‘E’ is the period in years by which his pensionable service exceeds 20 years

[13.52] (2 x E= 27.04)

Mr.Burns’s total counted 60ths (including 7/60ths “enhancement”) = 53.532,

The 60ths Formula is clear and simple – supra. And no less clear is that once the figure exceeds, as 53.532 does, 40/60ths it is of no account and so his 60ths enhancement is limited to 40/60ths of his APP.

But the point at issue, and ignored by the Pension Provider, is not the formula (supra), per se, but the APP taken by the Pension Provider as the correct APP to apply to any calculation.

The Pension Provider calculated the pension as a voluntary early retirement Rule B1 pension, and so, on an APP based on pay being actually received at the time of retirement. This was and remains incorrect. The legal requirement was to calculate an APP as it would have been at the time of retirement, had Mr. Burns served full time – to give a “notional pension”.

The “notional pension” APP projection is arrived at by simply answering the question, “What ‘could’ Mr.Burns have expected as his APP – based on the projection of current rates – had he served his full time out?”.

 It is a projection forward to capture a future loss. It requires no more than to take into current account the scheduled increments and promotions that Mr. Burns ‘could’ reasonably have expected; had he continued to serve until June 2003, his retirement date “on account of age”. The word used more than once in its direction by the Government at the time was ‘could’. It was still the law in January 1997 when Mr. Burns was compulsorily required to take a Rule A15 retirement.

 Mr Burns’s correct ill-health pension would have been his Notional Pension, based on the actual APP (at time of Rule A15 retirement) of the rank and earnings it would have been thought, at the time of actual retirement, he ‘could’, but for ill health, have achieved at his expected career zenith at retirement on ‘account of age’. This APP ought to then have been projected forward (on known pay scales and historical data to give index linking) from the time of his Rule A15 retirement, 6.492 years – the relevant period – to arrive at the correct APP on which to calculate his ill-health pension.

Thus, the miscalculation of his APP is where the error arose, and it could only have arisen by ignoring the Practice Direction given to all Pension Providers by the Home Office. It was wrong at the time and Mr. Warren’s denial subsequently was, and remains, wrongful.

Due to his length of service, Mr. Burns’s ill-health pension (as calculated on the formula supra) will exceed his notional pension, so the Notional Pension is payable. But his Notional Pension is not his Rule B1 pension, but 40/60ths of his projected APP.

In conclusion.

 1. Where a liability is accepted for an injury caused (here by the Government for ‘a qualifying injury’, that being one suffered in the line of duty), under English Civil Law pecuniary damages are prescribed as our only means of compensation. Here, the damages are computed by the S.I. to avoid endless litigation, but are computed to serve the same purpose as damages – to award a sum to put the injured person, in so far as money may, in the position they would have been in, but for the injury.

 2. Computation is a matter of applying Rules. In such a countrywide scheme, it is paramount that everyone interprets the Rules in the same way. This requires direct and clear guidance so that clerical staff may be in no doubt as to what is required of them in their application of the Rules. The Home Office issued a practice guide to the Rules, a voluminous Commentary(431 pages) – a clear, simple, voluminous and comprehensive work authored, published and distributed by way of a 1992 Home Office Commentary, to all authorities required to operate the 1992 S. I. No: 129: the Firemen’s Pension Scheme Order.  

 3. There is just the one S. I., and just one Home Office Commentary to apply to Mr. Burns’s pensions – the 1992 Home Office Commentary. No subsequent amendment was given retrospective effect. Denial of a pensioner’s legal rights to payment of full pensions entitlements is a serious breach of, at least, fiduciary duties. The law changed in 2006. Any guide to that change (The 2008 DLGC Guide) has no application to the 1992 – 2006 pensioner drawing pensions under the 1992 S. I. No: 129.

 4. It was, and remains, illegal in respect of all pensioners whose pensions were calculated pursuant to the 1992 S. I. No: 129, until amended in 2006, to pay any pension calculated as a voluntary Rule B1 pension retirement rather than the higher Rule B3 Ill-Health Pension prescribed by the Scheme. To knowingly do so would be to commit, at least, the criminal offence of ‘misconduct in public office’.

5.  In correction the underpaid pensioner is entitled to damages in the sum of all sums outstanding, compound interest thereon at the rate of 8% pa, and a sum in compensation for wrongful deprivation of legal entitlement over the period. All Mr Burns’s pensions and gratuities will, accordingly, require recalculation.

Burden of proof. There is no burden of proof on Mr Burns in any respect, it being for the Pension Provider to act in its fiduciary capacity to ensure Mr. Burns is fairly treated. And in so doing to have in mind that within the Fire Service any Officer being so retired will, if promotion is in question, be likely to be given the benefit of any doubt, so ‘could’ is not to be taken as at any higher value than ‘could’, which expresses ‘possibility’ which is below ‘probability’. In terms, ‘could’ has to mean an ‘unquestionably self-evident fairness’ in arriving at the notional APP. The slightest doubt being resolved in the pensioner’s favour. This may go to promotion rather than set increments.

Criminality. It is prima facie fraudulent for any FPS Pension Provider to seek to maintain, to any pensioner, that the 2008 DCLG rules are those to be applied to a pension becoming payable in 1997. The Commentary to apply is the one published by the Home Office in 1992 which applied through to closure of the Scheme in 2006. 

 It is not for a public servant to seek to defend an error by concealing and/or misrepresenting the law. If the public servant knowingly so misrepresented the law, their conduct is undoubtedly ‘malfeasant’ and a serious matter of criminal intent. Mere concealment takes the conduct far outside anything acceptable within the Localism Act 2011, Codes of Conduct which Local Authorities, Members, and their servants or agents are required to abide by in the performance of their duties.

If there is misconduct it continues until corrected. Any delay, particularly when dealing with those enjoying the autumn of their lives, may well sound in damages.   

John Copplestone-Bruce

Inner Temple

June 2013.