OPINION

Mr. Rattigan, A Pensions Senior Investigator (but not I think a qualified lawyer) has expressed the tentative opinion, adopting the lay pension provider’s view, that Mr. Burns, a ‘Divisional Officer – Ops’, compulsorily retired on qualified ill health 6.5 years before he would have been required to retire on account of age, was awarded a correct pension of 40/60 of his APP at the time of his retirement.

This is the pension he would also have received had he been taking early retirement by choice. There has been no suggestion that it contains any element of compensation for lost career earnings or pension.

The pension provider calculated the pension awarded by the application of the formula which the pension provider saw fit to apply and not to vary on the grounds that, in his view, the Rules were being correctly applied.

Mr Rattigan gives as his reason for not agreeing with my earlier Opinion, in which I found the pension provider was wrong to award an ‘Ordinary’ Rule B1 pension under guise of an ill health pension, because nowhere within the 1992 SI 129 is it stated that an APP can be varied, as it would have to be to increase the pension award. I agree – it is not so stated.

Certain things are axiomatic in carrying out the law. People are presumed to know it and to imply what is axiomatic to the legal premise. Put another way, to know and imply what, if not implied, denies the provisions affect.  Though one may not be told that a man wearing shoes has feet we imply that he does.

The best approach to this may be to ask the question.  Can the legislation’s provisions be given effect without variation of an APP being implied? But more simply – legislation is presumed at law to have meaning. If the meaning ascribed defeats the purpose of the legislation then the wrong meaning is being given.  To avoid this, Government Departments, whose legislation it is, sometimes issues guidance on the how the legislation is to be understood and applied.

In this instance the Home Office produced 1992 SI 192 and an accompanying Home Office Commentary – in effect a guide to the interpretation given to the laymen whose task it was to implement the  provisions.  A guide may not ‘make law’ but Court will always take such guidance as the contemporaneous note and best evidence of intent. Correspondence makes plain that the pension provider was not guided by the Commentary, in 1997, or subsequently, and Mr. Rattigan does not refer to it.

It maybe not be an entirely irrelevant digression to note, from the wording that the Commentary,  that what was intended to be guidance available to all those retiring,  was not known to exist by Mr. Burns, a senior officer to whom others would look for guidance.

The guidance given by the Commentary is clear:

At Rule B1-2 ‘your maximum ordinary pension of 40/60ths of your APP will be earned in 30 years. If you serve longer you cannot earn more 60ths, but your APP may increase to make your pension bigger. But,

At B3-2 In answer to ‘how much is your pension?’ the answer is given  ‘never more than 40/60ths(2/3rds) of APP, or what you could have earned by compulsory retirement’

This answer, in the alternative, is that whilst time is not variable, the APP is. This implies a variable APP. The words used assume this to be self-­‐evident.

The pension provider does not wholly eschew implication when it suited his purpose. There is no authority to cap all awards by 2/3rds of actual APP. He wrongly caps the paragraph 4 calculations. If the purpose is to compensate, as a judge would, in awarding damages for consequential financial loss, then the whole basis of future loss is never ever other than speculative. On that basis the pension provider is patently wrong to apply a cap if to do so denies the legislation the legal effect to fully compensate for financial loss occasioned and consequential to loss of career. This sort of intricate legislation requires careful and accurate consideration.

The question becomes not so much what, on the mere face of it, any wording may be taken to mean by people of varying degrees of education, and experience, but rather is the guidance right? Is “…or what you could have earned by compulsory retirement age”, to be taken, by legal implication, to require and apply a speculative APP somewhere within the ill health provisions, specified by 1992 SI 129?

The fundamental answer is to be found in discerning what the intention of the primary legislation was. It can then be determined whether or not, the pension provider has frustrated its intention by misinterpretation of its daughter SI’s provisions? If so, the wrong meaning has been given to the legislation. If so it needs to be corrected.

The SI is subsidiary legislation framed to give effect to the intentions set out in its enabling legislation, The Fire Service Act 1947 (as amended).

At Sec 26 (2) (i) it enabled the Home Secretary to make provision for excluding or modifying, in the case of an injury in respect of which an award is made under the Scheme, being an injury sustained in the execution of duty in such circumstances as may be specified in the Scheme, any other right against the Crown or other authority in whose employment the injury occurred to compensation or damages in respect of the injury or the consequences thereof, so however that no provision made by virtue of this paragraph shall affect any right under the social security provisions.

In a nutshell, the 1947 Act intended to avoid litigation and maintain goodwill and morale by making material further provision to so compensate in  ‘in respect of injury or the consequences thereof’ as to make legal recourse unnecessary. The 1992 SI gave effect to what concerns Mr. Burns.

The Scheme was never there to deny compensation but was intended to provide at least the same level of compensation or damages as a judge would award and so avoid endless litigation and ill will.

It did not, as the pension provider has been using it to do, restrict the Citizen’s constitutional rights to the benefits of common law by avoiding damages from injury. Crown immunity had disappeared when the position was drastically altered by the Crown Proceedings Act 1947, which made the Crown (when acting as the government) liable as of right in proceedings.

The raison d’etre of the Fire Service Act 1947 act was to avoid litigation by assuming the unavoidable burden carried by any employer who knowingly put their servants or agents, in the course of their employment, into harm’s way -­‐  res ipsa loquitor negligence. Though a fireman who was ‘reckless’ may forfeit his award – in that case, on lack of agreement,  the matter may have had to go for trial for a judge to have decided to what extent his injury was his fault. It was a moderately generous scheme in giving  full credit for lost career, where a judge may only award so many years purchase of a speculatively lost future salary. But here, fit men and women required to pass a medical every year, were being retired early on being injured.

With it being unarguably wrong to cap pension to artificially avoid compensation, as done here, the Firemen’s Pension Scheme Order 1992 SI 129 has to be reconsidered to understand it as intended. Most of it is not germane, but what follows is:

Rule A13 Specifies Compulsory retirement on account of age,

(a) if he holds the rank of assistant divisional officer or a higher rank, on attaining the age of 60, or

(b) if he holds the rank of station officer or a lower rank, on attaining the age of 55.

And In special cases the fire authority may extend the service of a person to whom this rule applies for a further period if they were satisfied that such extension would be in the interests of efficiency.

Part. G specifies that average pensionable pay is a regular firefighter’s pay during the year ending with his last day of service as a regular firefighter.

Sch2 PART I Specifies Personal Awards:

-­‐ Rule B1 specifies an ordinary pension to 30 x A/60 + 2 x B x A/60 where— A is the person’s average pensionable pay, and B is the period in years (subject to a maximum of 5 years) by which his pensionable service Exceeds 25 years. In effect this caps a Rule B1 pension. A Rule B3 ill health pension excludes a Rule B1 pension.

-­‐  Rule B3…specifies the amount of an ill health pension and stipulates:

1.  (1) Paragraphs 3 and 4 have effect subject to paragraph 5. [In plain English 4 is payable if 5 is not]

     (2) In paragraphs 2 to 4, A is the person’s average pensionable pay. [But not necessarily the same APP in 5]

4.  Where the person has more than 10 years’ pensionable service, the amount of the ill-­‐health pension is

7 x A/60 + A X D/60 + 2 x A x E/60

Where—

D is the period in years of his pensionable service up to 20 years, and

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

5.  Introduces the concept of a notional pension.  This needs to be calculated for comparison. When that is done then it can be seen that the amount to be paid as pension is dependent on context. The pension provider was wrong to so construe meaning as to always make a time served Rule B1 the ill health pension.

Rule B5…defines at (2) A person’s notional retirement pension as A x E/60 + 2 x A x F/60 where— E is the period in years of his notional service up to 20 years, and F is the period in years by which his notional service exceeds 20 years – until 60 here.

The A is a notional amount of what the APP could have become at 60 (save for the effect of 5 (2). – yet to be considered.) In some circumstances the paragraph 5 notional APP may be no greater. The paragraph 4 APP.

In applying Mr Burns’s earnt £35,000 APP to paragraphs 2 to 4, his 33.5 years service, with 6.5 years to serve (to complete 40) one can see that:

The Rule B1 pension is 30 x £35,000/60 + 2 x £35,000 x 5/60 =  £23.333.

The Rule B3 pension is   7 x £35,000/60 + £35,000 x 20/60 + 2 x £35,000 x 13.5/60  = £31,500 The notional pension, per pension provider, is £35,000 x 40/60  + £23,333.

The pension provider denied Mr. Burns his ill-health pension of £31,500 by arbitrarily capping it with the  lesser  sum  of  2/3rds  of  the  £35,000  APP – ostensibly  to  give  Mr  Burns  a paragraph  4  Rule  B3 pension, but in fact, the lesser Rule B1 £23,333 pension due to someone voluntarily choosing to retire early – so suffering no loss. It was wrong to do this.

There is not a shred of authority in the SI, or anywhere else, to apply 40/60th to a paragraph 4 calculation, which is simply an amount until subjected to paragraph 5 provision – when that amount may, or may not, become the amount of the ill-health pension legal entitlement.

The paragraph 4 intention is for a Rule B3 pension to be an enhanced pension well above any actual Rule B1 because it is compensating, in so far as money may do so, for the loss of what could have been earnt but for premature enforced retirement. In addition, the loss in increased pension can be substantial.

Finally, the pension Provider avoids any higher pension than a Rule B1 by saying that in any event what paragraph 5 is to be taken to mean is that the smallest pension is paid – here  £23,333 which denies the purpose of the act and renders Pt. III ill-health pension provision, in so far as paragraph 4 and 5 are considered, meaningless and pointless. Were the pension provider’s view tenable the legislation would have provided “on serving more than 10 years an ill-health pension shall be the Rule B1 pension” but it did not.

There is a final point to be made. I have placed the various figures in close proximity to illustrate that, as applied by the pension provider, the notional paragraph 5 pension will always be smaller than the paragraph 4 Rule B3 pension. The notional pension is a Rule B1 pension. If one compares the notional paragraph 5 Rule B1 pension with the actual paragraph 4, Rule B3 pension they are, in terms of   formula, one and the same except the Rule B3 is enhanced by 7 x A/60. It can only be higher.

As the pension provider does it, it leads to a reductio ad absurdum:

• A Paragraph 4, Rule B3 pension will always be greater than the notional paragraph 5 pension.

• It follows that the paragraph 5 comparison is pointless in law.

•  Yet with the Rule B3 pension limited to 40/60th of the £35,000 APP.

•  It follows that there is no legal point to a paragraph 4 calculation.

•  It follows that the only ill-health pension paid is the basic Rule B1 due on retirement by choice.

On any basis, even on a misunderstanding of the Paragraph 5 notional pension, the Rule B3 £31,500 pension should have been paid.

However, the legislation does have to be given effect.

What has to be grappled with is the idea of a ‘notional’ pension. The pension provider and Mr. Rattigan have said ‘but look at paragraph 5 (2) which means that the APP to be used in calculating a notional pension is the earnt APP (here £35,000) and since no more than 40/60ths can be earnt; the notional pension is limited to that sum, £23,333.  But that renders meaningless the word ‘notional’ – which is not what the legislation intends.  A Rule B1 whole service pension is, and can be no more than 40/60 x APP. If the APP is fixed too,  then the pension is not, and can never be, ‘notional’ for anyone with more than 10 years service.

A  Notional  Pension  is. 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 pension”) …. it continues but it is convenient to consider thus far before going further.

What this means could not be clearer.  A Rule B1 full time served pension limited to 40/60ths has to be calculated. Since no more than 40/60ths can be earnt and is fixed what makes the pension ‘notional’ is  the other element, the APP.  Where a person serves on in a successful career they may often rise in rank, especially if not passed over. A Divisional Officer – Opps [Mr. Burns] is in the career promotion stream, whilst a DO ‘Training’ or ‘Safety’ are often less ‘front line’.  What is required here is to ‘imagine’ (the law takes its definitions from the Shorter Oxford English Dictionary, SOED, and to ‘speculate’ as to what Mr. Burns could have achieved in the final furlong of his career.

Let it be, for the purpose of this Opinion, that he is credited with reaching Assistant Chief Officer (ACO). What is his notional pension?

The SI provides at 5 (2) ‘The notional retirement pension is to be calculated by reference to the person’s actual average pensionable pay’. This is not the same as ‘A is the APP’ because the word ‘reference’ has meaning. SOED ‘reference’  -­‐ at  8  -­‐ ‘basis for comparative measurement or standardisation’ (Word/Tools, ‘identifying code’, ‘orientation’, et al). So by requiring all calculation to be referenced to Mr. Burns’s APP simply means that whatever rank Mr. Burns could have notionally attained by 2003, its APP is not any APP inflation projected forward from 1996 may give, but is the actual APP of the rank in 1997, when Mr, Burns was retired early on ill-health. The error the pension provider made and continues to make is to wrongly conflate (mix, put together, give common meaning to) ‘A is APP’ with ‘by reference to actual APP’.  It can only be done by avoiding guidance given by the Commentary.

An ACO’s Rule B1 pension would have been c£ 40/60th of £62,959 or £41,973.

For further illustration if Mr. Burns had notionally retired on one promotion to SDO with a 3rd year increment + 20% pensionable flexible duty supplement allowance payable on an APP of £41,886, his notional  Rule B1 pension would have been £27,924.

For the purposes of working to a conclusion, Pt. III distinguishes the paragraph 4 Rule B3 pension as an ‘ill -health pension’ from the alternative  under Paragraph 5; the Rule B1 pension is called  ‘the  notional pension’ but both remain in law, at this stage, notional in search of legitimacy. To that end  the final  step in arriving at a single notional pension pursuant to paragraph 5 is to compare contenders to settle which is the greater :

(i). £31,500 Rule B3 or Rule B1 £27,924. – para 4/SDO, or (ii). £31,500 Rule B3 or Rule B1 £41,973. – para 4/ACO.

Only one can be greater. It is the only amount left, but it remains notional until converted into a legal entitlement, as a judge may have awarded  damages, but for S26 of the Fire Service 1947 Act.