"Change of position" defence article banner image

In the recent case of Webber v Department for Education, the High Court has partially allowed an appeal against a determination of the Deputy Pensions Ombudsman that had rejected a complaint by a member of the Teachers’ Pension Scheme about the recovery of overpaid pension installments dating back to 2002.

The member had taken early retirement and then been re-employed a few years later. He had informed the scheme administrator when he was re-employed, but maintained that he was not aware he was obliged to tell the administrator about subsequent salary increases that triggered statutory abatement provisions. He argued he had changed his position to his detriment in reliance on the overpayment through one-off and repeated expenditure. He also sought to rely on a limitation argument arising from section 32 of the Limitation Act 1980, which requires a claim for relief from the consequences of a mistake to be made within six years of the date a person could with reasonable diligence have discovered the mistake.

The court upheld the Deputy Ombudsman’s ruling on change of position, holding that if a person appreciated that a payment he was receiving may be an overpayment and could make a simple enquiry to check whether this was the case but chose not to do so, it would be inequitable to allow him to rely on a change of position defence.

However, the court allowed the member’s appeal on limitation. Since the complaint had already gone back and forth between the Ombudsman and the High Court on two previous occasions, the judge declined to remit it back for reconsideration a third time. He found that the scheme administrator could with reasonable diligence have discovered the mistaken overpayments earlier. An element of the claim for recovery was therefore statute-barred, although the administrator was entitled to claim for overpayments made in the six years before the member filed his initial complaint with the Ombudsman.

Chris Harper is a partner and head of the dispute resolution team in Exeter. He specialises in commercial litigation and is named as a leader in his field by independent guides to the legal profession Legal 500 and Chambers. To contact Chris please call 01392 210700 or email drx@stephens-scown.co.uk.