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Pension disputes and pension litigation

What are pension disputes?

Issues arising from pension schemes are common and will often involve employers, trustees, pension professionals, members, insurers and industry bodies. These types of disputes can arise as the result of an issue or disagreement with a personal pension, private pension, workplace pension, or public service pension.

When to consider pension litigation

Before proceeding to pension litigation, parties should first make their complaint or dispute using the Pension’s Ombudsman Service, which is free of charge. They can also provide assistance to those wishing to make a complaint regarding a decision made by the Financial Assistance Scheme or the Pension Protection Fund. The Pension’s Regulator may also be used for resolution of internal disputes.

pension disputes and pension litigation

If parties are not satisfied with the outcome of their dispute using the services listed above, they may wish to contact a law firm with a specialist pensions dispute team to assist.

Like many financial issues, pension disputes can be highly complex. Specialist expertise is required to navigate them effectively. Nevertheless, litigation is sometimes the only way to resolve dispute. Most solicitors will attempt pension dispute resolution outside of the courtroom; however, this is not always possible.

The challenges of disputing your pension

Thanks to the Pensions Act 2004, the new Pensions Regulator and the introduction of the Pension Protection Fund, this area of litigation is more complex and challenging than ever before. Sponsors and trustees need to understand a complex web of regulation and legislation and for any pensions litigation you need an expert eye to work out the key detail.

Need advice regarding a complex pension dispute? Let us put you in touch with one of our pension litigation solicitors here who can advise you on the legal funding options available to you.

Types of pension disputes

There are a number of types of pension disputes arising as the result of a range of issues. Some of the main types of disputes that pension dispute solicitors can assist with include:

  • Public sector pension schemes
  • Pension liberation schemes
  • Member claims and complaints
  • Claims arising due to errors in scheme documents
  • Claims against professional advisers
  • Court applications for directions on the proper running of schemes and High Court appeal
  • Complaints against the Pensions Ombudsman
  • Disputes between Small Self-Administered Scheme administrators, trustees and members
  • Internal dispute resolution
  • Data loss claims
  • Defending and challenging trustee decisions 

Funding pension disputes

Whether you are defending a pension dispute, or a solicitor acting for the trustee, it is important to consider your options for funding this type of claim.

After the event insurance (ATE Insurance)

After the event legal expenses insurance is perhaps best thought of as similar to a ‘swap’. For either no upfront fee or a small upfront fee, the insurer takes on all of the risk of the potential adverse cost award. Therefore, the client has swapped their obligation to pay the defendants in the event of a loss with the obligation to pay the insurer in the event of a win.

This is generally an attractive swap as the client is likely to be in a better financial position following a win than following a loss. Also, the payment to the insurer will only be a percentage of the adverse costs rather than the whole amount.

The actual amount the client will pay for the insurance will depend on how long it takes to settle the case. An early settlement could mean that they pay as little as 15% of the amount insured. If the case goes to trial, it is more likely to be in the 40% to 60% range (depending on the insurer and the case). 

Third party funding agreements (TPF)

Third party funding is an arrangement in which someone with no prior connection to the dispute agrees to finance all or a part of the legal costs in return for a fee payable from the proceeds to be recovered. TPF can also be used alongside other available funding options, such as ATE insurance, conditional fee agreements and damages-based agreements.

With the help of TPF litigation, you can avoid taking any financial risks at all: the funder pays for everything in return for a share of the damages. If the case fails, the funder bears all the costs – you pay nothing.

Third party litigation funding providers take on the risk of your litigation finance, freeing up your cash flow and shifting all the risk off your balance sheet.

In return for taking the risk, the funder will typically seek in the region of a fifth to a third of any damages recovered. That means you keep up to 80% of the reward, having taken none of the risk.

How can Annecto Legal assist?

Annecto Legal helps clients realise the value of their pension disputes. We work closely with litigation funders, insurers and lawyers that seek alternatives to the traditional hourly rate funding model.

Get in touch with an expert member of our team to find out which litigation cover is the right litigation funding choice for you to reduce commercial litigation costs.

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