A judicial review over the government’s proposed method of paying for costs incurred by the McCloud judgment in relation to public sector pension schemes has been dismissed by the High Court.

The case related to the McCloud ruling, which found that the 2015 changes to public sector schemes that saw younger members transfer to a new and worse scheme, while older members remained in the existing and better scheme.

It was brought by the FBU and two named claimants, although the British Medical Association’s (BMA) claim was heard together with this due to overlap.

In its claim, the FBU argued that the government was attempting to “shift” the estimated £17bn that it is going to cost to reverse the changes onto members of the new, post-2015 public sector schemes, warning that this could leave younger scheme members to meet the cost of the McCloud remedy.

However, the case was dismissed after the Judge, Justice Choudhury, concluded that the legal bases on which the claims was brought were not made out.

In particular, Choudhury ruled that the wording of the Public Service Pensions Act is wide enough to allow directions to be made passing on the McCloud cost to members, stating that the purpose of the cost control mechanism (CCM) is to control the cost of the new schemes; McCloud is such a cost.

Although the FBU had also raised concerns around statements made by ministers that only member costs would be factored in the CCM, Choudhury found that these statements were not sufficiently clear and unambiguous.

In addition to this, the ruling suggested that the class to whom any statements were made was too large, and even if promises had been made the government was justified in breaking them because of the "sheer scale" of the cost.

Choudhury also ruled against the claim that the first judicial review was stymied, concluding that the 2021 directions did not have retrospective effect, and the draft valuations published in 2019 before the “pause” did not trigger the operation of the CCM.

In addition to this, the judge concluded that although the imposition of the McCloud cost did lead to some members being advantaged and others being disadvantaged, he concluded that the dividing line was not their age but the nature of the McCloud remedy itself.

The judgement stated: "The fact that those costs are the result of a finding of discrimination against the government does not of itself render it absurd or unconscionable for them to be taken into account, any more than might be an increase in costs that were the result of irretrievably poor economic policy choices made by government.

"Were that not the case then any additional cost would be subject to scrutiny as to whether it was an “acceptable” cost, in terms of its moral, political or economic legitimacy, to include. That, it seems to me, is not the purpose of the 2013 Act at all."

However, in a letter to union members, the FBU confirmed that it is now consulting with its legal team regarding any appeal, with further information to be provided following the conclusion of those meetings.

“As I am sure members are already aware, the majority, if not all of our pensions challenges against government have not been successful at the first hurdle but we have achieved greater success on appeal”, FBU national officer, Mark Rowe, wrote.

“To appeal the FBU will need to get permission, either from the judge or from the Court of Appeal. Whilst discussions continue with our legal team the Union has put in an application for permission to appeal on a protective basis, the application contains submissions setting out why we think the judgment is wrong.”

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