Court of Appeal rules against ITV in pensions anti-avoidance case


The Court of Appeal has refused an appeal by television broadcasting organisation ITV, which sought to challenge additional evidence submitted by The Pensions Regulator (TPR) in a long-running pensions anti-avoidance case.

The Court of Appeal has agreed with an Upper Tribunal decision in 2016 to allow TPR to submit new evidence in its anti-avoidance case against the Box Clever Group Pension Scheme.

Box Clever, which was formed in 2000, was the result of a merger between television rental organisations Granada (now ITV) and Thorn, now known as Carmelite. Prior to the organisation’s collapse, employees affected by the merger were transferred into a Box Clever pension scheme when they moved to the new organisation. This was to ensure that staff received the same benefits they would have gained from their previous pension arrangements. The Box Clever pension scheme currently has approximately 2,800 members, and a buy-out deficit of over £90 million.

TPR opened anti-avoidance action in December 2011, to issue financial support directions (FSD) to five organisations that form part of the ITV Group. The FSDs required the organisations to propose how they would financially support the Box Clever pension scheme.

ITV originally referred to the Upper Tribunal in January 2012 to question TPR’s determination to issue FSDs in this instance. The broadcasting organisation then challenged TPR’s ability to submit additional evidence to the anti-avoidance case in 2013. Both the Court of Appeal and the Upper Tribunal have ruled in favour of TPR and refused ITV permission to appeal.

This latest ruling confirmed that TPR is not bound by the original case it presented to the Determinations Panel, but that it is entitled to raise matters not previously raised where a determination is referred to the Upper Tribunal.

The hearing to examine TPR’s decision to issue the FSDs is scheduled to start on 29 January 2018 and is expected to continue for two weeks.

A spokesperson at ITV said: “ITV has never participated in the Box Clever scheme and has had no control over the growth of its deficit.

“ITV believes strongly that there will be cases in which it is appropriate for the regulator to use its powers, but equally strongly that Box Clever is not one of them, and that the case against it is wholly unmeritorious. The tribunal previously stated in its judgment that the regulator has not alleged, and does not allege now, that there was anything improper or negligent about ITV’s conduct. Yet ITV is being pursued for unquantified sums in relation to a transaction that took place 17 years ago, before the regulator ever existed, and before the current powers it seeks to evoke were even on the statute book.  ITV has defended the case robustly over the last six years and will continue to do so.”

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Mike Birch, director of case management at TPR, added: “It is vital for us to be able to introduce new evidence where appropriate when we are pursuing anti-avoidance and so we welcome this latest important ruling. The ruling also brings closer the prospect of greater certainty for members of the Box Clever Group Pension Scheme which due to legal challenges by ITV has been delayed for six years.

“We have fought at every stage to bring our case for an FSD and are pleased the courts have agreed with our position. This sends a clear message that we will not shy away from pursuing regulatory action to protect workplace pensions.”