The recent High Court decision in Capita v Zurkinskas is the latest stage in the long running Sea Containers case. The trustee and employers applied to the High Court approve a compromise of some outstanding issues arising from sex equalisation.

Click here for the full judgment in Capita v Zurkinskas  

Two main points arose in relation to the PPF:  

  • The first was whether the compromise was in effect a “rule change”, meaning that the PPF could disregard it if the Scheme were to commence an assessment period within three years. The court held that it might well be a “rule change” as defined in the legislation – but would be excluded on the basis that the settlement was required or reasonably necessary to comply with legislation. This means that the settlement will stand if the scheme enters the PPF;  
  • The second issue was the extent to which the PPF should be involved in the litigation. The scheme is not in an assessment period and the proposed compromise did not fall under the circumstances set out in the PPF Entry Rules under which the PPF can have an involvement in certain types of settlement. The trustees had written to the PPF with details of the proposed settlement. The PPF responded that it did not have the statutory power to intervene in these circumstances and has no general pre-approval or clearance process. It confirmed that the PPF’s approach to scheme’s not yet in an assessment period “is not to participate unless an issue of general application arises”. In the PPF’s view, no such issue arose in this case.  

Also of interest is the manner in which the settlement figure was reached. Very broadly, the amount payable under settlement was worked out on the basis of the full value of each claim and then a percentage reduction was applied based on the chance of success if the matter were to go to full hearing. The High Court accepted that this was a suitable basis for compromise.