The UK Court of Appeal has ruled that the Brussels Convention 1968 article 13(3), which allows consumers to bring legal action in the courts of their own country in cases involving a consumer contract, applies in a case involving pension scheme members who claim they were misled into transferring their pensions to offshore schemes administered by a Gibraltar-registered company.

Issues of jurisdiction

This successful appeal comes after a previous High Court ruling in 2021 deemed that the Courts of England and Wales did not have jurisdiction to deal with these complaints.

While the dispute as to jurisdiction here is quite technical in nature, in essence, allocation of jurisdiction between Gibraltar and the UK is determined by reference to the Brussels Convention 1968 and this continues to be the case following Brexit. The parties were at odds as to whether the interpretation of the Brussels Convention 1968 allowed them to bring their claim in the UK given the scheme was administered by a Gibraltar-registered company (although the members themselves were all domiciled in the UK). Ultimately, the investors were held by the Court of Appeal to have overcome the stringent requirements of the regime and were allowed to bring their claim in the Courts of England and Wales.

There are no further details yet as to whether there will be a further appeal over the matter of jurisdiction, or when the substantive case will be heard (assuming there is jurisdiction).


In the claim, 62 investors from the UK argue that they received negligent financial advice in 2014 when they transferred more than £10 million from defined benefit occupational pension schemes to investment funds administered by Castle Trust Management Services (CTMS), a company based in Gibraltar. Here, the claimants are alleging that they were wrongly advised by their financial adviser to invest in unregulated collective investment funds, which can be highly speculative, illiquid investment schemes that carry a “significant risk of loss”. The financial adviser itself was an unregulated Cypriot intermediary that had commission arrangements in place with CTMS whereby they would be paid a fee for each successful transfer to CTMS. The Court of Appeal found that the High Court had erred in not finding that CTMS should be held responsible for the acts and omissions of the financial adviser, on the basis of joint wrongdoing and/or a principal-agent relationship.


The investment funds were considered a Qualifying Recognised Overseas Pension Scheme (QROPS). A QROPS is a type of non-UK pension scheme that is recognised as such by the UK government and therefore allows individuals to transfer their UK pension funds to applicable overseas pension schemes without incurring any UK tax liabilities on the transfer.

To be a QROPS, a scheme must satisfy a number of HMRC tests, including: (i) being registered with the relevant country’s tax authority as a pension scheme; (ii) being regulated by a pensions scheme regulator in the relevant country; and (iii) only making payments to members under 55 years of age if they have retired because of ill health (mirroring UK rules). The QROPS can also be a trust-based occupational pension scheme or an insurance-based product. There are several benefits to transferring a UK pension to a QROPS, including the ability to have more control over investments and potentially more favourable estate planning options than would be allowed under UK rules. However, there are also risks associated with QROPS, including the possibility of fraud or mismanagement.

It is important that members are aware that the list of QROPS published and updated by HMRC, which can be found here, is a list of schemes that have self-certified to HMRC that they meet the relevant conditions. It is not (and never has been) intended to be a list of overseas schemes that are endorsed by HMRC. A QROPS can therefore very much still be a “scam”, with HMRC regularly de-listing schemes it considers to be scams (although scams are not the only reason why schemes can be de-listed).


It is not uncommon for people to want to transfer their pension funds to another pension scheme, including a QROPS, in order to have more control over their investment options. However, it is important that financial advisers properly assess a person’s suitability and provide accurate information about the risks and potential rewards of such a transfer (particularly where the transfer is from a defined benefit to a defined contribution scheme).

The issue of pensions scams is nothing new and is on the radar of both the Pensions Regulator (TPR) and the FCA, with TPR recently unveiling its plan to fight scams and the FCA regularly publishing material (such as this leaflet) to help people to spot the signs of a pension scam.

In conclusion, this case serves as a reminder that the UK courts can have jurisdiction even in cases involving offshore pension schemes. It also highlights the importance for trustees, pension managers, administrators and financial advisers to consult with both the TPR guidance on dealing with transfer requests and the FCA guidance on pension transfers when checking, proceeding with and refusing transfer requests from scheme members in order to protect them from fraud or mismanagement.