The High Court has approved a settlement in relation to the appeal case brought by British Vita, which was due to be heard on 11 December 2007. By way of a quick reminder, the case concerned British Vita, which was the principal employer of two schemes and which went to court last year to challenge the validity of demands for contributions made by the trustees of those schemes.

Due to the timing of the relevant scheme valuations upon which the trustees’ demands were based, the relevant funding regime was actually the old MFR rather than the new scheme specific regime introduced by the Pensions Act 2004 (subject to various transitional provisions). In the original judgment of the case back in April this year, the High Court held that the MFR did not override an otherwise valid demand for contributions made by trustees under the relevant scheme rules. In the absence of a contrary appeal judgment, that decision now stands. On the facts of the case, the court did not need to address the wider question of whether its decision would have been different had the new scheme-specific funding regime applied to the British Vita schemes.

We had hoped that an appeal judgment would provide some welcome clarity on this point both from the perspective of trustees and scheme employers, but that is not now to be the case. The judge in the original case was sympathetic to the idea that the new scheme funding regime did not prevent schemes funding to a level higher than its technical provisions if scheme rules so permitted, but it looks as though we will have to wait for another case to be brought before the courts for the position to be put beyond doubt.