In Charles Frederick Webster v Sanderson, the Court of Appeal held that a pension scheme member, in his personal capacity, could not claim for losses suffered by the pension scheme.
In this case the claimant accused the defendant of negligence and sought to, among other things, recover damages for losses suffered by the pension scheme. The claimant was the only surviving beneficiary of the scheme and a trustee. He acted in his personal capacity and not as a trustee of the scheme.
The trustees of the pension scheme had also initiated earlier (and separate) proceedings against the defendant. But this would be stayed if the claimant succeeded in the current proceedings.
Lord Clarke MR held that:
- “if there is a cause of action against a third party for causing loss to the trust fund, it is vested in the trustees for the time being. It can be asserted by them and, normally, only by them”;
- “exceptionally, if the trustees fail to pursue such a claim, it may be open to a beneficiary to assert the claim in proceedings to which the trustees are also parties as defendants”;
- “the claimant does not say that the trustees have failed to bring proceedings, and indeed he has in fact brought separate proceedings in his capacity as one of the trustees, together with the other trustee”;
- “a beneficiary under a trust does not have a direct cause of action in negligence against a person who may be liable to the trustees”; and
- therefore the claimant “cannot claim the pension fund losses as such in these proceedings because he does not sue in his capacity as a pension fund trustee, he has not joined the other trustee as a party, and he has not alleged (and could not do so) that the trustees have failed to bring their own proceedings”.