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Judicial Pensions (Fee-Paid Judges) (Amendment) Regulations 2021

Volume 810: debated on Tuesday 23 February 2021

Motion to Approve

Moved by

My Lords, this statutory instrument amends the Judicial Pensions (Fee-Paid Judges) Regulations 2017, which I will refer to as the FPJPS regulations, which established the fee-paid judicial pension scheme 2017, which I will refer to as the FPJPS. This statutory instrument broadly has three purposes: the first is to add eligible fee-paid judicial offices to the FPJPS regulations; the second is to make amendments consequential to adding these offices to the FPJPS regulations; and the third is to make various further amendments to those regulations.

Dealing with those in turn, the main purpose of this statutory instrument is to add further eligible judicial offices to the FPJPS regulations. To give the House an example, Part 2 of the statutory instrument adds the office of legal chair of the Competition Appeal Tribunal to the schedule of offices in the FPJPS. Until that is done, individuals holding these offices cannot be members of the FPJPS and cannot, therefore, accrue pension benefits under it, even though they would otherwise meet the eligibility criteria. Similarly, member pension contributions could not be deducted from their judicial fees. Currently, when the Ministry of Justice is notified that an individual in this situation retires, an interim payment in lieu of pension is made, but once these judicial offices are added to the FPJPS regulations the payments in lieu will become formalised pension payments.

The second element is the consequential amendments, contained in Part 3, which flow from the addition of these judicial offices to the pension scheme. These amendments ensure two things: first, that eligible service before this SI comes into force on 1 April 2021, and potentially as far back as 7 April 2000, can also count as pensionable service and pension contributions can be deducted in respect of it; and, secondly, these new members can complete certain actions in the scheme, such as the purchase of additional benefits, from their date of admission to the scheme.

Thirdly and finally, we are taking the opportunity of this SI to make some further necessary amendments to the FPJPS regulations. I will highlight three kinds of amendment. First, we explicitly set out the service limitation dates that apply for relevant judicial offices. This is the date from which reckonable service is taken into account for the accrual of pension benefits under the scheme. Service limitation dates represent the point in time when the appropriate salaried judicial officeholders had access to a pension under the Judicial Pensions and Retirement Act 1993 scheme, known as the JUPRA scheme. Following the 2013 judgment in a case called O’Brien v Ministry of Justice, we need to replicate that in the FPJPS. To give the House an example, service in the office of deputy adjudicator of Her Majesty’s Land Registry is eligible for an FPJPS pension, but only in relation to service in this office after 1 January 2009. Although these offices already fall under the entry in the FPJPS regulations of

“First-tier Tribunal Judge (where a legal qualification is a requirement of appointment)”

and the service limitation dates could be inferred, if one had the time and interest to do so, from various sources, such as the purpose of the existing regulations and litigation decisions, we consider it preferable for these dates to be clearly specified in these regulations, so that is what we have done.

Secondly, we have taken the opportunity to correct the service limitation dates, which are already listed for three judicial offices in these regulations, as they wrongly limit, by one day, the period of eligible service for these judicial officeholders. To give an example, the entry for

“Legal Chair Criminal Injuries Compensation Appeals Panel”

is currently limited to service in this office after 3 November 2008, whereas the correct date that the amendment records is 2 November 2008.

Thirdly, we have added the new names of two judicial offices already listed in the regulations. These are the Deputy Insolvency and Companies Court Judge, a position formerly known as the Deputy Bankruptcy Registrar; and the Deputy Master of the Senior Courts, formerly known as the Deputy Supreme Court Master.

Turning briefly to the consultations we have undertaken on these and related matters, I shall highlight three. In 2016, we issued a public consultation on the draft regulations establishing FPJPS and the responses were reflected in the final version of the regulations. The scheme commenced on 1 April 2017, with backdated effect to 7 April 2000. We have since undertaken further consultation exercises relating to the addition of eligible judicial offices to FPJPS. In the first of those two additional consultation exercises, in 2018 we consulted directly with judges of the First-tier Tribunal (Property Chamber) Agricultural Land and Drainage, as this office was not expressly mentioned in the 2016 consultation. We received four responses, which we considered carefully.

Secondly, from June to October last year, we consulted on adding these judicial offices to FPJPS as part of a wider consultation on amendments to the regulations on the inclusion of service in the scheme prior to April 2000. We received a number of responses, and the Government response to the consultation was published on 10 December last year. In addition, of course, we have kept the devolved Administrations informed of developments and have liaised specifically with officials from Wales and Northern Ireland regarding the offices whose jurisdictions are in those countries, reflecting their views accordingly.

I can reassure the House that this statutory instrument, which I accept is somewhat technical, is essentially a tidying-up exercise. We are not implementing any major changes through the statutory instrument, nor are we making any amendments to FPJPS with negative implications for judges. In fact, we are doing the opposite: we are enabling additional officeholders to become members of the fee-paid judicial pension scheme, something I know that both the judges concerned and my department are very keen to see happen. The key reason, therefore, for this statutory instrument is to add eligible judicial offices to the FPJPS regulations to enable those officeholders to become members of the scheme and to enable pension contributions to be deducted from their fees. I beg to move.

My Lords, I am grateful for the Minister’s explanation of the regulations. I am fortunate that in my political and professional career I never had to grapple with the problems of state pensions in any form other than the problems of constituents. I well remember as a young MP listening to Jim Griffiths, a former Secretary of State for Social Security and one of the architects of the welfare state, replying to a question challenging the universality of welfare payments. His reply was that while the aim is to cover everyone, there will always be a number, hopefully a very small number, who will fall between the cracks. He added that, to avoid the stigma of the means test, “Let the Duke and the dustman have the same benefits and tax them accordingly”. I mention this as, following the cases of O’Brien and Miller, this seems to be a very worthy attempt to correct injustices, and I suspect that quite a large number of people will benefit. Can the Minister give an estimate of how many potential cases there are, and what is the likely cost? That, I think, is crucial and was not mentioned in his speech.

My understanding is that every effort will be made to publicise eligibility and contact all retired fee-paid judges. I also presume that all payments will be backdated, and I welcome the useful provision to commute trivial payments. I have endeavoured all my ministerial life to avoid any conflict of interest, but the awful thought occurred to me late last night that as an assistant recorder from 1972 and then a recorder for many years, I might have a claim which I should have declared. I hope the Minister will be able to assure me that recorders or assistant recorders are not, in fact, covered. With those few words, I welcome the regulations, which seek to bring justice to an important class of people who served the state with distinction in a part-time judicial capacity.

My Lords, this SI was prepared by the Ministry of Justice. Its purpose is to make provision for the contributions payable to judicial pensions schemes from 1 April 2020. The territorial extent and application of this instrument is the whole of the United Kingdom.

When the JPS was established in 2015 and the FPJPS in 2017, the relevant member contribution rates and earnings thresholds were fixed for a set period: four years for the JPS 2015 and two years for the FPJPS 2017. During this period, the contribution rates remained unchanged and the earnings thresholds were updated yearly, except for the £150,001 band. By the end of the period, it was expected that rates and earnings thresholds would be reviewed in the light of the outcome of an actuarial valuation of both schemes.

Since then, the Supreme Court has refused the Government permission to appeal against the Court of Appeal’s decision in McCloud, and the matter has been remitted to an employment tribunal for consideration of how the difference in treatment should be remedied. We can all agree that this is the right way forward and that our judges perform the most important work in our judiciary system. Does the Minister agree that our judiciary members must receive their rightful pensions, regularly updated to deal with annual inflation?

My Lords, I must first declare an interest. As shown in the register of interests, I am the actuarial adviser to several trade unions with members in other public service pension schemes.

First, we must thank the Minister for his comprehensive explanation. I admire his ability to get the initials of the various schemes right, although I am a bit disappointed that he did not tell us why this happened. Let us spare the blushes of whoever was at fault, though.

These regulations are narrowly focused. However, they provide an opportunity to make a more general point: essentially, the value to all of us of having worth- while pension arrangements for workers in our public services. There is a strong case, as the lawyers here are likely to agree, for having good pensions for judges. Obviously, this needs to include all eligible postholders, so I welcome the regulations.

Perhaps we take the high standards of our judiciary too much for granted. Of course, these standards are due to many reasons, such as culture, training and so on, but in that mix should be the assurance that its members will have a comfortable retirement. I am not for one moment suggesting that our judges are in it only for the money, but we must be clear that we need to get judicial pensions right.

It is worth noting, therefore, that we are of course in the middle of a review of judicial pensions. The immediate cause was to address the situation produced by the McCloud judgment, but it is also clear that there was a particular difficulty caused by the tax treatment of judicial pensions. So, I hope that I am not pushing my luck too far but I wonder whether the Minister can give any indication of when an announcement about the outcome of the review will be made. Supposedly, the new arrangements are meant to come into force for benefits accruing from April next year, which suggests a tight timetable. Can he give us any information?

My Lords, I read these papers with considerable interest yesterday and realised for the first time, like the noble and learned Lord, Lord Morris of Aberavon, that I might already be entitled to a government pension. I therefore declare an inchoate interest.

I was appointed a recorder in 1975 and took the judicial oath. I sat as a recorder in Wales and Chester and, later, in the Old Bailey. There were two motivations: that it might be the first step to possible judicial preferment, as well as from a sense of public duty. It was not well paid and there were no thoughts of a pension. I should say that I later served on the Criminal Injuries Compensation Board.

There was a difference between appearing in the Old Bailey and sitting on the bench there. If you appeared as an advocate, you went in through the front door, in a queue of defendants and witnesses; your pockets were turned out, you were personally scanned and your bags were searched. If you went to the judges’ entrance round the back, the court usher seized your bags, led you to your room and produced a cup of coffee in fine china. You were then ushered into court by a sheriff of the City of London, in a blue gown with an enormous fur collar, surely provided by the Baltic Exchange. I would hold a nosegay, a posey with an 800-year history; it was necessary to keep from the nostrils the stench of the 12th-century Newgate gaol, which was originally attached to the Old Bailey. Of course, the gaol was demolished 120 years ago, but you have to support the tourist industry.

As a recorder, you were closely monitored by the Lord Chancellor’s Department, and I recall receiving a ticking off from its top civil servant for expressing some view mildly supportive of the civil rights movements in Northern Ireland in the 1970s led by Bernadette Devlin—not of course expressed in court but in a speech at a meeting of Welsh Liberals in Colwyn Bay, which was reported in the North Wales Weekly News. Newspaper cuttings were collected in the department on each person serving as a recorder, and I later discovered that my cuttings of Liberal insurrection had appeared in a colleague’s file, and it positively held him back. When I reached what would have been retirement age, I received not a pension but a one-liner from an official in the Lord Chancellor’s Department: “Dear Thomas, thank you for your services as recorder—you have reached retirement age. Yours faithfully”. I have resented it ever since.

I pay tribute to Mr Dermod O’Brien QC and Mr Miller for their 17-year fight to obtain a pension for part-time judges. They had to go via the Employment Tribunal, the Court of Appeal and the Supreme Court to the European Court of Justice, and they won on the provisions of a European directive on part-time workers. What a font of justice that court is. I gather that the Government’s argument was that the part-time workers directive was intended not for part-time judges but for apple pickers—and I am rather glad that they lost.

There are many who toil in this capacity of a part-time judge out of a sense of public duty. I recall a colleague who was offered an appointment as a circuit judge, which he accepted; he failed the medical. He sat for the rest of his career, until he retired, as a recorder, doing exactly the same work and attending the same courses as he would have done with a full appointment, but his remuneration was much lower and without a pension. I hope that the direction of decisions of the Supreme Court and Court of Justice in Europe have been a relief to him and to others.

I am sure that this measure went through the Treasury without enthusiasm—indeed, they probably had their teeth gritted. I welcome it, and I am sure that it will encourage many lawyers to come forward in the public service.

My Lords, I have enjoyed this debate much more than I thought I would. It has been an education, and there have been some reminiscences of part-time judges from many decades in the past. I have one particular matter to declare: I am co-chairman of the Justice Unions Parliamentary Group. We do our best to help trade unions within the justice system to get them well represented within Parliament. I must say that the example given by Mr O’Brien and Mr Miller is one of sustained litigation, and I think my colleagues within the trade union movement can see the benefits of sustained litigation over many decades.

The Minister gave his customary comprehensive introduction, but, of course, he left out the numbers. How many judges, past and present, are we talking about? How much do we expect that they are owed? How extensive will the backdating of these pensions be?

The noble and learned Lord, Lord Morris, was one of the recorders of the past and spoke with his usual eloquence. In fact, both he and the noble Lord, Lord Thomas, may be seeking the help of the Minister to access their pensions. I am very interested to see what his response to their requests will be.

My noble friend Lord Davies of Brixton—who I have not met—gave an extremely interesting and worthwhile speech, with real knowledge, so there is no doubt that he will be a great asset to this House. But the review of judicial pensions to which he referred, and its likely outcome, will be of great interest to the participants in this debate as well as to the wider judicial community. I look forward to the Minister’s answer to his questions.

I have a full brief on this debate, but most of the points have already been made. It is an important and essentially non-contentious issue that part-timers should be treated the same as full-timers. Of course, it is regrettable that it has taken the Government losing in European courts and a long time to get to this position. Nevertheless, the Labour Party will support these measures today, and I look forward to the Minister’s response.

I am grateful to all noble Lords who have contributed to this debate. I hear the words of the noble Lord, Lord Ponsonby, ringing in my ears. He said that he had enjoyed this debate more than he thought he would; the problem is that he did not tell us how much he thought he would enjoy it, so I do not know whether he set a very low bar. But I will take it, as I enjoyed the debate very much, that he—like me—had a moderate expectation which has been significantly exceeded.

I have been asked by a number of noble Lords to provide independent legal advice on their pension entitlement. I am respectfully going to avoid doing this, not only because I am now an unregistered barrister so cannot give any legal advice at all but because I am not entitled to either a judicial or indeed a ministerial pension. However, I will set out, I hope clearly, that the Government are determined to ensure that all those entitled to pensions as a result of the four decisions—O’Brien 1, O’Brien 2, McCloud and Miller—receive them. Therefore, to pick up on the point made by the noble and learned Lord, Lord Morris of Aberavon, we do not want anybody to fall between the cracks.

As to how many people we are talking about, that rather depends on whether we are talking about people affected by those decisions or the people affected by the SI. The number of people affected by the SI is very small—a handful, maybe 10 or 15. The number of people affected by the other decisions is some 5,700, and at the moment we are paying about 1,235 people interim payments to reflect moneys to which they are entitled. As of 31 January this year, we have agreed 2,573 service records out of that estimated total of 5,706 for the O’Brien 2 and Miller claimants, and obviously we will be progressing that so far as we can.

Noble Lords are respectfully right to point out that this is the result of a number of court decisions; I deliberately did not go through the material in my opening, not least because of time. But it is important that judges, like everybody else in our society, have access to the courts, and it is also important that we recognise that our justice system depends not only on full-time, salaried judges but on a whole raft of fee-paid judges in all sorts of courts and tribunals up and down the land, without whom the critical infrastructure of our justice system would simply not exist.

I have been asked to say something about the current consultation; I will do that with reference to the McCloud litigation, which the noble Lord, Lord Bhatia, specifically asked about. As the House will be aware, the gist of that decision by the Court of Appeal, if I may respectfully paraphrase it, was that less favourable treatment was being given to some younger judges as compared with more senior judges. We have looked at that decision as part of the future reform, in respect of which we want to give judges an option as to whether or not they join the reform scheme.

From 2022, the reform scheme will be the only scheme in which members can accrue benefits; all other judicial pension schemes would close to future accruals, but no benefit previously accrued will be lost. Therefore, for those currently on final salary schemes—JUPRA or FPJPS—those benefits will be linked to their salary when they retire or leave judicial office. I can inform and, I hope, please the noble Lords who asked me what the timescale is—in addition to the noble Lord, Lord Ponsonby, I think it was the noble Lords, Lord Thomas of Gresford and Lord Davies of Brixton. The timescale is imminent; we will be publishing the government response to the consultation later this week. Off the top of my head I think it will be Thursday, but it will certainly be this week. So we are not sitting on our hands; we are certainly getting on with it.

In the time remaining I will pick up a number of other points. I respectfully agree with the noble Lord, Lord Davies of Brixton, that we need to get judicial pensions right. That is important in order to attract people to become judges, to retain them as judges and to make sure that they have a proper pension scheme. The tax treatment is part of that and noble Lords will see how we have responded to it in the consultation later this week. There is no question but that this Government put a very high degree of importance on getting the judicial pension structure and system right in order to attract people into the scheme.

I hope that I have picked up all the questions I was asked. I think the only question outstanding, from the noble and learned Lord, Lord Morris of Aberavon, and, I think, from the noble Lord, Lord Thomas of Gresford, was about whether recorders are in the scheme. I have been informed, while on my feet, that recorders are already in the scheme—so I hope that that bit of personal good news will be welcome to those Members. I will check the Official Report to see whether there are any questions I have not responded to—but I hope not, and I therefore commend these regulations to the House.

Motion agreed.