Pensions in the Spotlight

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The recent case of Re Lloyds British Testing Ltd (in liquidation) [2023] EWHC 567 (Ch),  [2023] All ER (D) 47 (Mar) has set out some important guidance as to whether a creditor can seek to recover from the debtor’s pension pot, which is welcome clarity on alternative enforcement options.


The case concerned claims brought by Manolete Partners Plc, who was the assignee of claims that Lloyds British Testing Ltd (in liquidation) against Mr. White, a former director of the company. The Court found that Mr. White was in breach of his fiduciary duties towards the company before it entered administration.

Mr. White’s breaches included causing company funds to be used towards payments for a Bentley Flying Spur, a Bentley Continental, two Lamborghinis and a Porsche. He had also financed several holidays using company funds, including to the Caribbean and the Maldives. These payments were just the tip of the iceberg 

The core issue before the Court in the application was whether the Court could and should compel Mr. White to draw down his benefits under an occupational pension scheme financed by his employer to satisfy a substantial outstanding judgment debt arising from the main claim. Mr. White’s pension pot comprised of a commercial property in Swansea of £800,000, which generated around £60,000 per year.  

Mr. White’s primary argument against such an order being made was that it was a breach of the prohibition set out at Section 91 (2) of the Pensions Act 1995 (the Pensions Act). This provides that a person’s entitlement in respect of accrued benefit rights under a registered occupational scheme cannot be assigned, commuted, surrendered, or charged and no line or set off can be exercised in respect of it.  

It was for the Court to decide whether Section 91 of the Pensions Act was a bar to the order sought by the applicant. The Applicant argued that to make such finding would mean that Mr. White was keeping the benefit of an £800,000 property and the associated income to the detriment of his creditors.  


On analysis of the facts, HHJ Hodge KC determined that the Court was able to grant an injunction requiring Mr. White to exercise his rights under his pension scheme to draw down his occupational pension and that Section 91 of the Pension Act was no bar to this.  

In doing so:

  1. The Court considered the case of Blight v Brewster  [2012] EWHC 165 (Ch) – the claimants in this case, who were victims of fraud, sought an order that the defendant be required to elect to draw down a portion of his pension as a lump sum, which a third-party debt order could then attach to. The relief was refused at first instance; however, on appeal the deputy High Court Judge held that there was a strong principle and policy of justice that debtors should not be allowed to hide assets away in a pension fund which they had a right to withdraw, and which were needed to pay creditors.
  2. Provided the Judge directed that payment of Mr. White’s pension pot was to be made to a UK nominated bank account in the Mr. White’s name, there was no contravention of Section 91 of the Pensions Act because the order would not have the effect of restraining Mr. White from receiving his pension pot. Rather the opposite was true as it would ensure that the pension pot was paid to him directly rather than remaining within the scheme wrapper.
  3. The fact that the order was motivated by the objective of enabling that pension pot to be applied in satisfaction of a pre-existing judgment debt made no difference.  
  4. It was held that it was just, equitable and convenient for the pension to be drawn by Mr. White to satisfy the judgment debt. 
  5. A highly important factor in the Judge exercising their discretion was that the principal asset in the pension pot (the property) had been derived entirely from funds provided by the company and the judgment debt had arisen purely because of Mr. White’s misfeasance and breaches of his fiduciary duties.  

Key takeaways

This will come as welcome news for judgment creditors given the problems often caused by enforcement in corporate insolvencies and civil claims in general. It means that potential claimants, including Insolvency Practitioners, will likely be making early enquiries as to whether the potential defendant has the benefit of a viable pension pot to enforce against and which they are entitled to draw down. It should be noted that the burden will remain on the applicant to persuade the Court that making such an order is just, equitable and convenient and cases will therefore remain heavily fact specific.  

If you need additional information or support in your situation, whether you are looking to bring or defend a claim, our specialist insolvency litigation team can help.Get in touch with our team of expert disputes lawyers for bespoke advice