Recovery in overpayment cases: The Court of Appeal has ruled that the Pensions Ombudsman (PO) is not a "competent court" for the purposes of recoupment in overpayment cases.

In cases where occupational pension scheme trustees have overpaid benefits to a member in error, the trustees may be entitled to offset the overpaid amount against future benefits payments through the remedy of recoupment.

However, where there is a dispute relating to the recoupment of overpaid benefits, section 91(6) of the Pensions Act 1995 requires that set-off must not be exercised unless the obligation in question has become enforceable under an order of a "competent court". This may arise where the member has disputed the amount, the terms, or the recoupment itself.


Whilst historically it has been considered that a determination from the Pensions Ombudsman alone would be sufficient to exercise the remedy of recoupment, a view supported by the Ombudsman himself, comments in recent case law cast doubt over this position.

In the case of Burgess v BIC UK Ltd, Mr Justice Arnold provided a provisional obiter opinion, without having heard legal arguments in the matter, particularly from the PO who was not a party to the case, that the PO was not a "competent court" for the purposes of recoupment.

"In my judgment, a determination by the Pensions Ombudsman would not itself constitute "an order of a competent court", because the Ombudsman is not a court. An order by the County Court pursuant to section 150(5)(a) of the Pensions Schemes Act 1993 would constitute an order of a competent court, however."

In the later High Court decision of CMG Pension Trustees Limited v CGI IT UK Limited, Mr Justice Leech further iterated the PO was not a "competent court" for the purposes of recoupment.

This case was then appealed to the Court of Appeal by the PO on the basis of this question, (The Pensions Ombudsman v CMG Pension Trustees Limited & Anor), which has now reaffirmed the position that the Office of the PO is not a "competent court" for the purposes of section 91(6) of the Pensions Act 1995. The rationale behind the decision includes that the PO has a one-sided jurisdiction based on member or beneficiary referral of a complaint; that the PO also carries out informal investigative work into maladministration; the drafting intentions of Parliament; and distinctions with specific references to the PO as a court in alternative legislation; as well as the ordinary meaning of the words "competent court".

Impact on pension schemes

The decision will impact scheme trustees and administrators. In practice, this may make recovering overpayments more difficult where the member has disputed the repayment.

A determination of the Pensions Ombudsman is enforceable in a county court, under section 151(5) of the Pension Schemes Act 1993, as if it was a judgment or order of that court (or, in Scotland, enforceable as an extract registered decree bearing a warrant for execution issued by the Sheriff Court). However, there are costs associated with enforcement which may include instructing solicitors to seek enforcement, and the cost of raising the action itself. This will also impact trustees as there may be a delay whilst the process of enforcement takes place.

There is some reassurance for trustees as the Court of Appeal confirmed that enforcement proceedings were only an administrative matter, and not a requirement for the court to reconsider the merits of the matter itself.

Update expected from the PO

In response to the comments by Mr Justice Arnold in the Burgess case, the PO had provided guidance in the form of a factsheet, published in April 2019, which included a list of reasons why the Pensions Ombudsman considers that it is a "competent court" - including that a PO determination brings a dispute to an end; the PO is judicial, and determinations are orders or judgments; and that determinations are enforceable.

The PO confirmed on 1 November 2023 that it had seen the Court of Appeal judgment and was reviewing its position, with an update expected in due course.

Key takeaways

  • Where there is a dispute with a member relating to recoupment following an overpayment of benefits, trustees should take legal advice as to how to proceed prior to adjusting the member's benefits.
  • A determination from the PO alone is insufficient to recoup overpaid benefits if the member does not agree to such an arrangement.
  • Trustees must instead seek an order of the Court to exercise the recoupment remedy.

If you would like to discuss anything raised in this blog in more detail, please get in touch with a member of the pensions team or your usual Brodies contact.


Juliet Bayne


Jennifer Crawford

Senior Associate

Ellie Williams