Biggart Baillie Solicitors

Another visit to the Barber (window) and other stories

29 April 2010 

Lord Drummond Young in the Scottish case reported earlier this month of Low & Bonar plc and Low & Bonar Pension Trustees Limited v. Mercer Limited has returned to the question of when the Barber window closed for pension schemes.  It may turn out that for some Scottish pension schemes the Barber window closed earlier than previously thought (with consequential cost benefits to the scheme and employer).

In that case, the Trust Deed provided that an amendment to the Trust Deed could only be made by ‘deed’ but intended amendments were not set out in a formal deed.  As a result of an earlier decision in England, the settled position had been that amendments could only be made by a formal deed, such as a Deed of Amendment.

Lord Drummond Young has now taken a different approach, relying upon Scots law’s more relaxed interpretation of a ‘deed’, in contrast to what might be seen as commonly used wording and almost certainly different to the intention of the drafter of the Trust Deed.  He decided that a company board minute and a trustees’ minute agreeing to the change was sufficient to meet requirements for amendment on the basis that the minute clearly stated the intention and agreement to make the change.

The decision is unlikely to be appealed in view of the outcome for the trustees of the scheme in question, company and Mercer.

Based on this decision, it may now mean that more Scottish pension schemes have closed their Barber window earlier but as always it will come down to what documentation is in place and does it meet the requirements.  Certainly a review should be seriously considered, taking into account cost versus benefit.

The title mentions “and other stories”.  This is because the decision has implications for all types of amendments, not just closing the Barber window.

For more information, please contact:

June Crombie, Iain Talman, or Colin Greig (0141 228 8000)