Equity To The Rescue!

Equity is the name given to an historic set of legal principles which promote fairness. They supplement strict rules of law which if applied, could result in harsh consequences for some or all parties. The Courts tend to use these principles as general guidelines in reaching a decision.

The principle that "equity regards as done what ought to be done" can amongst other things, give effect to an agreement as if it had been executed properly, even when it was not. Up until now, the Courts have been reluctant to recognise this principle when it comes to amending pension scheme documentation – instead the Courts have applied the strict requirements of amendment powers.

However, a recent High Court decision has found that it may not always be fatal to fail to follow the fine detail of an amendment power.

HR Trustees v Wembley1

In this case, the High Court was asked to decide on the validity of an attempted amendment to the rules of the Wembley plc 1989 Pension Scheme (the "Scheme"). The proposed amendment...