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On appeal from: [2016] EWCA Civ 1064

This appeal considered the proper construction of terms of a Pension Scheme in relation to whether Trustees have the power to adopt an alternative index from the Retail Prices Index, when RPI remains an officially published index, notwithstanding RPI having been superseded (and in that sense ‘replaced’) by the Consumer Price Index as the Government’s front-line inflation measures (including for the purposes of pensions’ uprating).

The Supreme Court unanimously dismissed the appeal. The Court considered that a pension scheme has several distinctive characteristics which are relevant to the court’s selection of the appropriate interpretative tools. A pension scheme is a formal legal document, not the product of a commercial negotiation, and is designed to operate over a long period of time to confer rights on people who were not originally parties to the instrument. As such, the Court held that it is appropriate to give weight to textual analysis, whilst still avoiding undue technicality and having regard to the practical consequences of any construction. Therefore, the Court concluded that the correct interpretation of the first sentence of the Definition is that RPI means “the RPI or any index that replaces the RPI and is adopted by the trustees”. As RPI is still available, the Supreme Court held that it is not open to the appellant to replace the index in the pension scheme.

For judgment, please download: [2018] UKSC 55
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (11 Jun 2018 morning session) (11 Jun 2018 afternoon session)