Parish, R (on the application of) v The Pensions Ombudsman [2009] EWHC 32 (Admin)

[2009] EWHC 32 (Admin)Case No CO/9865/2006
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 20 January 2009
Before
MR JUSTICE KEITH
Between
R (on the application of Richard Parish)ClaimantThe Pensions OmbudsmanDefendant
Mr Brian Kennelly (instructed by Royds) for ClaimantMr David Pievsky (instructed by The Office of the Pensions Ombudsman) for DefendantHearing Hearing dates: 4 and 5 December 2008
Judgment

Introduction

[1]This case is a graphic illustration of how a sensible – and seemingly innocuous – strategy to protect a litigant’s position can go disastrously wrong. Prof. Richard Parish used to be Chief Executive of the Health Development Agency. Following his dismissal from that role, he requested the Health Development Agency to agree that he had been dismissed in circumstances which would have entitled him to an enhanced pension. The Health Development Agency refused that request. In due course, Prof. Parish complained to the Pensions Ombudsman about the refusal of that request, but in case the Ombudsman did not have the power to investigate the complaint, Prof. Parish also issued a claim for judicial review in the Administrative Court. The plan was to apply for those proceedings to be stayed until the Ombudsman had confirmed that he could investigate the complaint, in which case the claim for judicial review would be discontinued.[2]The twist in the story is that instead of staying the proceedings, the Administrative Court considered the claim on its merits, and refused Prof. Parish permission to proceed with the claim. The irony is that, but for the claim in the Administrative Court, the Ombudsman would have investigated Prof. Parish’s complaint, and he subsequently decided not to do so only because the claim in the Administrative Court had effectively been dismissed. The strategy which had been adopted to protect Prof. Parish’s position had in the event completely backfired, and what Prof. Parish claims to be the substance of his complaint could no longer be investigated.[3]It was to remedy the unforeseen and unintended consequences of issuing the earlier claim for judicial review that a new claim for judicial review was brought. That is the claim which I am now addressing. In this new claim, Prof. Parish asks the court to quash the Ombudsman’s refusal to investigate his complaint. The question is whether the issue which Prof. Parish wants the Ombudsman to investigate was really decided in the earlier claim for judicial review. The facts need to be considered with some care, and I trust that I will be forgiven for going into them in some detail, but first it is necessary to explain the nature and extent of the Ombudsman’s role when investigating complaints. All references to sections of an Act in this judgment are references to the Pension Schemes Act 1993 unless otherwise stated.

The Pensions Ombudsman’s role

[4]The office of the Pensions Ombudsman was created by section 145 for the purpose of conducting investigations under the Act. The matters which the Ombudsman “may” investigate are set out in section 146. These include in subsection 1(a) “… a complaint made to him by or on behalf of an actual or potential beneficiary of an occupational or personal pension scheme who alleges that he has sustained injustice in consequence of maladministration in connection with any act or omission of a person responsible for the management of the scheme.” The use of the word “may” shows that he has a discretion whether to investigate a particular complaint, and he “may … order the discontinuance of an investigation if he considers it appropriate to do so”: rule 16(1)(c) of the Personal and Occupational Schemes (Pensions Ombudsman) (Procedure) Rules 1995 (SI 1053/1995) (“the 1995 Rules”).[5]The Ombudsman may not investigate a complaint which is already the subject of proceedings. That is provided for by section 146(6), which reads, so far as is material:
“The Pensions Ombudsman shall not investigate or determine a complaint … – (a) if, before the making of the complaint … – (i) proceedings in respect of the matters which would be the subject of the investigation have been begun in any court or employment tribunal, and (ii) those proceedings are proceedings which have not been discontinued or which have been discontinued on the basis of a settlement or compromise binding all the persons by or on whose behalf the complaint … was made …”
At the same time, an investigation by the Ombudsman should not be derailed by the subsequent issue of proceedings. That is the effect of section 148, which provides, so far as is material:
“(1) This section applies where – (a) complaint has been made … to the Pensions Ombudsman; and (b) any party to the investigation subsequently commences any legal proceedings in any court against any other party to the investigation in respect of any of the matters which are the subject of the complaint … (2) In England and Wales, where this section applies any party to the legal proceedings may at any time after acknowledgment of service, and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings. (4) On an application under subsection (2) … the court may make an order staying … the proceedings if it is satisfied – (a) that there is no sufficient reason why the matter should not be investigated by the Pensions Ombudsman; and (b) that the applicant was at the time when the legal proceedings were commenced and still remains ready and willing to do all things necessary to the proper conduct of the investigation.” (a) if, before the making of the complaint … – (i) proceedings in respect of the matters which would be the subject of the investigation have been begun in any court or employment tribunal, and (ii) those proceedings are proceedings which have not been discontinued or which have been discontinued on the basis of a settlement or compromise binding all the persons by or on whose behalf the complaint … was made …” (a) complaint has been made … to the Pensions Ombudsman; and (b) any party to the investigation subsequently commences any legal proceedings in any court against any other party to the investigation in respect of any of the matters which are the subject of the complaint … (a) that there is no sufficient reason why the matter should not be investigated by the Pensions Ombudsman; and (b) that the applicant was at the time when the legal proceedings were commenced and still remains ready and willing to do all things necessary to the proper conduct of the investigation.”
[6]The effect of these provisions is that the Ombudsman has a power, but not a duty, to investigate certain complaints of maladministration which are made to him, but that he has no such power where the investigation would relate to matters which were the subject of litigation at the time when the complaint was made, and where the litigation is either continuing or has been settled. Where the investigation relates to matters which are the subject of litigation commenced after the making of the complaint, there is a mechanism enabling the court to stay its proceedings if the court is satisfied that it would be appropriate for the Ombudsman to investigate the matter.[7]These provisions do not address whether it is appropriate for the Ombudsman to investigate matters which have already been determined. That issue was considered by Lightman J in Westminster City Council v Haywood (No. 2) [2000] ICR 827. At p. 840F-H, he said:
“As a matter of principle and common sense, the doctrine of res judicata should apply equally to determinations and directions of the Pensions Ombudsman (and judgments on appeal from him) as to other judgments and determinations, and res judicata should as much be a bar to a complaint before the Pensions Ombudsman as it is a bar to the commencement of legal proceedings to which (in cases where the acts of maladministration complained of consist of interference with private law rights or breaches of private law duties) it is an alternative. I should add that, if contrary to my view for any technical reason the doctrine of res judicata were held to have no application, it would be a proper exercise of his discretion by the Pensions Ombudsman in the interests of finality not to allow an issue already determined to be re-opened before him …”
That case was concerned with whether the Ombudsman should re-investigate a complaint which he had previously investigated, but the principle applies, in my view, just as much to an issue which has been determined by a court. Apart from anything else, you would want to avoid inconsistent decisions on the same issue by the Ombudsman and the court. That was the thinking behind what Knox J said in Hillsdown Holdings Plc v Pensions Ombudsman [1997] 1 All ER 862 at p. 899f-g. He thought that section 146(6)(a) suggested that an investigation by the Ombudsman following a complaint to him and court proceedings in respect of matters which would be the subject of that investigation “are intended to be mutually exclusive alternatives”, and “it would be strange if it was contemplated that the alternatives would or might produce different results as to the substance of the dispute.”[8]Three other points should be made. First, it should be noted that what constitutes “maladministration” is not defined in the Act, but it includes faulty or incompetent administration which falls short of the breach of any legal duty or obligation: see Secretary of State for Health v Marshall [2008] EWHC 909 (Ch) per Briggs J at [27]. Secondly, when investigating complaints, the Ombudsman is not limited to determining questions of law. He has an important fact-finding role. If it is necessary to resolve disputed questions of fact in order to determine a complaint, he will do so, but it is for him to decide what lines of inquiry to pursue and whether a particular question of fact needs to be resolved in order to determine the complaint. To enable him to decide disputed questions of fact, the 1995 Rules enable him to request documents from a party to the investigation (rule 9(4)), to hold an oral hearing in connection with the investigation (rule 10(1)), and to require the personal attendance of anyone who has made an affidavit or witness statement in connection with the investigation (rule 15(4)). Thirdly, where the Ombudsman has to consider whether someone has made the right judgment call, he regards his role as not dissimilar to the court’s approach to claims of judicial review. He will consider whether the decision-maker properly identified the issues, whether the decision-maker addressed them correctly by considering all relevant matters and ignoring all irrelevant ones, and whether the conclusion which was reached was not unreasonable. This is in accordance with what Park J said about the Ombudsman’s role in The Trustees of the Saffil Pension Scheme v Curzon [2005] EWHC 293 (Ch) at [24].

The relevant facts

[9]Prof. Parish’s employment. Prof. Parish was employed by the Health Development Agency (“the HDA”) as its Chief Executive from January 2000. On 22 November 2002, he was given six months’ notice of his dismissal, and his employment came to an end on 25 May 2003. He brought proceedings in an employment tribunal against the HDA, complaining that his dismissal had been unfair and in breach of his contract of employment. Those proceedings were settled in May 2004, without prejudice to Prof. Parish’s right to bring proceedings relating to his pension rights.[10]The request for an enhanced pension. On 23 November 2004, Prof. Parish’s solicitors wrote to the HDA requesting that arrangements be made for him to receive his “enhanced full early retirement benefits under the terms of the NHS Pension Scheme”. He would be entitled to such benefits if he satisfied the conditions set out in reg. E3(2) of the National Health Service Pension Scheme Regulations 1995 (SI 300/1995) (“the 1995 Regulations”) as amended. The relevant condition for present purposes is that set out in reg. E3(2)(b), namely that the Secretary of State has to have certified “(i) that the member’s employment [was] terminated by reason of redundancy, or (ii) with the agreement of the employing authority, that the member’s employment [was] terminated in the interests of the efficiency of the service in which he [was] employed …” Since Prof. Parish had not been dismissed for redundancy, he had to satisfy the condition in reg. E3(2)(b)(ii) if he was to be entitled to such benefits.[11]The 1995 Regulations did not define the phrase “in the interests of the efficiency of the service”, though there is some guidance about the circumstances which it was intended to cover in the NHS Early Retirement Arrangements Guidelines dated 28 April 1995. Para. 2.14 of the Guidelines provides:
“NHS employers may seek early retirement of individual members of staff (including clinical medical and dental staff) in the interests of the efficiency of the service, where performance • although acceptable in the past, has consistently declined over a period of time to an unacceptable level, and • after appropriate remedial action has been taken, is considered unlikely to improve.”
The Guidelines went on to caution against excessive use of this power. Paras. 2.16-2.18 of the Guidelines provide, so far as is material:
“2.16 Retirements in this category should be rare. The decision to retire an individual early should be taken only as the last resort when it is clearly in the overall interests of the efficiency of the service to do so. 2.17 These arrangements should not be used where an employee’s conduct is in question. In these circumstances, appropriate disciplinary proceedings should be initiated. 2.18 When an employee is prepared to accept that early retirement under these arrangements is the most appropriate course of action, the employer should seek their written agreement. However, early retirement can be imposed on an employee if the circumstances described in paragraph 2.14 apply.” • although acceptable in the past, has consistently declined over a period of time to an unacceptable level, and • after appropriate remedial action has been taken, is considered unlikely to improve.”
[12]On 25 January 2005, the Board of the HDA met to discuss its response to this letter. The Board’s understanding of the reasons for Prof. Parish’s dismissal was informed by a detailed report from its Chairman, which had been prepared on 19 November 2002 and which alleged very serious shortcomings in Prof. Parish’s performance. The Board was also told that Prof. Parish was maintaining that his dismissal had been instigated by the Department of Health, but the Board said that the reason for his dismissal had been his performance which had been so poor that the Board could no longer have had confidence in him. The Board unanimously resolved that in these circumstances “there was no question of his being dismissed in the interests of efficiency”.[13]The Board then went on to address the hypothetical question of what it would have done if Prof. Parish’s performance “had been in the less serious part of the spectrum”, i.e. if his performance had not been so poor as to render his dismissal incapable of being regarded as having been in the interests of the efficiency of the service. The Board presumably thought that in those circumstances it could still withhold its agreement for Prof. Parish to be regarded as having been dismissed in the interests of the efficiency of the service, since reg. E3(2)(b)(ii) began with the words “with the agreement of the employing authority”. The Board was told of the cost of enhancing Prof. Parish’s pension – a sum in the region of £674,000.00 – and the sum paid to him on the settlement of his claim for unfair dismissal. On this issue, the Board decided that it would not have exercised its discretion to agree that he should be regarded as having been dismissed in the interests of the efficiency of the service.[14]The complaint to the Pensions Ombudsman. On 20 April 2005, Prof. Parish’s solicitors submitted a complaint to the Pensions Ombudsman on his behalf. By then, the National Institute for Clinical Excellence (“NICE”) had succeeded to the rights and liabilities of the HDA, and NICE was named as the respondent to the complaint. The complaint related to the HDA’s refusal to agree that Prof. Parish had been dismissed “in the interests of the efficiency of the service”. The complaint was drafted by counsel and it set out what it described as the “purported” reasons which the Chairman of the HDA had given at various times for her concerns about Prof. Parish’s performance. It quoted from that part of the minutes of the meeting of the Board of the HDA on 25 January 2005 which referred to Prof. Parish’s contention that he had been dismissed at the instigation of the Department of Health rather than because of his performance. It is true that the complaint did not in terms allege that criticism of his performance was unjustified, or that his performance had in truth not been thought to have been anything like as poor as it was being made out to have been. But it was apparent that Prof. Parish was saying that whatever the real reason for his dismissal had been, it had had nothing to do with what had been said to be the shortcomings in his performance.[15]But that was not the basis of the complaint. What was being argued was that, even if Prof. Parish had been dismissed for the shortcomings in his performance which the Chairman of the HDA had identified, his dismissal should nevertheless have been regarded as having been in the interests of the efficiency of the service. That was because, on a proper analysis of the shortcomings in his performance which the Chairman of the HDA had identified, his performance had not been so poor as to preclude the HDA from acknowledging that his dismissal had been in the interests of the efficiency of the service. It was in that context that the contentions made on his behalf in the complaint were that, in deciding not to agree to Prof. Parish’s dismissal being regarded as having been in the interests of the efficiency of the service,(a) the Board had misdirected itself as to the legal test to be applied to Prof. Parish’s request under reg. E3 of the 1995 Regulations, and had failed to take into account a number of relevant considerations, and(b) the Board had misdirected itself in the way it would have exercised its discretion on the hypothetical question it had addressed.[16]The first claim for judicial review. It was at this stage that Prof. Parish’s solicitors – maybe on counsel’s advice though whether it was does not matter for present purposes – made the strategic decision which was to have such disastrous consequences. On 22 April 2005 – two days after lodging Prof. Parish’s complaint with the Ombudsman – they issued a claim on Prof. Parish’s behalf in the Administrative Court for judicial review against NICE and the Secretary of State for Health. Apart from one point of emphasis, the grounds were in the same terms as the complaint to the Ombudsman, but they also explained why parallel proceedings were being issued. The grounds said that it was unclear whether the Ombudsman had jurisdiction to investigate Prof. Parish’s complaint, and that once NICE and the Secretary of State had served acknowledgements of service of the claim for judicial review, Prof. Parish would be seeking a stay of the claim for judicial review under section 148 pending either the Ombudsman declining to investigate his complaint for want of jurisdiction or the Ombudsman resolving the complaint. In other words, the claim for judicial review was being issued to protect Prof. Parish’s position in the event of the Ombudsman deciding that he did not have the jurisdiction to investigate his complaint.[17]The difference in emphasis between the claim for judicial review and the previous complaint to the Ombudsman was that the claim for judicial review made explicit what had been left implicit in the complaint. The grounds in the claim for judicial review stated, for the avoidance of doubt, that Prof. Parish did not admit that his performance had been defective in any way. However, for the purpose of the claim for judicial review, he was content for his case to be argued on the basis of the reasons given by the HDA for his dismissal. In other words, what was being argued in the detailed statement of grounds in the claim for judicial review was the same as that set out in the complaint to the Ombudsman: assuming, but without accepting, that Prof. Parish had been dismissed for the shortcomings in his performance which the Chairman of the HDA had identified, his dismissal should nevertheless have been regarded as having been in the interests of the efficiency of the service. Mr Brian Kennelly for Prof. Parish did not argue otherwise.[18]Following the lodging of acknowledgements of service by NICE and the Secretary of State, which contained their summary grounds for resisting the claim, the papers were submitted to Stanley Burnton J (as he then was). It is here that the gremlins got into the works. Stanley Burnton J did not address the question whether the proceedings should be stayed under section 148, which was what Prof. Parish’s solicitors had wanted the court to do. Instead, he considered the claim on its merits, and on 2 June 2005, he refused Prof. Parish permission to proceed with the claim. In the brief reasons he gave, he said that NICE had correctly construed the phrase “in the interests of the efficiency of the service”, and he stated that NICE had been “entitled to determine that the termination of [Prof. Parish’s] employment [had] not [satisfied] this requirement”. He went on to explain why, in his view, there were no grounds for joining the Secretary of State as a defendant. In his reasons, Stanley Burnton J did not refer to Prof. Parish’s intention to seek a stay of the proceedings under section 148.[19]How did it come about that Stanley Burnton J did not address the question of the stay? The answer, I think, is relatively clear. Section 4 of the judicial review claim form asks a claimant to state whether he is making any application other than an application for permission to proceed with his claim for judicial review, and if he is to put a cross in the box marked “yes” and to complete section 7. In fact, a cross was put in the box marked “no” rather than in the box marked “yes”, and section 7 was left blank rather than referring to the application for a stay. The solicitors say that they had to do that because section 148 only entitled them to apply for a stay of the proceedings once the acknowledgements of service had been filed. They were therefore going to file their application for the stay once they had been notified of the filing of the acknowledgements of service. I do not comment on whether that was the correct view to take, but even if it was they had to ensure that the application for the stay was filed promptly in order to avoid a judge being asked to consider the claim on its merits.[20]As it turned out, no such application had been filed by the time Stanley Burnton J refused permission for the claim to proceed. Why was that? Prof. Parish’s solicitors received the acknowledgements of service on 16 and 18 May 2005, and they say they needed to take Prof. Parish’s instructions before filing the application for the stay because at the time without prejudice discussions were taking place between them and NICE. Prof. Parish’s instructions could not be taken just then because he was abroad on business and then on holiday in the UK. It is questionable whether the without prejudice discussions made it necessary for Prof. Parish’s instructions to be taken before the application for the stay was filed. That is not something I need to address, but the fact remains that as a result of the application for the stay not being filed, Stanley Burnton J would have been provided with the form to be used by judges when they have to decide whether to grant permission for a claim for judicial review to proceed, and not the form to be used when they have to consider some other application. He must have thought that the application for a stay foreshadowed in the grounds was not being pursued. But whether he thought that or not, the fact remains that he considered the claim on its merits, and concluded that the claim could not succeed.[21]On 9 June 2005, Prof. Parish renewed his application for permission to proceed with his claim for judicial review. The grounds did not state that the application was being renewed only to protect Prof. Parish’s position in the event of the Ombudsman deciding that he had no jurisdiction to investigate the complaint. However, the renewed application to proceed with the claim for judicial review was not pursued, and the claim for judicial review was discontinued on 30 November 2005, because as we shall see the Ombudsman had in the meantime acknowledged that he had jurisdiction to investigate Prof. Parish’s complaint.[22]The acceptance of jurisdiction. Two concerns had been expressed by a member of the Ombudsman’s staff in correspondence over the Ombudsman’s jurisdiction to investigate Prof. Parish’s complaint. The first was whether Prof. Parish’s complaint related to “the ordinary contractual relations between employer and employee” which had previously been held to be something which the Ombudsman could not investigate. The conclusion which was reached on that topic was conveyed to Prof. Parish’s solicitors in a letter from the Ombudsman’s office of 11 July 2005. It said that this was not a bar to the Ombudsman investigating Prof. Parish’s complaint. The complaint did “not turn on employment law issues”, though it was acknowledged that a “finding of fact” would have to be made as to “the terms” on which Prof. Parish had left his employment. In view of the way the complaint was being put at that stage, that must have meant that a finding would have to be made about whether Prof. Parish’s dismissal could properly be regarded as having been in the interests of the efficiency of the service in the light of the reasons for his dismissal given by the Board. It could not have meant that a finding of fact would have to be made as to what the true reasons for his dismissal had been in order to decide whether his dismissal for those reasons could be characterised in that way.[23]The second concern over the Ombudsman’s jurisdiction to investigate Prof. Parish’s complaint was whether the proceedings in the employment tribunal had already determined the matters to which Prof. Parish’s complaint related. The conclusion which was reached on that topic was conveyed to Prof. Parish’s solicitors in a letter from the Ombudsman’s office of 14 September 2005. The letter said:
“The … claim [in the employment tribunal] principally concerned the manner of [Prof. Parish’s] dismissal and …, in my view, did not contest the validity of the reasons given for dismissal. Although it might be the case that, had a hearing taken place, the reasons for dismissal would have been considered and findings made in relation to them, that did not happen and therefore the Ombudsman would not be asked to make findings on matters on which a different tribunal had already ruled.”
It is unclear what the phrase “the validity of the reasons given for dismissal” meant. It could have meant that there had been no dispute in the tribunal about what the reasons for Prof. Parish’s dismissal had been. Alternatively, it could have meant that there had been no dispute in the tribunal about whether the reasons given for Prof. Parish’s dismissal had been capable of justifying his dismissal. But leaving that aside, the conclusion which was reached was that the proceedings in the tribunal were not a bar to the Ombudsman investigating Prof. Parish’s complaint because no findings had been made by the tribunal, i.e. the doctrine of res judicata did not apply. That did not deal with whether the proceedings in the tribunal had deprived the Ombudsman of jurisdiction under section 146(6)(a) on the basis that the proceedings in the tribunal had been “in respect of … matters” which were the subject matter of the complaint to the Ombudsman. That was not an issue which the Ombudsman ever addressed – at least not until after the current claim for judicial review was issued.[24]Accordingly, the two concerns expressed by the member of the Ombudsman’s staff over the Ombudsman’s jurisdiction to investigate Prof. Parish’s complaint had been satisfactorily answered. Her letter to Prof. Parish’s solicitors of 14 September 2005 notified them of the acceptance by the Ombudsman that he could investigate Prof. Parish’s complaint. They were told that the papers would be forwarded to a senior investigator, but they were also told that the issue of jurisdiction might have to be reviewed in the light of any information or submissions received in the course of the investigation. It was as a result of this letter that Prof. Parish’s renewed application for permission to proceed with his claim for judicial review was not pursued and the claim discontinued.[25]The Ombudsman’s knowledge of the claim for judicial review. When the member of the Ombudsman’s staff decided that the Ombudsman had jurisdiction to investigate Prof. Parish’s complaint, she did not know of the claim for judicial review. The Ombudsman had not been identified in the claim form as an interested party, and his office had not even been told about the claim. The only possible intimation which the Ombudsman received about the claim for judicial review was that his office was sent by Prof. Parish’s solicitors copies of letters they sent to NICE’s solicitors and the Solicitor to the Department of Health (who was acting for the Secretary of State) on 16 and 17 May 2005 respectively, which admittedly referred to the issue of proceedings by Prof. Parish against NICE and the Secretary of State. But it gave a case number for the proceedings – 2203357/2003 – which(a) suggested that the proceedings had been issued in 2003 and(b) was in the format of the numbering of cases in the employment tribunal. It is true that Prof. Parish’s claim in the employment tribunal had been against the HDA, rather than NICE and the Secretary of State, but the member of the Ombudsman’s staff was not to know that for sure because the Ombudsman had never actually been told that. So if the member of the Ombudsman’s staff had given any thought to the letters of 16 and 17 May 2005, she may well have assumed that the proceedings referred to was the claim in the employment tribunal (which she knew had been issued in 2003) which had been settled. In the circumstances, the first the Ombudsman’s office knew of the claim for judicial review was on 20 December 2005 when the Ombudsman received NICE’s response to the complaint made to him which referred to the claim for judicial review and to which the grounds of the claim for judicial review were annexed.[26]In the interests of completeness, I should add that within the Ombudsman’s file relating to Prof. Parish’s complaint was an index of the documents which Prof. Parish had filed with his original claim for judicial review. The heading of that document shows that Prof. Parish had either commenced proceedings, or was intending to commence proceedings, in the Administrative Court against NICE and the Secretary of State. However, it has not proved possible to tell when that document reached the Ombudsman’s file, and it cannot be said that this document undermines the assertion that it was not until 20 December 2005 that the Ombudsman’s office became aware of the claim for judicial review.[27]The Ombudsman’s change of stance. NICE’s response to the complaint made to the Ombudsman referred to how Prof. Parish’s claim for judicial review had been disposed of by Stanley Burnton J. It was said that the very allegations which Prof. Parish had been making in his complaint to the Ombudsman had been decided in the claim for judicial review. Accordingly, it was contended that the doctrine of res judicata meant that the Ombudsman could not investigate the complaint. Alternatively, it was argued that the Ombudsman should refuse to investigate the complaint because it was wrong for Prof. Parish to seek to persuade the Ombudsman to come to a different conclusion from that reached in the High Court.[28]The initial response of the Ombudsman’s office to hearing of the claim for judicial review came in a letter of 17 March 2006. It expressed the view that Prof. Parish’s complaint could not be investigated for two reasons. One was because of section 146(6)(a). That view was wrong – as Prof. Parish’s solicitors were subsequently to point out. Section 146(6)(a) prevented the Ombudsman from investigating a complaint if proceedings relating to the matters which would be the subject of the investigation had been issued before the complaint to the Ombudsman. The claim for judicial review had been made after – albeit only two days after, but nevertheless after – the complaint to the Ombudsman. The other reason provisionally given by the Ombudsman for not investigating the complaint was that the substance of it had been “the same as” the substance of the claim for judicial review.[29]Further correspondence took place between the Ombudsman and Prof. Parish’s solicitors, in the course of which the Ombudsman reviewed the question whether he should investigate Prof. Parish’s complaint. However, the Ombudsman ultimately decided to stand by his original decision not to investigate it. He spelt out why in a letter from a member of his staff to Prof. Parish’s solicitors dated 23 August 2006. Since it is the decision which is contained in that letter which is the subject of the current claim for judicial review, I set out the material parts of the letter in full:
“There is no dispute that your client’s application to this office was received before the High Court received his claim for judicial review. Indeed I set this out clearly in my letter of 31 May 2006. Nonetheless, had the Ombudsman been aware of the application for judicial review and the order of 2 June 2005, he would not have accepted this complaint for investigation. The Ombudsman takes the view that the issue is not whether he has jurisdiction to investigate but whether, as a matter of discretion he should investigate or should continue an investigation of a matter where such parallel proceedings are commenced. There is no dispute that the Pensions Ombudsman is able to investigate and determine complaints of maladministration causing injustice and disputes of fact, as well as determining disputes of fact or law, as my colleague … explained in her letter of 11 July 2005. She also pointed out that the decision to investigate would be kept under review and could be revised. You have suggested that there are matters that the Ombudsman could investigate, which were not considered by the court. You dispute some of the facts presented to the court and assert that the Board’s decision as to the reasons for the termination of your client’s employment was erroneous. Alternatively, you say that, even if the facts presented to the court are correct, there remain factual matters that are unresolved, from which the Ombudsman should draw conclusions. Finally you say that the court did not consider the underlying evidence which related to your client’s case, as the Administrative Court does not usually concern itself with issues of disputed fact, and the judicial review proceedings do not permit claimants to lodge voluminous bundles of documentation, even where these are relevant to underlying disputes of fact. The High Court has already made clear, in its order of 2 June 2005, that NICE correctly construed the phrase ‘in the interests of the efficiency of the service’, and was entitled to determine that the termination of your client’s employment was not ‘in the interests of the efficiency of the service’. The Ombudsman is adamant that he should not be used as a way of challenging a matter [which has] already been determined by the High Court. If that decision has been made by the High Court on the basis of a wrong appreciation of the factual background to the decision that would seem to be a matter for you to pursue, or to have pursued, with the Court of Appeal. You have said that you consider that the court, in reaching the decision it did, might have been influenced by the possibility that the Pensions Ombudsman would conduct an investigation. But there is no evidence to substantiate that statement. In all the circumstances, therefore, this letter is formal notice of the Pensions Ombudsman’s decision to discontinue the investigation into your client’s complaint.” (Emphasis supplied)
The key point is that the Ombudsman thought that the complaint which he was being asked to investigate was one which had already been determined in the earlier claim for judicial review.

The current claim for judicial review

[30]The current claim for judicial review challenges the Ombudsman’s decision of 23 August 2006 to discontinue his investigation into Prof. Parish’s complaint. NICE and the Secretary of State were named in the claim form as interested parties, though they have not appeared at the hearing and have made no representations to the court. Permission to proceed with the claim was given by Wyn Williams J, even though he had “considerable reservations” about doing so. The hearing of the claim first took place on 17 July 2008, when it was adjourned because some of the grounds advanced orally had not been included in the original statement of grounds. Those grounds have now been extensively reformulated. There are six of them in all, but Mr Kennelly realistically acknowledged that it really comes down to one point: was the Ombudsman right to conclude that the complaint which he was being asked to investigate was one which had already been determined in the earlier claim for judicial review? And since Mr Kennelly accepts that the only difference between the original complaint to the Ombudsman and the original claim for judicial review was one of emphasis, the critical issue is whether the complaint which the Ombudsman was being asked to investigate had changed by the time he made his final decision not to investigate it. In order to decide that, it is necessary to look with care at the correspondence between Prof. Parish’s solicitors and the Ombudsman once the Ombudsman had been made aware of the previous claim for judicial review.[31]Having said that, I have not overlooked the important point that whether the Ombudsman investigates a complaint is a matter within his discretion. However, the Ombudsman exercised his discretion not to investigate Prof. Parish’s complaint because he took the view that the complaint which Prof. Parish wanted investigated had already been decided by the Administrative Court. If that conclusion was mistaken, the exercise of his discretion was flawed, and the court is entitled to intervene.

The subsequent correspondence

[32]Before the Ombudsman’s office wrote to Prof. Parish’s solicitors on 17 March 2006 with its initial response to the discovery of the earlier claim for judicial review, Prof. Parish’s solicitors had written to the Ombudsman on 16 February 2006. The letter enclosed various testimonials about Prof. Parish which were intended to demonstrate that “throughout his career he was extremely highly regarded and never at any stage in his career were any performance issues raised”. It was said that “it stretches credibility that his performance with the HDA (now NICE) could have been so very different to the performance he has demonstrated throughout his career prior to this time”. That was said to support “his contention that the HDA concocted spurious under-performance reasons for his removal in order to ensure insofar as they could that the reasons for his departure did not fall within any of the categories in the Pensions Regulations which would enable him to take advantage of his enhanced pension entitlements”.[33]This letter represented a significant departure from the complaint which had previously been made to the Ombudsman on Prof. Parish’s behalf. The original complaint was that, on the assumption that Prof. Parish had been dismissed for the shortcomings in his performance which the Chairman of the HDA had identified, his dismissal should nevertheless have been regarded as having been in the interests of the efficiency of the service. That complaint did not require the Ombudsman to decide what the real reason for his dismissal had been because Prof. Parish had been prepared for the Ombudsman to proceed on the assumption that he had been dismissed for the reasons advanced by the HDA. That was very different from what was being alleged in the letter of 16 February. What was being said in that letter was that the way he had been regarded as carrying out his professional duties throughout his career up to the time when he first went to work for the HDA suggested that he was very unlikely to have under-performed during his time at the HDA. He had therefore not been dismissed for reasons relating to his performance: spurious reasons relating to his supposedly poor performance had been given for his dismissal to deny him the enhanced pension to which he would otherwise have been entitled. Accordingly, he was now asking the Ombudsman to investigate the true reason for his dismissal, and to decide whether, in the light of what the Ombudsman concluded the true reason for Prof. Parish’s dismissal had been, his dismissal should be regarded as having been in the interests of the efficiency of the service.[34]I acknowledge that anyone reading the letter of 16 February 2006 on its own would have thought that it was just spelling out what had always been Prof. Parish’s case – namely, that the real reason for his dismissal had been concealed in order to deny him his enhanced pension – without altering the nature of his complaint. After all, the letter did not say that Prof. Parish’s case was now being put in a different way. Perhaps the reason for that was that Prof. Parish’s solicitors did not want to appear to be changing tack in case that indicated a weakening in his position. But when the letter of 16 February 2006 is read with the next letter which Prof. Parish’s solicitors wrote to the Ombudsman, the fact that a different case was being advanced becomes apparent.[35]That letter was dated 6 April 2006, and was a response to the letter of 17 March 2006 from the Ombudsman’s office. Having pointed out the error in his office’s reliance on section 146(6)(a), Prof. Parish’s solicitors went on to address the point that the substance of Prof. Parish’s complaint was “the same as” the substance of the claim for judicial review. They said:
“The substance of Prof. Parish’s present complaint is that on a proper assessment of the evidence there was no factual basis for the termination of Prof. Parish’s employment on the grounds of the efficiency of the service. The substance of the judicial review application was that, even if there were such a factual basis, NICE had no power to lawfully terminate the employment on the alleged basis of the efficiency of the service.”
At first blush, that does not make much sense. After all, the case which Prof. Parish’s solicitors were advancing was that his dismissal should have been regarded as having been in the interests of the efficiency of the service. But Prof. Parish’s solicitors were plainly making the point that the claim for judicial review had proceeded on a set of facts which Prof. Parish was prepared to assume for the purposes of that claim were correct, whereas that assumption was not being made in his present complaint to the Ombudsman. In the context of everything which had gone before, I am sure that what the author of the letter meant to say was:
“The substance of Prof. Parish’s present complaint is that on a proper assessment of the evidence there was no factual basis for the termination of Prof. Parish’s employment on the grounds of poor performance. The substance of the judicial review application was that, even if there were such a factual basis [for his termination on such grounds], Prof. Parish’s dismissal should have been regarded as having been in the interests of the efficiency of the service.”
[36]In the correspondence which followed, it is plain that the Ombudsman’s office did not appreciate what Prof. Parish’s solicitors were saying. His office was concentrating on the similarity between the complaint as originally formulated and the claim for judicial review, and it was because his officials rightly saw no difference between the two that they regarded Stanley Burnton J’s decision as resolving the issues which the original complaint had raised. The problem was that they did not appreciate that the complaint had undergone a significant change.[37]It is difficult to avoid the conclusion that Prof. Parish’s solicitors contributed significantly to that failure. It was not just the sloppy language in the letter of 6 April 2006. The real problem was that(a) they had not acknowledged what Prof. Parish’s counsel did – namely that the complaint as originally formulated was decided by Stanley Burnton J – and(b) they never told the Ombudsman’s office that the complaint was now being put very differently. They kept on referring to the need for the Ombudsman to resolve the factual issues which Stanley Burnton J had not had to resolve, and yet they failed to spell out that (a) the reason why he had not had to resolve them was because the Administrative Court had been asked to assume that the facts were as the HDA had claimed them to be, and (b) the reason why the facts had to be investigated now was because that assumption was no longer to be made. Moreover, when pressed to identify the particular facts which they were asking the Ombudsman to investigate which had not been considered by the Administrative Court, they did not make it clear in their response of 1 August 2006 to that request that Prof. Parish’s core point was that spurious allegations about his performance had been concocted in order to deny him the enhanced pension to which he would otherwise have been entitled.[38]Having said all that, had the Ombudsman’s office read the letters of 17 March 2006 and 6 April 2006 with care, it should at the very least have occurred to them that Prof. Parish may have been putting his complaint on a different basis from the way it had been put before, and they should have queried with Prof. Parish’s solicitors whether Prof. Parish was now asking the Ombudsman to investigate what he had not asked the Ombudsman to investigate before – namely what the real reason for his dismissal had been, and whether his dismissal for that reason should have been regarded as having been in the interests of the efficiency of the service. But whether the Ombudsman’s office can be criticised for failing to do that, the real point is that the Ombudsman’s decision was made on a false premise – namely that the complaint which he was being asked to investigate was one which had already been decided in the earlier claim for judicial review. The fact of the matter is that it had not been, and subject to one important reservation, that would have to result in the quashing of his decision not to investigate what he understood to be Prof. Parish’s complaint.[39]In coming to that conclusion, I have reminded myself of what I said in [13] above, namely that the Board must have thought that even if Prof. Parish’s performance had not been so poor as to render his dismissal incapable of being regarded as having been in the interests of the efficiency of the service, the Board could still withhold its agreement for Prof. Parish to be regarded as having been dismissed in the interests of the efficiency of the service. If that construction of reg. E3(2)(b)(ii) is correct, could it be said that there is in truth nothing for the Ombudsman to investigate? I do not think so. It may well be that the Board would not have answered the hypothetical question which it considered in the way that it did if it had known that the true reason for Prof. Parish’s dismissal had had nothing to do with his performance.[40]Nor have I overlooked what is said to be a serious inconsistency at the heart of Prof. Parish’s case. If as is now claimed Prof. Parish’s performance could not fairly have been criticised, then whatever the reason for his dismissal was, it could not have amounted to the termination of his employment in the interests of the efficiency of the service. At one stage in his submissions, Mr Kennelly appeared to concede as much. I do not think that that is necessarily the case. I appreciate that the Guidelines treat reg. E3(2)(b) as applying only where it is the employee’s performance which was the reason for their early retirement, but it would be necessary to look at the Guidelines as a whole, as well as the 1995 Regulations, to see whether reg. E3(2)(b) was only intended to cover what has been described as cases of “limited efficiency”. For example, if Prof. Parish had been dismissed as a result of pressure from the Department of Health – for example, because Prof. Parish had taken policy stances with which the Department did not agree – it may be difficult to say that reg. E3(2)(b) would not have been contemplated as applying to a situation of that kind.

The Ombudsman’s new point

[41]The reservation referred to in [38] above relates to a new point which Mr David Pievsky for the Ombudsman took in the course of his submissions. The point had not been foreshadowed before, but since it was a point which went to the Ombudsman’s power to investigate Prof. Parish’s complaint, it was a point which the Ombudsman had to take. It will be recalled from [23] above that the Ombudsman’s office considered whether the proceedings in the employment tribunal should operate as a bar to the Ombudsman investigating Prof. Parish’s complaint, but it concluded that they should not because the proceedings were settled without the tribunal having to make any findings. What the Ombudsman did not consider then was whether section 146(6)(a) had deprived him of the power to investigate the complaint – even though the tribunal had made no findings on the claim for unfair dismissal – on the basis that those proceedings could have been “in respect of … matters” which were the subject matter of the complaint to the Ombudsman. The point which is now taken on behalf of the Ombudsman is that the subject matter of the complaint as it is now formulated relates to what the true reason for Prof. Parish’s dismissal was, and that was one of the issues which Prof. Parish’s claim for unfair dismissal in the tribunal had to address. So even if the new way of putting Prof. Parish’s complaint was not considered by Stanley Burnton J in the Administrative Court, it would have been considered in the tribunal had the claim then not been compromised.[42]This argument is not necessarily going to succeed. The ultimate question for the employment tribunal was whether Prof. Parish’s dismissal from his employment with the HDA had been unfair. The ultimate question for the Ombudsman is whether there was maladministration on the part of the HDA in connection with its decision that Prof. Parish’s dismissal from his employment did not amount to the termination of his employment in the interests of the efficiency of the service. It may be that one of the proximate questions to be addressed on the way to resolving both of those ultimate questions is what the true reason for Prof. Parish’s dismissal was. But it is questionable whether the fact that there is a factual issue which is common to both the proceedings in the tribunal and the complaint to the Ombudsman means that “the matters which would be the subject of the investigation” by the Ombudsman have been “begun” in the tribunal.[43]However, that is not a topic on which I can come to a concluded view at present. The lateness of the point being taken meant that Mr Kennelly was not in a position to address it, and in any event it could not be considered without additional evidence – in particular, the pleadings in the employment tribunal – to see what were the particular issues which the proceedings in the tribunal raised. Since it would only be necessary to address the new point if I found in Prof. Parish’s favour that the complaint which the Ombudsman refused to investigate was not the one which had already been decided by Stanley Burnton J in the Administrative Court, both Mr Kennelly and Mr Pievsky were content for the determination of the new point to be put off for further argument at a later stage in the event that I found for Prof. Parish on that issue.

Conclusion

[44]Having concluded that the complaint which the Ombudsman refused to investigate was not one which had already been determined on the earlier claim for judicial review, the hearing of this claim for judicial review must now be adjourned for a further hearing to dispose of the new point which the Ombudsman wishes to take. I do not believe that it is necessary for any directions to be given for that hearing, but I suggest that a time estimate of two hours should be given for it. If either of the parties disagree, they should let the Administrative Court Office know that within 14 days of the handing down of this judgment.[45]It is premature to address the question of costs at this stage, but in case these proceedings are subsequently settled, but without agreement as to costs, I give the parties permission to apply for such orders for costs as they think are appropriate. The same applies to the terms of the order which the court should make in connection with the issues which this judgment addresses. It is also premature to address the question of permission to appeal at this stage, and accordingly the appropriate course for me to take is simply to order that the Ombudsman’s time for filing any notice of appeal from this judgment shall start to run(a) from when the court is notified that the new point is no longer being taken by the Ombudsman, or(b) failing that, from when judgment following the hearing at which the new point is considered is handed down.

Cited in 1 later judgment