Beddoes Order
In High Court proceedings, it is vital for trustees to have the comfort and protection of knowing that they may recover the legal costs incurred in the proceedings from the scheme, whether prosecuting or defending a claim and regardless of whether, ultimately, they win or lose. A Beddoes Order (named after the case in which relief was first granted) is a court order which may provide this comfort to trustees. It avoids any risk of the trustees having to pay costs personally.
By its nature, the uncertainty of litigation will mean it is always risky to take steps in proceedings without the protection afforded by a Beddoes Order, even in what appears, on the face of it, to be a clear cut case. As well as the costs of the substantive proceedings, there may be significant costs involved in making the application for a Beddoes Order. The trustees may as a result face the prospect of two very expensive sets of proceedings running contemporaneously.
Therefore, trustees should consider whether there are any alternatives available to them in relation to the costs risks of litigation at the outset of a dispute. These may include an indemnity from the employer, third party insurance policies, applications made on paper, as well as focusing on whether it is really necessary for one or more representative beneficiaries to be joined as a party to the application.
Giving thought to these (and any other alternatives that may be appropriate) may help trustees reduce the legal costs and expenses of being involved in heavy-weight and/or complex litigation.
Commonly used abbreviations in pensions
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