The implied duty of trust and confidence for pension lawyers
Produced in partnership with Clive Weber of Wedlake Bell
The implied duty of trust and confidence for pension lawyers

The following Pensions practice note produced in partnership with Clive Weber of Wedlake Bell provides comprehensive and up to date legal information covering:

  • The implied duty of trust and confidence for pension lawyers
  • Basic principles of the duty
  • Limits on the duty
  • Restatement—the Prudential case
  • Applying the 'Prudential' principles—IBM
  • IBM 2012 Decision
  • IBM 2014 Breaches Decision
  • IBM 2017 Decision
  • Reasonable expectations
  • Application in other cases
  • More...

The implied duty of trust and confidence for pension lawyers

Demonstrating an employer has breached its duty of good faith is no easy matter.

The implied duty of good faith (known as the implied duty of trust and confidence in the contractual context) was first established in a pensions context in Imperial Group Pensions Trust v Imperial Tobacco (Imperial) in 1991 and has been developed in subsequent cases. A modern restatement emerged in the High Court decision in the Prudential case in 2011. As the judge stated in Prudential, the duty of good faith cannot be 'freeze-framed' at the date of the Imperial decision.

However, the High Court in the IBM v Dalgleish case in 2014, in deciding the employer had breached its duty of good faith, went a step too far. This high watermark of the 'in good faith' requirement has significantly receded: in August 2017, the Court of Appeal reversed almost the entirety of the High Court's 2014 IBM v Dalgleish decision and appears to have set a very high bar for breach of the duty of good faith (for further information, see ‘Applying the 'Prudential' principles—IBM’ below and News Analysis: Bar set high for breach of duty of trust and confidence in pension cases (IBM v Dalgleish)).

From a practical perspective, the key issue is on which side of the line does the employer's conduct

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