The Element Six case resumes in the High Court today with the continuing cross-examination of expert witness Vernon Holgate, who took the stand on Thursday.
In a case that is likely to cause ripples across a number of industries and the pension sector itself, workers at the Shannon manufacturing facility are suing the trustees of their defined benefit retirement fund, which the company closed in late 2011. The plaintiffs claim that the trustees were in breach of their duty by failing to demand that the company ensure that the scheme had sufficient funds to pay all the benefits due.
The case ultimately turns on what the trustees did or did not do doing a period between June and December 2011. Broadly speaking, the plaintiffs say that the trustees should have made a contribution demand before a vote to wind up the scheme in November.
There are a few issues that Holgate has highlighted in his evidence. First, he argues that the actuary, Willis, was really acting for the company, which wanted to engineer the scheme’s wind up. The defence has already challenged this.
The obvious point is, that if the trustees felt that the actuary was not behaving independently, should they have sought advice elsewhere?
Holgate has also highlighted a suggestion from the company, at a subcommittee set up to review the pension issue, that the trustees change their law firm – Holmes O’Malley Sexton – which he said was “unprecedented” in his experience.
The defence has taken issue, arguing the company was simply concerned that the trustees had sufficiently robust advice, and was not seeking to get them to change to a “less good” adviser.
The trustees' vote in favour of the company's proposal to wind up the fund was split 50/50, with worker-nominees against and employer representatives for. Chairman Danny Coady, who was finance director of one of the group companies, used his casting vote to carry the day.
Holgate says that this was unusual, as trustees tend not to get into situations where they are divided over an issue in this way.
