The question of who is entitled to payment of compensation for PPI where a debtor has been discharged from his/her Protected Trust Deed (PTD) had given rise to conflicting judicial decisions in Scotland. In our previous article, we highlighted the uncertainty created following the decision of Sheriff Reid in the case ofDonnelly v The Royal Bank of Scotland (Donnelly) and the decision of Lord Jones in Dooneen Limited, t/a Mcginnes Associates and Douglas Davidson v David Mond (Dooneen).

The question of who is entitled to payment of compensation for PPI where a debtor has been discharged from his/her Protected Trust Deed (PTD) has given rise to conflicting judicial decisions in Scotland. In our previous article, we highlighted the uncertainty created following the decision of Sheriff Reid in the case of Donnelly v The Royal Bank of Scotland and the decision of Lord Jones in Dooneen Limited, t/a Mcginnes Associates and Douglas Davidson v David Mond.

It is estimated that there were almost 40,000 Protected Trust Deeds (“PTD”) entered into between 2005 and 2010. Similar to an IVA, a PTD is a voluntary arrangement in which the debtor conveys his estate to an insolvency practitioner (“the Trustee”) to be held on trust for the benefit of creditors. A large number of those who enter into a PTD do so because of borrowing that they have incurred on credit cards.

Tata Steel Limited (Tata) has been intending to end their British operations for some time. As yet, it has been unable to do so as its subsidiary, Tata Steel UK (TSUK), is the principal employer of one of the UK’s largest defined benefit (DB) schemes. The obligations and liabilities under the British Steel Pension Scheme (BSPS) have been deemed by prospective buyers as too great to take on with the Scheme currently running at a deficit of approximately £700 million.

Overturning the High Court and Court of Appeal decisions in Bloom and Others v The Pensions Regulator and Others, the Supreme Court has ruled that financial support directions (FSD)and contribution notices (CN) issued by The Pensions Regulator in insolvencies create “provable debts” which should be given unsecured, non-preferential, creditor ranking.

In this August edition of the Pensions E-Bulletin, we look at the Pensions Regulator’s statement on its approach to financial support directions (FSDs) in insolvency situations, the shortened guidance on incentive exercises issued by Pensions Regulator following the publication of the industry code of good practice as well as noting the updated guidance on multi-employer scheme departures and the consultation by the Takeover Panel on proposals relating to pension scheme trustees. 

FSDs and insolvency – the Regulator’s statement