The High Court rules that Pensions Act Financial Support Direction and Contribution Notice claims are payable as expenses

On Friday 10 December Mr Justice Briggs ("Briggs J") handed down judgment in the two applications for directions made by the two sets of administrators appointed by the UK court in the Nortel and Lehman insolvencies. Hogan Lovells act for the Pension Protection Fund and the Trustees of the Nortel Networks UK Pension scheme in this case. The cases considered the effect of the financial support direction ("FSD") and contribution notice ("CN") regimes under the Pensions Act 2004 where the company which is the target of an FSD or CN goes into administration or insolvent liquidation prior to the issue of an FSD or CN. Briggs J had to determine whether the cost of complying with the FSD was (a) an expense of the administration or liquidation, or (b) a provable debt within the administration or liquidation, or (c) a non-provable claim to be paid only out of any surplus available after the payment of all creditors in full.