British Airways to appeal High Court ruling on discretionary increases

26 May 2017

British Airways (BA) recently lost a landmark trial to block its pension trustees' decision to award a discretionary increase in 2013 following a seven week court battle. Trustees of the Airways Pension Scheme (APS) successfully defended the payment from BA's arguments that the trustees had acted improperly, had acted outside of their powers, and had taken irrelevant considerations into account.

Professional Pensions has reported that the High Court has granted BA permission to apply to appeal to the Court of Appeal, a move that could extend the litigation for at least eighteen months.

The barrister acting for the trustees, Keith Rowley QC, said BA had "made a mountain out of a mole hill".

The airline is expected to appeal on the grounds that the payment was "benevolent" and contrary to the purpose of the scheme. The paperwork is expected to be filed by 30 June, with a court date then expected in late 2018.

At the hearing BA was also granted an injunction to block trustees from paying the 0.2% increase until the appeal has been heard. However, if BA is unsuccessful at the appeal, BA will be required to pay damages to individual members of the 0.2% increase plus 2% interest above the base rate.

The trustees estimated approximately 6,100 members will miss out on the increase because of both the prior litigation and upcoming appeal; 3,800 who have already died, and an estimated 2,300 who will die before the appeal judgement is published.