The five companies - the Prudential, Hill Samuel, TSB, GAN Life and Irish Life - want all cases of alleged personal pensions mis-selling to be dealt with by the Securities and Investments Board, which has set up a review system.
But the reviews system timetable has slipped badly, with teachers who should have had their cases considered by December 31 last year being told they will have to wait another 12 months to learn how much compensation they should receive (TES, November 24, 1995).
About 81,000 claims have been lodged by people who say they were wrongly persuaded in the late 1980s by insurance salesmen and brokers to quit their employers' pension scheme and take out private pension plans. Some 2,000 of these claims have been made by teachers who left the Teachers' Superannuation Scheme, and who rejoined the TSS in the past two to three years when it became clear how much better off they would have been if they had never left.
One member of the National Association of Schoolmasters Union of Women Teachers has already been awarded Pounds 80,000 compensation for the bad advice she was given, and teachers' claims average about Pounds 20,000 each. Their losses were caused by, among other things, the removal of the employer's pension contribution once they left the TSS, the costs of setting up a private scheme, and, in many cases, lower returns on their money.
As many people involved in the mis-selling scandal went to the courts to obtain compensation rather than wait for the SIB review to grind through, the five big pension companies tried to argue that the courts should wait for the SIB. But at the Bristol mercantile court last week Judge Raymond Jack, QC, dismissed their application for a stay of proceedings. They were also refused leave to appeal.
Barry Fawcett, assistant general secretary at the National Union of Teachers, said: "We are delighted to have our members' right to go to court spelt out like this. We have issued quite a number of writs over mis-sold personal pensions, to safeguard our members' interests under the statute of limitations. We are now looking to get through as many of these as possible without litigation."