Accessing a bankrupt's pension in a case of fraud

The judgment stated that the debts had been incurred in respect of fraud within section 281(3) of the Insolvency Act 1986. This was significant as section 281(3) provides that a bankrupt is not discharged from any bankruptcy debt incurred by means of fraud. The defendant subsequently became bankrupt. His rights under a personal pension scheme did not fall into his estate in bankruptcy because of the protection given to pension rights by section 11 of the Welfare Reform and Pensions Act 1999.

Section 281(3) meant that the defendant’s debt was not extinguished by his bankruptcy. Following the bankruptcy, the defendant’s rights under the personal pension scheme were his primary remaining asset. The claimants (victims of the defendant’s fraud) sought to enforce the judgement against him through directions under section 37 of the Senior Courts Act 1981, to enable access to the funds in his personal pension. The High Court followed Blight v Brewster and agreed to make the orders sought and to direct the defendant to delegate to the claimants:

• power to notify HMRC of the revocation of his enhanced protection in relation to his pension rights; and
• the defendant’s rights under the pension scheme to call for payment of a lump sum and to put his pension in payment.

Bacci v Green, [2022] EWHC 486 (Ch), 7 March 2022

Authored by the Pensions Team.