If you're dismissed from your job on grounds of ill-health, you'll lose not only your earnings, but also your fringe benefits.

A typical fringe benefit most people enjoy is the contributions made to their pension scheme by their employer, and the benefit of pension payments out of the scheme when they retire.

In the field of personal injury litigation, a compensation claim for loss of these 'pension rights' is a well recognised 'head of loss' that arises when an injured individual is forced to take ill-health retirement.

This is a head of loss that has in some cases attracted quite significant awards, especially when the pension in question has been one based on a final salary scheme.

Until now, however, to claim this loss it has been a requirement to show that before the accident, the claimant was both a member of a pension scheme and making contributions to it, either directly or indirectly. If you weren't in a scheme (and many employees are not) there can be no loss and thus no claim for 'loss of pension rights'.

This was the situation in which Mr Jarrett found himself following his dismissal on grounds of ill-health due to the injuries he suffered in a road traffic accident. Although he'd been employed for a number of years before the accident by the same employer, he'd not joined the company pension scheme, so was never going to be entitled to draw a company pension.

Fortunately for Mr Jarrett, his claim came to trial after the introduction of the Pensions Act 2008. This Act introduced the concept of compulsory pension provisions, meaning that from 2012 employers will have to automatically enrol most of their staff in a pension scheme and pay contributions for employees of at least 3 %.

Accordingly for Mr Jarrett, we were able to plead a loss of pension rights claim based on the argument that in 2012 Mt Jarrett would have been place in a pension scheme. Our argument was accepted by the court and an award for loss of pension rights was made on the basis of the calculations we submitted.

And while the award in Mr Jarrett's case was a modest sum of just under £ 4,000, the principle we adopted, and which the court accepted, will be applicable in other similar cases in which the resulting loss may be much higher, depending on the claimant's pre-dismissal earnings.

Tell us what you think

All documents should be read and used in accordance with the terms and conditions. This document is for your general information only and is not a detailed statement of the law. It is provided to you free of charge and should not be used as a substitute for specific legal advice. If you require specific legal advice please contact our helpline on 03700 86 86 86.