By Darren Clayton, Doyle Clayton Solicitors, London


Coming of age

While lawyers in Pakistan are taking to the streets in an awe-inspiring protest in aid of democracy, it is hard to see many of us in Britain standing out in protest over much more than an over-oaked Chardonnay at the local law society cocktail party. And yet, not so - here too there have been reports of a new group of legal radicals, steeled to action within the very magic circle itself, known as the 'grey panthers'.



For this was the most excellent name given to a group of partners (d'un certain age) at none less than Freshfields, and which features large in the recent tribunal claim of one of their number in what may well be a seminal case in the field of age discrimination (Bloxham v Freshfields Bruckhaus Deringer 2205086/2006 (ET)).



The case is perhaps the first to really address the issue of justification under the Employment Equality (Age) Regulations 2006 (the one that gave us all an excuse to hold client seminars last year). It also seeks to grapple with the unusual problem with which the regulations must deal in that the regulations simplistically protect old(er) and young(er), and yet changes made to assist one age group will often by definition disadvantage the other.



Mr Bloxham was a former partner in the firm who brought his claim in respect of alleged discrimination in his retirement arrangements/pension rights. In short, his claim related to changes the firm decided to make to its partnership pension arrangements in an effort to address what they called 'inter-generational unfairness'.



The difficulty was that the scheme was unfunded, with pensions being paid out of ongoing profits and being based on 'partnership points'. A 10% cap on profits applied, but with the ratio of pensioners to active partners shifting, projections showed this was likely to be reached around 2018, reducing the value of a partnership point. This would lead to the active partners paying out proportionately more profit than ever before, while expecting to receive fewer benefits on their own retirement.



Proposals were made and consultation took place with, among others, a group of older partners. Ultimately, new arrangements were put in place, with transitional provisions adopted for those already above or near retirement age - including Mr Bloxham. These included relaxing the process for requesting 'early' retirement and doubling the value of any partnership points already earned.



Under the scheme, partners could retire at 55 and receive a pension based on their accumulation of partnership points. Partners could retire earlier with consent but would suffer a discount on their pension to a minimum of 20%. Mr Bloxham was unfortunate enough to be 54 when the old scheme closed and under the new one was expected to be 33% worse off. If he retired at 54, he would instead suffer a 20% discount and, feeling he had no choice, he retired at that age.



Under the age regulations, it is of course unlawful for a firm to discriminate against a partner on grounds of age in the way they afford him 'access to benefits', or by subjecting him to a detriment in partnership arrangements. Unlike other forms of discrimination, however, even direct age discrimination can be justified, provided it is found to be a 'proportionate means' of achieving a 'legitimate aim'.



Mr Bloxham was successful in arguing that he had been treated less favourably on the grounds of age in suffering the 20% discount (at the age of 54 he was treated differently to the 'age group' of 55 and over), though not in his inability to defer his pension (those younger would still have suffered at least a 20% discount if they deferred). His claims of indirect discrimination (based on there being a discriminatory provision criterion or practice) also failed. This was, however, only round one.



In round two, Freshfields successfully argued that the discriminatory effect could be justified as a proportionate means of achieving a legitimate aim given:

l That it had made the reforms to deal with the disadvantage the original scheme caused the younger 'active' partners;

l That no less discriminatory approach had been identified during the consultation; and

l There had been extensive consultation.



The tribunal was impressed by these arguments but noted that, when pursuing such an aim, maintaining the status quo for those closely affected did not absolve a firm from considering other steps - although here Freshfields had clearly done so.



Sad though this was for Mr Bloxham, the decision appears to have been the right one in the circumstances, and for those of us whose pensions are unlikely to cover our bar bills, we do not anticipate an outpouring of grief in every corner.

However, although the case is helpful in exploring the difficult question of justification, it does stumble in providing help with the further question of whether 'aims' which are themselves discriminatory can really be used to justify acts of discrimination (a feature of balancing the needs of the young against the old). It is relatively clear that this cannot be done in cases of indirect discrimination, but it is less clear with regard to direct discrimination (which can unusually be justified under the age regime). The suggestion in the case is, of course, that making things fairer for the young at the expense of the old could be used to justify the firm's actions but some greater guidance will be required. Perhaps Mr Bloxham will be kind enough to appeal?

From the outset, this has been one of the unique problems brought to us by the age regulations. Equally, the regulations provide an unusual protection in that while we will remain the same gender through our lives (most of us anyway), and the same race etc, we will all belong to all ages at some stage of our lives - if we only live long enough. It is for this reason that the focus of the regulations has to be on 'age groups', so that comparators can be identified in an area where we are all 'moving targets'.

I have suggested previously that perhaps a shared appreciation of the works of Abba might be sufficient to establish an 'age group'. Perhaps this will also cover those of us for whom the new pin-ups will be the 'grey panthers'.