The Court of Appeal in the UK has unanimously dismissed an appeal by two members of the Universities Superannuation Scheme (USS) who had tried to bring claims against current and former directors of the pension fund on failure to come up with a coherent plan to move investments out of fossil fuels.
The Court of Appeal proceedings started on 13 June with initially Neil Davies and Ewan McGaughey appealing a judgment of the High Court in May 2022 where they had been refused permission to take forward any of their four claims.
In a written ruling, Judge Sarah Asplin said that the parts of the lawsuit relating to USS investment in fossil fuels were an attempt to challenge the scheme’s management and investment decision “without any ground upon which to do so”.
She said that there was nothing “in the pleading or evidence to suggest USS has exercised its powers in improper fashion”, adding, therefore, that the claim was “bound to fail”.
Trying to bring a claim against USS last month, Davies and McGoughey argued that commitment to international climate agreements meant that continued investment in fossil fuels was a huge investment risk.
They also claimed that pension scheme directors must have a credible plan to address these risks.
The pair also argued fossil fuel companies have assets that cannot be exploited if they are to comply with climate treaties such as the 2015 Paris Agreement.
However, lawyers representing USS argued the claims from Davies and McGoughey had no merit and should be dismissed.
Welcoming the Court of Appeals’ decision, a USS spokesperson said: “It will be clear to anyone reading the Court of Appeal’s detailed judgment that the underlying claims these individuals sought permission to pursue had absolutely no merit and they have rightly been dismissed – just as they were by Mr Justice Leech in the High Court.
“It is of deep regret that scheme funds – money intended to pay members’ pensions – have had to be spent defending this action, particularly when much of the material considered by the courts in dismissing this case was readily and publicly available.”
The spokesperson added: “We sincerely hope, having now had their arguments considered and dismissed by two courts, that this puts an end to matters and we don’t have to spend any more of the scheme’s money defending these meritless claims.”
Leigh Day, the solicitors firm representing Davies and McGoughey, declined to comment at this time.
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