The recent UK Supreme Court judgment in Re Nortel GMBH (in administration) and others; Re Lehman Brothers International (Europe) (in administration) and others  UKSC 52 (the Nortel Appeal) overturned the decisions of the High Court and the Court of Appeal, which previously gave “super-priority” to liabilities under financial support directions and contribution notices issued by the Pension Regulator (PR) against companies following their insolvency.
Pursuant to the UK Pensions Act 2004 (the Act), the PR is given a number of “moral hazard” powers which allows it to impose liabilities upon connected and associated companies who are not necessarily pension scheme employers (“target companies”).
The most relevant of these powers are:
(a) Financial Support Directions (FSDs); and
(b) Contribution Notices (CNs).