Execution of deeds: an expensive mistake
By Kate Richards
The recent decision of the High Court in Gleeds is an example of the serious consequences of the failure to follow the correct formalities for the execution deeds.
The scheme employer in this case was a partnership. Since 1 August 1990, the law has required that in order for a partnership to validly execute a deed, each partner’s signature must be witnessed. In the period from 1990 to 2012, the Gleeds partners signed a whole series of deeds without their signatures being witnessed. The High Court has found that none of the deeds were validly executed and are therefore ineffective. According to the judge, this could cost the scheme £45m.
The scheme started out in 1974 as a defined-benefit scheme that did not require any contribution from the members. The various documents that have now been found to be invalid include a Barber equalisation deed, deeds establishing money purchase sections, deeds introducing member contributions and a deed stopping future accrual altogether…
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