An interesting report by Norma Cohen in the FT this morning on a key test case involving Sea Containers’ legal challenge to a ruling made by the Pensions Regulator last June, when ‘the Bermuda-based, US-domiciled company, received the regulator’s first ever Financial Support Direction last year after the regulator, which is chaired by David Norgrove, concluded that the two schemes of the company’s GNER rail subsidiary were “in a parlous state”.’ Moral hazard involving pension schemes is a difficult concept it seems for corporates. Last year I had to advise an Austrian client and his lawyer on the powers of the UK Pensions Regulator. They didn’t believe it. All the managing director could say was, “No. Surely this cannot be right. This is like Romania”. At the time the received wisdom among pension lawyers (as Norma Cohen notes) was that the Pension Regulator’s ability to use his powers on overseas companies and those in bankruptcy were in doubt. And so I also advised. In the event, the Austrian client did not pursue the opportunity and we never had to decide how best to deal with a UK pension scheme in significant deficit. Probably just as well.