Commenting on today’s ruling of the European Court of Justice in the German case of Pensions-Sicherungs-Verein VVaG v Günther Bauer, David Everett, Research Partner at LCP said:

“It is pleasing to see the judges take a sensible approach in this case. No doubt there will be plenty who have been watching this case unfold with interest, and who will have welcomed today’s decision – rejecting the key aspect of the earlier Advocate General’s Opinion – as in keeping with the fundamental aims of the Insolvency Directive.

It is not worth dwelling for too long on the now hypothetical potential implications of an ECJ decision endorsing the Advocate General’s Opinion, but from a PPF financing perspective today’s result represents a relief in that PPF compensation may otherwise have needed to be substantially uplifted, potentially with retrospective effect, with all that this would have meant for the PPF’s solvency position and the demands that it would be making in future on levy payers. Now, if anything needs to happen to PPF compensation, it will be at the margin.”