DENMARK - Danica Pension has won a long-running legal battle over fees, after the Danish Supreme Court ruled in its favour in a case brought by the Consumer Council on behalf of four plaintiffs.

The Supreme Court on Friday upheld a 2008 ruling by the High Court of Western Denmark that Danica Pension may charge DKK48 (€6.40) per month to cover costs related to pension payments.

The Danske Bank subsidiary has more than 600,000 customers and manages assets of DKK281bn.

Jesper Hjetting, vice-director at Danica Pension, told IPE: "We are pleased to see this case has come to an end. The court ruling has shown we have treated our customers in fair and proper ways according to Danish law. That means a lot to us."

But Morten Bruun Pedersen, economist at the Consumer Council (Forbrugerrådet) - an independent watchdog - said the ruling was bad for consumers.

"In our opinion, the pension fund is taking money from the consumer and putting it in its own equity capital," he said.

The council saw this as a test case on whether companies may legally pass on costs to consumers, via their own fees.

The Supreme Court ruled that there are costs associated with the administration of the type of insurance product the case concerned.

It also noted in its judgment that there was no evidence the Danish FSA (Finanstilsynet) had raised any objections to the fees levied by Danica Pension - which are regularly reported to the regulator.

The background for the case was a decision in 2005 by the Insurance Board of Appeal (Ankenævnet for Forsikring) backing customers, saying that Danica Pension could not legally collect the fee.

But the commercial pension fund refused to abide by the decision, in which the vote had been passed three to two.

While the Supreme Court ruling is the end of the line within the Danish justice system for this particular case, the Consumer Council said it would now try to improve conditions on fees for consumers through negotiation with the authorities and associations in the pensions sector.

Bruun Pedersen said: "We hope they will start to think about the issue in broader terms within the financial sector, to increase transparency on fees."

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