BT initiated the case to seek approval to switch the inflation index used for the purposes of increasing the pensions of members of 'Section C' of the BT Pension Scheme from RPI to the Consumer Prices Index (CPI). As CPI is generally lower than RPI this change would reduce the liabilities in the BT Pension Scheme by hundreds of millions of pounds.

To support its arguments, BT engaged Paul Johnson, the director of the Institute of Fiscal Studies and the author of a review of UK price indices for the UK Statistics Authority, to write a report answering specific questions in relation to RPI.

In general terms, Mr Johnson argued that RPI is a flawed measure that overstates inflation by up to 1% per year. He pointed out that ONS has decided not to keep the methodology for calculating RPI up to date and that it no longer has 'National Statistics' status.

The representative beneficiary's legal team also engaged an expert witness. Simon Briscoe was formerly the Statistics Editor at the Financial Times and is a council member of the Royal Statistical Society.

Mr Briscoe argued that the significance of RPI's reported flaws was overstated and applied more to its use for macro-economic purposes than as a measure of inflation as experienced by pensioners. He concluded that RPI is the best index available to measure inflation as experienced by pensioners of occupational pension schemes.

Over the course of this morning's (Monday, 11 December) proceedings both expert witnesses were cross-examined.

Later in the day the focus shifted to technical legal issues related to the drafting of the trust deed and rules of the pension scheme. Arguments related to these points are likely to continue until Wednesday when the case is expected to conclude.