Legal challenge to Cowan v Scargill ruling?

Here's an interesting bit from the Responsible Investor website:

One of the biggest legal barriers to UK pension funds making ethical decisions on their investments – the Cowan v Scargill ruling – could face a legal challenge from trades unions as part of an ongoing battle over the investment policy of the £4.2bn (€5.8bn) Merseyside pension fund.

Members of the Trades Union Congress (TUC), the umbrella organisation of UK unions, say they are taking legal advice after the fund’s trustee board voted against resolutions to halt investments in companies involved in the arms trade.
The unions say they will mount a fresh challenge to the pension fund’s investment policy at a meeting on January 28th.

In November, 2007, the Merseyside Pension fund trustee board voted unanimously against motions put forward by the councils of Liverpool and St Helens to ban arms investments. Liverpool council’s resolution said: “Investment in the arms trade is not compatible with good corporate, social and ethical governance”. The councils have two trustee representatives on a board of seventeen.

Alec McFadden, president of the TUC in the North West of England, said the union, which has members that belong to the scheme, wanted withdrawal of money from companies producing cluster bombs. He said it was contacting European pension funds who have made similar boycotts: “We want to fight the fact that the pension fund is invested in these companies and we are being told that the reason is because it has to invest for purely financial reasons because of Cowan v Scargill. We disagree and we will fight this.”

Dutch pension giants ABP and PGGM stopped investing in companies making cluster bombs after coming under fire in a Dutch current affairs programme that prompted thousands of complaints from pension scheme members. McFadden said the union had taken legal advice over a challenge to Cowan v Scargill and that lawyers have told it they could take the case on pro bono.

The Merseyside pension fund is understood to have about £14m linked to investments with firms that are involved in aspects of the arms trade, including BAE, Boeing and Rolls-Royce, much of which is invested in passive funds.