THE threat of a legal challenge from a pro-Israel activist group is looming over Islington Council’s attempt to divest its pension scheme from companies complicit in human rights ­violations – but the pensions chair insists the committee is still on track to meet its goals.

At a pensions committee meeting on Tuesday, chair Cllr Paul Convery told the room the chances of a legal challenge from UK Lawyers for Israel (UKLFI) is “quite high”.

The longtime Labour councillor explained that the council plans to move its investment holdings to local government investment fund pool London CIV, which is set to launch an ethical pensions fund excluding companies involved in the weapons, tobacco, predatory lending and pornography trades, as well as those listed by the United Nations Human Rights Council (UNHRC).

He also said a final decision on whether to move ahead with the planned divestment should come in December or early months of 2027 at the latest.

The pensions committee first announced plans to divest from companies linked to Israel’s war in Gaza in 2024, flagging specific companies such as controversial software giant Palantir as targets for divestment.

The council conducted a survey of pension scheme members in May and June this year which found 80 per cent of respondents were in support of the proposed changes.

UKLFI published an open letter warning the council against its divestment plans on August 31.

In a blog post on its website, the group said “the survey was based on misleading information and that adopting the proposals would breach statutory guidance and fiduciary duties”.

The legal group argues the council’s plans risk violating the law on various fronts, including being non-compliant with the Equality Act, and challenged the use of the term “genocide” to describe Israel’s military activity in campaigning material distributed by UNISON and the Palestine Solidarity Campaign around the time of the survey.

The letter also argued that wording used in the survey highlighting Palantir’s involvement in “the current Israel-Palestinian conflict” paired with a lack of reference to the tech giant’s contracts with the Ukrainian and UK armed forces was a “kind of dog-whistle, activating antisemitic responses”.

The meeting was attended by a group from the Islington Palestine Solidarity Campaign.

Attendee and retired pension scheme member Sussan Rassoulie asked the committee whether the planned divestment was still “on track” and if a potential legal challenge was making progress “more difficult”.

She also suggested that foreign secretary Ed Miliband’s announcement of sanctions against illegal Israeli West Bank settlements could speed up progress.  Cllr Convery told the chamber that although he recognised some people feel the council should be “going further and moving faster”, the council has someone “looking over our shoulder”, and risking a legal challenge would be both costly and set back progress for all councils hoping to complete a similar divestment programme. Islington has been used as an example by campaigners in other boroughs.

“We are pathfinders in this,” he told the committee. “We are learning the ropes and taking legal advice.”

UKLFI, whose members include barristers and other legal professionals, argued that although the survey’s response rate of 6.1 per cent was deemed “very respectable” by survey contractor Prevision Research, support for the divestment was not strong enough to meet statutory requirements.

Central government guidelines also prevent schemes from divesting in a way that poses a significant risk of negatively impacting the fund’s returns, something the lobby group pointed to as a potential consequence of Islington’s proposed divestment in its warning.

At Tuesday’s meeting, the committee made clear their proposals did not risk violating this requirement.

Some attendees were dissatisfied with the commitments made in the meeting.

Esme Waterfield told the Tribune: “Back in July 2024, pensions committee chair Paul Convery made a commitment to a divestment to one of the funds that they invest in.

“We’re still waiting for that re-iterated commitment. We don’t have a timeline and there is not very much clarity about what’s happening.”