Carson & Anor v Secretary of State for Work and Pensions [2003] EWCA Civ 797

“1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law…”

“In the case of contribution-based jobseeker’s allowance, the amount payable in respect of a claimant (‘his personal rate’) shall be calculated by – (a) determining the age-related amount applicable to him; and (b) making prescribed deductions in respect of earnings and pension payments. (2) The age-related amount applicable to a claimant, for the purposes of sub-section (1)(a), shall be determined in accordance with regulations.”

“(1) In the case of contribution-based jobseeker’s allowance, the age-related amount applicable to a claimant for the purposes of section 4(1)(a) shall be – (a) in the case of a person who has not attained the age of 18 [£31.45] per week; (b) in the case of a person who has attained the age of 18 but not the age of 25, [£41.35] per week; (c) in the case of a person who has attained the age of 25 [£52.20] per week.”

“(1) Contributory benefits under this Part of this Act are of the following descriptions, namely – ... (f) retirement pensions of the following categories - (i) Category A, payable to a person by virtue of his own contributions”

“(1) Entitlement to any of the benefits specified in section 20(1) above... depends on contribution conditions being satisfied... (2) The class or classes of contribution which, for the purposes of subsection (1) above, are relevant in relation to each of those benefits are as follows: Category A retirement pension: Class 1, 2 or 3". S.44 is important: “(1) A person shall be entitled to a Category A retirement pension if - (a) he is over pensionable age; and (b) he satisfies the contribution conditions for a Category A retirement pension specified in Schedule 3, Part I, paragraph 5; and, subject to the provisions of this Act, he shall become so entitled on the day on which he attains pensionable age and his entitlement shall continue throughout his life. ... (3) A Category A retirement pension shall consist of - (a) a basic pension payable at a weekly rate; and (b) an additional pension payable where there are one or more surpluses in the pensioner’s earnings factors for the relevant years. (4) The weekly rate of the basic pension shall be £72.50 ...”

“Except where regulations otherwise provide, a person shall be disqualified for receiving any benefit under Parts II to V of this Act ... for any period during which the person - (c) is absent from Great Britain; or (d) is undergoing imprisonment or detention in legal custody.” (c) is absent from Great Britain; or (d) is undergoing imprisonment or detention in legal custody.”

“Regulations may provide for a person who would be entitled to any such benefit but for the operation of any provision of this Act ... to be treated as if entitled to it for the purposes of any rights or obligations ... which depend on his entitlement, other than the right to payment of the benefit.”

“Subject to the provisions of this regulation and of regulation 5 below, a person shall not be disqualified for receiving ... a retirement pension of any category ... by reason of being absent from Great Britain.”

“(1) Where regulations made in consequence of an order under section 63 of the Social Security Act 1986 (up-rating of benefits...) provide for the application of this regulation to any additional benefit becoming payable by virtue of that order, the following provisions of this regulation shall... have effect in relation to the entitlement to the benefit of persons absent from Great Britain. ... (3) ... where a person is not ordinarily resident in Great Britain immediately before the appointed date, the provisions of these regulations (except this regulation) shall not, unless and until he becomes ordinarily resident in Great Britain, affect his disqualification while he is absent from Great Britain for receiving - ... (c) ... any additional retirement pension of any category..., if that person had... become entitled to a retirement pension... before the appointed date”. ... (c) ... any additional retirement pension of any category..., if that person had... become entitled to a retirement pension... before the appointed date”

“3. Regulation 5 of the Social Security Benefit (Persons Abroad) Regulations 1975 (application of disqualification in respect of up-rating of benefit) shall apply to any additional benefit payable by virtue of the Up-rating Order.”

“3. The Commission has considered the applicants’ complaint under Article 1 of the Protocol. It first recalls that it has previously held that although this provision does not as such guarantee a right to a pension, the right to benefit from a social security system to which a person has contributed may in some circumstances be a property right protected by it. However the Commission also held that Article 1 does not guarantee a right to a pension of any particular amount, but that the right safeguarded by Article 1 consists, at most, “in being entitled as a beneficiary of the social insurance scheme to any payments made by the fund” (App. No. 5849/72, Müller v. Austria, D.R 3, p.25 at p. 31). It has further held that before the right to benefit protected by Article 1 can be established, it is necessary that the interested party should have satisfied domestic legal requirements governing the right (App. No. 7459/76, X. v. Italy, D.R. 11, p. 114). In the present case when the applicants emigrate to Australia their entitlement to benefit from the United Kingdom pension scheme will come to be regulated by different rules of domestic law, under which they will cease to qualify for payment of future pension increases contemplated by the relevant legislation. To that extent they will not satisfy domestic legal requirements to benefit from the United Kingdom pension scheme. Even if the right to benefit from a scheme will normally also apply to the regular increases this is not necessarily the case where a person leaves the country where the specific scheme operates. The Commission notes that in many countries specific restrictions as to the payment of social security benefits to foreign countries exist or have existed… In the Commission’s view such operation of domestic law does not amount to a deprivation of possessions infringing Article 1 of the Protocol and there is thus no appearance of any breach of this provision.”

“The Commission recalls that it has previously held that, although Article 1 of Protocol No. 1 does not, as such, guarantee a right to a pension, the right to benefit from a Social Security system to which a person has contributed may, in some circumstances, be a property right protected by it… However, the Commission has also held that Article 1 does not guarantee a right to a pension of a particular amount, but that the right safeguarded by Article 1 consists, at most, ‘in being entitled as a beneficiary of the social insurance scheme to any payments made by the fund’… in accordance with domestic legal requirements … Further, the Commission has held that the ‘freezing’ of a pension at a particular level when a person leaves the United Kingdom does not amount to a deprivation of possessions infringing Article 1 of the Protocol...”

“The Court has said on many occasions that article 14 comes into play whenever ‘the subject matter of the disadvantage constitutes one of the modalities of the exercise of the right guaranteed’, or the measures complained of are ‘linked to the exercise of a right guaranteed.”

“36. According to the court’s established case law, Article 14 of the Convention complements the other substantive provisions of the Convention and the Protocols. It has no independent existence since it has effect solely in relation to ‘the enjoyment of the rights and freedoms’ safeguarded by those provisions. Although the application of Article 14 does not presuppose a breach of those provisions – and to this extent it is autonomous – there can be no room for its application unless the facts at issue fall within one or more of them. 37. The applicant and the Turkish Government argued that Article 14 of the Convention was applicable in conjunction with Article 1 of Protocol No. 1. They referred to the reasoning of the Commission, which found that the award of emergency assistance was linked to the payment of contributions to the unemployment insurance fund. 38. The Austrian Government, however, submitted that emergency assistance did not come within the scope of Article 1 of Protocol No. 1. Entitlement thereto did not result automatically from the payment of contributions to the unemployment insurance fund. It was an emergency payment granted by the State to people in need. Consequently, Article 14 of the Convention was not applicable either. 39. The Court notes that at the material time emergency assistance was granted to persons who had exhausted their entitlement to unemployment benefit and satisfied the other statutory conditions laid down in… the… Act. Entitlement to this social benefit is therefore linked to the payment of contributions to the unemployment insurance fund, which is a precondition for the payment of unemployment benefit. It follows that there is no entitlement to emergency assistance where such contributions have not been made. 40. In the instant case it has not been argued that the applicant did not satisfy that condition; the refusal to grant him emergency assistance was based exclusively on the finding that he did not have Austrian nationality and did not fall into any of the categories exempted from that condition. 41. The Court considers that the right to emergency assistance – in so far as provided for in the applicable legislation – is a pecuniary right for the purposes of Article 1 of Protocol No. 1. That provision is therefore applicable without it being necessary to rely solely on the link between entitlement to emergency assistance and the obligation to pay ‘taxes or other contributions’. Accordingly, as the applicant was denied emergency assistance on a ground of distinction covered by Article 14, namely his nationality, that provision is also applicable.”

“1. The enjoyment of any right set forth by law shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. 2. No one shall be discriminated against by any public authority on any grounds such as those mentioned in paragraph 1.”

“In the absence of some special circumstances it seems to me that the court should follow any clear and constant jurisprudence of the European Court of Human Rights.”

“The Court considers that the right to emergency assistance – in so far as provided for in the applicable legislation – is a pecuniary right for the purposes of Article 1 of Protocol No. 1. That provision is therefore applicable without it being necessary to rely solely on the link between entitlement to emergency assistance and the obligation to pay ‘taxes or other contributions’.”

“The second sentence of paragraph 41 of the Court’s judgment is framed in not untypical Delphic terms. It is unnecessary for me to decide what the Court intended to lay down, but I read it as holding that a state benefit may be a pecuniary right protected by Article 1 of the First Protocol even if it is not a contributory benefit entitlement to which is conditional on compulsory payment of a tax or other contribution. This is logical. There would be some logic in restricting Article 1 to pecuniary rights derived from a defined investment funded by individual contributions. In such a case the right is a true right of property. Where, however, the payment of contributions is no more than a condition for entitlement to a benefit (as I assume was the position in Gaygusuz), it is difficult to see why entitlement to a benefit resulting from satisfaction of that condition should create a pecuniary right protected by Article 1, when entitlement to benefit resulting from satisfaction of some other condition should not. In a case such as the present, the payment of benefit does not create a right of property in any real sense.”

“… the Commission recalls the case of Gaygusuz… In that case the Court noted that emergency assistance was linked to and dependent upon a payment of contributions and held that in these circumstances the right to emergency assistance was a ‘pecuniary right’ under Article [1P].”

“… in its judgment in Gaygusuz… (… ## 39 – 41), the Court held that entitlement to a social benefit is linked to the payment of contributions…”

“Successive Governments have taken the view that the level of increases in retirement pensions relates to conditions in the UK and that it would not be right to impose an additional burden on contributors and taxpayers in the UK in order to pay pension increases to people who have chosen to become resident elsewhere in the world.”

“I have already said I am not prepared to defend the logic of the present situation. It is illogical. There is no consistent pattern. It does not matter whether it is in the Commonwealth or outside it. We have arrangements with some Commonwealth countries and not with others. Indeed, there are differences among Caribbean countries. This is an historical issue and the situation has existed for years. It would cost some £300 million to change the policy for all concerned…”

“It is impossible to discern any pattern behind the selection of countries with whom bilateral agreements have been made providing for uprating.”

“17. The main purpose of reciprocal agreements so far has been to provide a measure of social protection for workers, and the immediate members of their families, when moving from one country to the other during their working lives. In effect, they generally prevent such workers from having to contribute to both countries’ Social Security schemes at the same time while ensuring that they retain benefit cover from either one country or the other. On reaching pensionable age, such workers who have been insured in two or more countries’ schemes can receive a pension from each which reflects the amount of their insurance in each. 18. Whether a reciprocal Social Security agreement with another country is entered into depends on various factors, among them the numbers of people moving from one to the other, the benefits available under the other country’s scheme, how far reciprocity is possible and the extent to which the advantages to be gained by an agreement outweigh the additional expenditure likely to be incurred by the UK in negotiating and implementing it. Where an agreement is in place, the flow of funds may differ depending on the level of each country’s benefits and the number of people going in each direction. 19. Since June 1996, the Government’s policy has been that future reciprocal agreements should normally be limited to resolving questions of liability for social security contributions…”

“Surely no one would have deliberately designed a policy of paying pensions to people living abroad intending to end up in the position we are at today… It is impossible to discern any pattern behind the selection of countries with whom bilateral agreements have been made providing for uprating.”

“It appears to me that it will usually be convenient for a court, when invited to consider an Article 14 issue, to approach its task in a structured way. For this purpose I adopt the structure suggested by Stephen Grosz, Jack Beatson QC and the late Peter Duffy QC in their book Human Rights: The 1998 Act and the European Convention (2000). If a court follows this model it should ask itself the four questions I set out below. If the answer to any of the four questions is “no”, then the claim is likely to fail, and it is in general unnecessary to proceed to the next question. These questions are: (i) Do the facts fall within the ambit of one or more of the substantive Convention provisions…? (ii) If so, was there different treatment as respects that right between the complainant on the one hand and the other persons put forward for comparison (“the chosen comparators”)? (iii) Were the chosen comparators in an analogous situation to the complainant’s situation? (iv) If so, did the difference in treatment have an objective and reasonable justification: in other words, did it pursue a legitimate aim and did the differential treatment bear a reasonable relationship of proportionality to the aims sought to be achieved?” (In fact, of course, the claim would only be “likely to fail” in a case where question (iv) were reached if the answer to that question were “Yes” rather than “No”.) For reasons I have given question (i) falls to be answered affirmatively. There is no contest as to (ii). The structured approach commended by Brooke LJ plainly separates out (iii) and (iv) as distinct successive steps. However Mr Drabble submits that the judge confused these two steps, and I shall address that complaint first. (i) Do the facts fall within the ambit of one or more of the substantive Convention provisions…? (ii) If so, was there different treatment as respects that right between the complainant on the one hand and the other persons put forward for comparison (“the chosen comparators”)? (iii) Were the chosen comparators in an analogous situation to the complainant’s situation? (iv) If so, did the difference in treatment have an objective and reasonable justification: in other words, did it pursue a legitimate aim and did the differential treatment bear a reasonable relationship of proportionality to the aims sought to be achieved?”

“61. So far as the first class of comparators is concerned, persons who live in other countries have different costs of living from those in Great Britain, and live in economies that are subject to different rates of inflation. If a comparison were appropriate, it would be justifiable to compare the cost of living in sterling terms of a foreign pensioner with that in the UK. A pensioner resident abroad may be better off, in real terms, than a pensioner living in Great Britain, because of different local costs of living which are not fully reflected in exchange rates. 62. While I have no evidence before me, it is notorious that the cost of living in this country is relatively high, and certainly higher than that in South Africa, partly as a result of the equally notorious depreciation of the rand as against, in particular, sterling. The depreciation of the rand has doubtless led to inflation in South Africa in terms of the local currency, and the Claimant’s evidence refers to the facts that inflation and interest rates are higher there than here. However, the purchasing power of her fixed UK pension is not fixed: it depends on the rate of inflation in South Africa and changes in the sterling/rand exchange rate. Importantly, the Claimant does not state that the purchasing power in South Africa of her fixed sterling pension has declined because it has not been uprated; and as mentioned above the uprating so far refused to the Claimant personally is a relatively small sum. Perhaps more fundamentally, she has not compared the cost of living in South Africa with that in the UK. Lastly, she obviously cannot provide a prediction as to whether her cost of living in South Africa will increase in sterling terms. 63. Similar comments apply to the comparison between the Claimant and those living in other countries. 64. There are other differences between the circumstances of those resident here and those resident abroad, of which the most obvious in the present context are differences in local social security provision and in local taxation. The Claimant is unfortunate in that South Africa has limited social security provision, or at least did so at the time of the Social Security Committee Report. The position of pensioners in Australia is different: some of them benefit from Australian social security provision, at significant cost to the Australian exchequer. Of the (about) 220,000 UK pensioners in Australia, 158,000 qualify for an Australian pension, which is payable to those who have been resident in Australia for at least 10 years and have reached retirement age, and have less than a specified income. The position of pensioners in New Zealand, as described in the 1996 DSS memorandum, is different again: under the reciprocal agreement between the UK and New Zealand, periods of residence in the UK are treated as periods of residence in New Zealand. As a result, UK pensioners living in New Zealand qualify for New Zealand pensions (called superannuation), less the amount of their UK pensions, by reason of their residence here or there. Increases in their UK pensions would result in an equivalent reduction in their New Zealand pensions. 65. It seems to me that the comparison between the positions of persons living in different countries, in different social and economic circumstances, and under different tax and social security regimes, is complex, and cannot simply be restricted to a comparison of the sterling amounts of their UK pensions.”

“The treatment complained of is not that of the defendants personally but that of lay impropriators generally, the defendants included. It is therefore necessary to compare the situation of lay impropriators with that of a larger class of which they form part - a class of persons ‘in an analogous or relevantly similar situation: Stubbings v United Kingdom (1996) 23 EHRR 213, 238, para 70. This class has to be identified by reference to shared material characteristics other than the impugned one. The material characteristic in the present case is in our view the ownership of land in England at large or in the parish of Aston Cantlow.”

“The Defendant does not accept that a person aged 25 or more would have been in a situation analogous to that of Ms Reynolds during that period. In other words his case is that the difference in age is reflective of other significant differences. He also seeks objectively to justify the demarcation at age 25. I use the word “also” because theoretically the enquiry into whether the situations are analogous precedes the enquiry into justification. But I find the distinction elusive. I consider that it suffices for me to focus on the second enquiry and to ask whether the Defendant establishes objective justification for the demarcation, as being in pursuit of a legitimate aim to which it is proportionate.”

“It is important to stress that this is only a framework… There is a potential overlap between the considerations that are relevant when determining, at any rate, the last two, and possibly the last three questions. There may sometimes, therefore, be a need for caution about treating the four questions as a series of hurdles, to be surmounted in turn. In Nasser v United Bank of Kuwait [2001] EWCA Civ 556 at [56], [2002] 1 AER 401 Mance LJ observed, in effect, that questions (iii) and (iv) above tend to merge into [one] another.”

“[t]he Court will not embark on questions whether it is or is not in the public interest for such agreements to be entered into”

“There is no reason why a decision that resources can be found to uprate the pensions payable to those in Great Britain to maintain their value given inflation in the general level of prices obtaining in Great Britain should require the pensions payable to those not ordinarily resident in and absent from the United Kingdom to be increased by the same amount.”

“Given a constant pool of available money the question is whether it should be distributed in a discriminatory or a non-discriminatory manner. I have found the existing manner to be, prima facie, discriminatory. The constant pool of money could undoubtedly be distributed differently although this would, as a matter of arithmetic, inevitably mean that those who presently qualify would have (notionally) to suffer a reduction in order to leave some over for those who do not presently qualify.”

“My Lords, although the word ‘deference’ is now very popular in describing the relationship between the judicial and the other branches of government, I do not think that its overtones of servility, or perhaps gracious concession, are appropriate to describe what is happening. In a society based upon the rule of law and the separation of powers, it is necessary to decide which branch of government has in any particular instance the decision-making power and what the legal limits of that power are. That is a question of law and must therefore be decided by the courts.”

“… the decision to enact laws expropriating property will commonly involve consideration of political, economic and social issues on which opinions within a democratic society may reasonably differ widely. The Court, finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one, will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment be manifestly without reasonable foundation.”

“In some circumstances it will be appropriate for the courts to recognise that there is an area of judgment within which the judiciary will defer, on democratic grounds, to the considered opinion of the elected body or person whose act or decision is said to be incompatible with the Convention … [T]he area in which these choices may arise is conveniently and appropriately described as the “discretionary area of judgment”

“… the Commission has held that the ‘freezing’ of a pension at a particular level when a person leaves the United Kingdom does not amount to a deprivation of possessions infringing Article 1 of the Protocol. (Dec. No. 9776/82, 10.83 to be published in D.R. 34). Moreover, the different treatment of persons entitled to pensions who remain in the country of payment compared with those who emigrate is justified on the grounds that the applicant will only lose the benefit of future increases in the pension, whose purpose broadly speaking is to compensate for rises in the cost of living in the United Kingdom and which the applicant will not have to endure (Dec. No. 9776/82, loc. cit.). The Commission also considers that the economic state of third countries is not a matter which domestic pension authorities should be obliged to consider.”

“2.72 There will be a standard personal allowance for all claimants, varied only by age and marital status. That will end the present householder/non-householder distinction and the structural distinction between ordinary and long-term rates. [These were features of the supplementary benefit scheme.] These will be replaced by age-related rates. 2.73 There is no one age dividing line relevant to all claimants. But it is clear that at the age of 18 the majority of claimants are not fully independent and that the great majority of claimants above age 25 are. This is already in practice reflected in the present scheme. In 1983 nearly 90 per cent of all claimants over 25 were getting the higher householder rate. By contrast the clear majority of claimants under 25 were living in someone else’s household. This is particularly marked for single claimants, the great majority of whom aged between 18 and 24 presently get a lower rate of help. The Government have concluded that an appropriate dividing line is age 25. There will therefore be different rates for adult claimants above and below age 25, although, as explained below, account will be taken of claimants’ family responsibilities.”

“If an age split is thought preferable for administrative reasons, then 25 is certainly too high.”

“3.13 All age-dividing lines are of course open to argument at the margin. Nonetheless, the fact is that the great majority of single claimants without children under 25 now live in other people’s households and they already receive a lower rate of help. Overall, four-fifths of single claimants without children in the 18 to 24 age group get the non-householder rate. It is also reasonable to recognise that earnings levels are generally lower for this group than for those in older age groups. The abolition of the householder distinction and the introduction of the 25 age point have enabled the Government to concentrate more resources on older people - including pensioners and disabled persons living in other people’s households.”

“(1) People in the 18 – 24 age-group in general earn less than those 25 or over, and may legitimately be regarded as having lower earnings expectations. (2) The majority of those 18 – 24 do not live independently and may legitimately be regarded as having lower living costs than the group of claimants aged 25 or over. (3) The payment of lower rates of JSA and IS to those between 18 – 24 may be expected to have the effect of discouraging them from living independently, and encouraging them to live together with others, notably parents or other family members, which may be seen to have wider social benefits. 8(4) Other aspects of the social security system serve to prevent any resultant hardship to the minority of persons in the position which was that of the Claimant who are aged between 18 – 24 and do not live independently. (5) It is important from the point of view of good administration for the social security system to be based upon clear, easily applicable rules, rather than attempting to cater for the individual situation of every claimant.”

“… I regard it as unnecessary, indeed inappropriate, for me to address the arguments presented by the Defendant by way of justification for the demarcation with the degree of detail into which, drawing upon a statement of an eminent statistician as well as a host of other material, Mr Gill would have me descend. Indeed, as his enthusiastic argument proceeded, I increasingly sensed the incongruity that such a debate was proceeding in court instead of in Parliament.”