European Court of Human Rights (ECHR), Fourth Section

Carson was joined by 12 other Applicants from Australia and Canada who were in the same position as she was, and they had formed a class action to appeal the UK House of Lords judgment. The case was considered in the European Court of Human Rights (ECHR), Fourth Section (Lower Chamber) in Strasbourg, France on appeal from the Appellate Committee of the House of Lords in a hearing before Lech Garlicki (President); Nicolas Bratza; Giovanni Bonello; Ljiljana Mijovi; David Thór Björgvinsson; Ledi Bianku; and Mihai Poalelungi on 4 November 2008.

Those representatives from Canada included:

• Bernard Jackson – Bernard had spent 50 years working in the United Kingdom paying National Insurance Contributions in full. He emigrated to Canada on his retirement in 1986 and became eligible for a UK state pension in 1987;
• Venice Stewart – Venice had spent 15 years working in the United Kingdom paying National Insurance Contributions in full, before emigrating to Canada in 1964. She became eligible for a UK state pension in 1991.
• Ethel Kendall – Ethel had spent 45 years working in the United Kingdom paying National Insurance Contributions in full before retiring in 1976. She became eligible for a UK state pension in 1973, and she emigrated to Canada in 1986.
• Ken Dean – Ken had spent 51 years working in the United Kingdom paying National Insurance Contributions in full, before retiring in 1991. He became eligible for a UK state pension in 1988, and emigrated to Canada in 1994.
• Robert Buchanan – Robert had spent 47 years working in the United Kingdom paying National Insurance Contributions in full, before emigrating to Canada in 1985. He became eligible for a UK state pension in 1989.
• Terence Doyle – Terrence had spent 42 years working in the United Kingdom paying National Insurance Contributions in full, before retiring in 1995 and emigrating to Canada in 1998. He became eligible for a UK state pension in 2002.
• John Gould – John had spent 44 years working in the United Kingdom paying National Insurance Contributions in full, before retiring and emigrating to Canada in 1994. He became eligible for a UK state pension in 1998.
• Geoff Dancer – Geoff had spent 44 years working in the United Kingdom paying National Insurance Contributions in full, before emigrating to Canada in 1981. He became eligible for a UK state pension in 1986.

The applicants argued that the entitlement to a basic state pension was a “possession” within Article 1 of Protocol 1, and the Government were depriving them of part of that “possession” i.e. the annual uprating. They were being denied this uprating because they resided in mainly Commonwealth countries that the UK Government claimed did not have reciprocal agreements with the UK and these were termed “frozen countries”. All of these applicants had been adversely affected financially as they were not receiving the annual uprating to their UK state pension that was intended to help counteract inflation. As a result, their UK state pension was being eroded and it had less buying power year on year.

In addition, the applicants claimed that Article 14 also applied in conjunction with Article 1 of Protocol 1. They believed that previous interpretations of case law had been too narrow and superseded by more recent case law. Whilst the UK Government had maintained that moving abroad was a freedom of choice, for many, this was the only way they could be near their family. They felt that they were being unfairly discriminated against. This discrimination, based on grounds of where a person chooses to reside is central to the enjoyment of certain human rights such as the right to family life, freedom of movement, and human dignity. This is likely to have a greater impact on women since, statistically, they will live longer. Given this, the court is right to scrutinise the UK Government.

Age Concern were a “third party” in this case and they had carried out a number of focus groups that identified that receiving the annual increase to the UK state pension was important to retirees. In carrying out surveys of older Chinese immigrants one of the main reasons why they had not returned to their home of birth was because they would no longer receive the annual increase to their UK state pension. In addition, in terms of the “most desirable” countries for emigration, five out of the top 10 are “frozen” countries (Australia, Canada, China, New Zealand and South Africa), and therefore, it is highly likely that a large proportion of the older population had families residing in countries where the UK state pension was not uprated.

Pensioners become more frail as they get older – it is important that they have a support and welfare infrastructure around them, and in many cases this will be family.

Where families live abroad, then at some stage their parents are more likely join them and the Institute for Public Policy Research has produced a report that showed that 20% of older people had emigrated to be with family or for personal reasons i.e. not work related.

The UK Government argued that because the applicants were from outside the UK, it was fair and reasonable to treat them differently. Social Security benefits, of which the State Pension was one, were meant for residents of the UK such that they could enjoy certain minimum standards. Systems that existed in other countries were also tailored to individuals living in those countries.

In Carson’s House of Lord’s Appeal, Lord Hoffmann stated that those in need were:

generally recognised to be national in character … it does not extend to inhabitants of foreign countries”.

and that this was enshrined in UK domestic legislation. The Government agreed with Lord Hoffmann that it could not be the law that the United Kingdom was prohibited from treating expatriate pensioners generously unless it treated them in exactly the same way as pensioners at home.

The applicants contended that discrimination only occurs if similar situations are treated differently and that there is no difference between the three cohorts of pensioners (those residing in the UK, those living abroad in “frozen countries” and those living abroad where the uprating is paid)- they all share one common characteristic, and that is they spent the same time in the UK and paid the same social security contributions into the National Insurance Fund. In addition, the applicants contended, the need for a reasonable standard of living is the same for all three groups of pensioners. All of the UK domestic courts (other than Lord Carswell in the House of Lords appeal) agreed that the three groups of pensioners do not have to be treated the same when it came to uprating the UK state pension.

The UK state pension is designed to provide a

minimum standard of living for those living in the UK”,

and the Court found that the three groups of pensioners were not in relevantly analogous positions and therefore the UK Government had the right to treat them differently. As far back as 1983, there was case law regarding a British Pensioner who had emigrated to Australia who was denied an uprated pension. In addition, in Carson’s House of Lords appeal, the Government could have made the decision to not pay any UK state pension to “frozen” pensioners at all.

When looking at all UK pensioners living overseas, the Court could not find similarity between those pensioners who were resident in “frozen” countries and those resident in “unfrozen” countries. Social security contributions are used for other purposes besides paying the state pension – the National Health Service, for example. Even in those cases where there is proximity between “frozen” and “unfrozen” countries – Canada and the United State, for example, there is still differences in their social security provision, taxation, rates of inflation, interest and currency exchange rates to make it difficult to compare them.

The Court considers that these differences are “objective and reasonable” such that the UK Government can treat them differently, even though Age Concern in England made some powerful arguments as to why pensioners emigrate in the first place – ultimately, it is down to a matter of “personal choice”.

In addition, the UK Government claimed that it had made people aware that if they moved abroad, they may be moving to a “frozen” country where their UK state pension would not be uprated.

The Court decided that the Government can decide which countries it wants to have reciprocal social security agreements with and which ones it doesn’t, based on its own economic policies, therefore, in the Court’s opinion, the Government has not violated Article 14 taken in conjunction with Article 1 of Protocol No. 1.

The court therefore decided by six votes to 1 that there had been no violation of Article 14 of the Convention taken in conjunction with Article 1 of Protocol No 1.

The dissenting opinion came from the President of the Court, Lech Garlicki. He thought that the difference in treatment of different cohorts of pensioners had no objective and reasonable justification. He felt that the difference in treatment of different cohorts of pensioners has no objective and reasonable justification. There were four arguments that may have led to a different conclusion:

1. The UK State Pension is a compulsory system, and based on National Insurance contributions; Carson and the other Applicants had all paid into the same system as those pensioners living in the UK. The UK Government was happy to take these contributions, which were in turn, used to pay the UK State Pension to current pensioners at the time, and also the annual uprating to those pensioners. There was no difference between the contributions made by her and those of her peers in the UK. Now it was time for Carson to receive her UK state pension, but, because she had changed her “country of residence”, she and the other Applicants were treated differently. The UK does not incur additional costs because Carson and the other Applicants live abroad.

Considerations of social justice and equity require that persons who have duly contributed towards the pensions of others should not be treated differently in the subsequent calculations of their own pension”.

2. All countries have inflation. Much has been made regarding the difference in costs of living, exchange rates, and inflation in different countries, and it is difficult to accept that there is a difference between the different cohorts of pensioners – those living in the UK compared to those that don’t. The current regulations appear to penalise pensioners living in “frozen” countries, even though they have made contributions to the UK social security system all of their lives. This seems to be against the principle of individual freedom and therefore seems to be unjustified.

3. The system in the UK is illogical based on the statement made in November 2000 by the Minister of State, Mr. Jeff Rooker to the House of Commons

4. Whilst the UK courts maintained that the Carson case is more legislative than judicial this view does not prevail in the ECHR.

A violation that results from legislative omissions is still within the reach of European supervision”.