Carson and the 12 other Applicants appealed the decision from the ECHR Fourth Section. The case was heard publicly in the European Court of Human Rights (ECHR), Grand Chamber in Strasbourg, France on 2 September 2009 and 27 January 2010, with judgment handed down on 16 March 2010. This was appealed before Jean-Paul Costa (President), Christos Rozakis, Nicolas Bratza, Peer Lorenzen, Françoise Tulkens, Josep Casadevall, Karel Jungwiert, Nina Vaji?, Dean Spielmann, Renate Jaeger, Danut? Jo?ien?, Ineta Ziemele, Isabelle Berro-Lefèvre, Päivi Hirvelä, Luis López Guerra, Mirjana Lazarova Trajkovska, Zdravka Kalaydjieva.
The applicants argued that their following human rights had been violated:
- 1. Article 1 of Protocol No. 1 – “Right to property” on its own and in conjunction with Article 14 of the Convention
- 2. Article 8 of the European Convention on Human Rights in conjunction with Article 14 (six applicants)
The applicants argued that they were being discriminated against because they were not receiving the annual increase to their UK state pension whilst others in a similar position to them were.
The Court maintained that, under UK domestic law an under Article 1 of Protocol No. 1, the applicants do not have a right to receive the annual uprating. This had been dismissed by the ECHR Fourth Section and cannot be appealed.
The Court did not accept the UK Government’s objections to Article 1 of Protocol No. 1 for the 12 applicants that had not filed domestic proceedings in the UK, and given that Carson had already brought test cases which had failed in the UK domestic courts, there was no point in the applicants litigating in the UK.
The applicants maintained that the treating of “residence” was an aspect of “personal status” and was consistent with case law. In addition, their position is that whilst moving abroad is a question of “free choice” it is not so if it is driven by the need or desire to be close to family members.
The Government had conceded in the UK domestic courts that Carson’s “foreign residence” was protected under Article 14, but argued that moving abroad was a matter of choice.
The third parties, Age Concern and Help the Aged, emphasized the importance of family support in old age.
The Government argued that National Insurance Contributions paid into the National Insurance Fund cannot be equated to contributions to an occupational or private pension schemes. With regard to the UK state pension, there are no guaranteed entitlements.
The Court agreed unanimously that the complaint under Article 14 of the Convention taken in conjunction with Article 8 inadmissible; The rejected unanimously the UK Government’s preliminary objection concerning the admissibility of the complaints of the applicants, other than Carson herself; they agreed by eleven votes to six that there had been no violation of Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1.
The six dissenting judges agreed that Article 14, taken in conjunction with Article 1 of Protocol No 1 had been violated, and that Article 14 on its own had also been violated. All of the Applicants were in the same boat even though their countries of residence may be different. The majority approach regarding “residence” seemed self contradictory, and inconsistent with the spirit of Article 14, and the conclusion of the majority regarding the characteristics of UK pensioners living in the UK and those living in “frozen” countries was wrong because, other than “country of residence”, there is no difference between UK pensioners living abroad – they all paid into the same system and therefore all of them are entitled to a UK State Pension which is based on the number of contributing years. Whilst the majority of the judges decided that even though all UK pensioners living abroad had made equal contributions to the National Insurance system that does not mean that they can be treated the same. The majority argued that the State pension has multiple sources, but those dissenting could not see the relevance of that and because all UK pensioners living abroad paid into the system they should all be treated the same. The right to a UK state pension and the right to be treated the same is based on the rules by which a pensioner receives a UK state pension.but those dissenting could not see the relevance of that and because all UK pensioners living abroad paid into the system they should all be treated the same. The right to a UK state pension and the right to be treated the same is based on the rules by which a pensioner receives a UK state pension but those dissenting could not see the relevance of that and because all UK pensioners living abroad paid into the system they should all be treated the same. The right to a UK state pension and the right to be treated the same is based on the rules by which a pensioner receives a UK state pension.
All pensioners living abroad (whether or not they received the annual increase) had a common characteristic – their buying power was decreased every year based on the drop in currency exchange rates. Those pensioners who lived in the UK received inflationary increases every year. Those pensioners living abroad who received the increase received the same increase as those in the UK regardless of the increase of the inflationary rate in their own country. For those countries that had higher inflationary rates then UK pensioners living in those countries would find their UK state pension depreciating compared to those pensioners living in the UK. Those pensioners living in countries like South Africa who did not receive annual increases found that their UK state pension was depreciating at an even faster rate. In Carson’s case this was significant. In the period 2000-2005 she found that her weekly UK state pension had fallen by 28%. Comparing this to a pensioner living in the UK the comparative loss increased further with time.
The dissenting judges could see no relevant differences between the those UK pensioners that lived abroad and received the annual increase and those that lived abroad and didn’t receive the increase, and could see no justification for such a radical difference in the UK state pension received. In addition, they were not persuaded by the UK government to decide otherwise and that their argument went against the spirit of Article 14 of the Convention.
Whilst the UK state pension system is designed to ensure that the financial needs of pensioners living in the UK are taken into account the dissenting judges could see no justification for treating them unfavorably and unequally. There will always be differences in the increases in inflation for each country and the impact that this has on the buying power of the UK state pension. The fall in the sterling exchange rate has been consistent for over a century, and the impact that this has on UK pensioners living overseas in “frozen” countries can cause irreparable deterioration in the real value of their UK state pension. The complete denial of any increases represents a disproportionate difference which cannot be justified.
UK pensioners living overseas do not receive health benefits, such as the National Health Service and nor do they pay UK taxes – this is no reason as to why they should not receive the annual increase since, UK taxes forgone are less than the housing, healthcare and social welfare benefits which are payable to pensioners living in the UK but not those who live abroad.
The UK Government prevailed; Carson and the other Applicants lost their appeal and they had run out of Courts to appeal to.