Carson Case
BAPA Comments on Hooper precedent
referenced by Justice Burnton

October 2002

In the course of his judgement on the Carson case, Burnton J acknowledged his debt to Moses J in the following words in Carson paragraph 71:

European jurisprudence does not differ from English authority on the deference to be given to the democratically-elected organs of government in the field of social policy and public expenditure: Mellacher v Austria [1989] 12 EHRR 391, at paragraphs 45 and 54, helpfully cited by Moses J in Hooper at paragraph 102.

In view of the fact that the learned judge placed much reliance on the deference that should be paid to democratically-elected organs of government, it is worth while to examine the Hooper judgement more closely.

Before doing so, it should be noted that the claimants in the Hooper case were unsuccessful. Their claims were not for remedy of the basic inequity, but for retrospective application of the new rules, the government having already passed legislation that remedied the injustice of which they complained.

In the following comments, paragraph references are, unless otherwise specified, to the paragraphs of the Hooper judgement of Moses J.

Discrimination

In paragraph 17, we read:

The test as to whether the claims fall within the ambit of a substantive provision has a significant corollary. Article 14 provides protection against discrimination, not only in respect of those rights which a state is obliged by the Convention to guarantee, but also in respect of benefits which it chooses to provide which fall within the scope of a substantive article.

In the same paragraph, Moses J went on to quote from the finding of the court in the Abdulaziz case:

The notion of discrimination within the meaning of Article 14 includes, in general, cases where a personal group is treated, without proper justification, less favourably than another, even though the more favourable treatment is not called for by the Convention.

In paragraph 25 Moses J observed:

I conclude that there is no warrant for requiring the claimants to establish a direct and immediate link with the enjoyment of rights under Article 8 in cases where the state has chosen to confer some benefits upon one group and not upon another.

Hooper was concerned with the issue of widowers’ pensions, but the principles enunciated are equally applicable to the case of the "frozen" pensioners. Although the frozen pensioners are seen by some commentators to be treated less favourably than those resident in the UK and non-frozen countries, the obverse is also true; the state has chosen to treat pensioners in the UK and the non-frozen countries more favourably than those resident in frozen countries. Benefits have been ‘conferred’ on some pensioners but not on others.

Conclusion.

The state might not be obliged to uprate pensions every year. But if it does choose to uprate pensions, then it must not, without proper justification, do so in a discriminatory manner.

Article 8 – Family Life

Respect for family life featured large in the Hooper case. From time to time government spokesmen allege that frozen pensioners have "chosen" to move away from the UK. While the same remark could be made about people who have chosen to emigrate to the United States of America or to Israel, or any other non-frozen country, it has particular poignancy when applied to pensioners who have emigrated to Australia or Canada or any other Commonwealth country where their pensions are frozen.

Many of these people have emigrated for family reasons. In one case it might be because their only daughter has married an Australian, and they wish to spend their later years in the company of their grandchildren. In another case it might be because of a terminally sick brother, whose family needed the support that is best given by close kin.

Many others emigrated because they were sent by their employers to establish or manage a branch in an overseas country. But in very many cases they emigrated in mid-life because both the British government and the government of the host country encouraged emigration. Such emigrants will, of course, have a less than complete contribution history, and thus a pension which is rightly less than 100% of the basic state pension.

To characterise these people as having "chosen" is false, and arrogant, and displays a disrespect for family life.

Let us see what Moses J had to say about this subject in the context of payments to bereaved men and women.

In paragraph 31

In my view, the availability of pecuniary support afforded by Widow's Payment and Widow's Pension does have a significant effect on the relationship of a family prior to the death of the spouse. They form a significant part of a family's plans for a secure future.

In paragraph 32

Financial planning seems to me to be a significant aspect of family life ...

This principle would be equally applicable to a pensioner proposing to emigrate , and learning at the last minute that his pension would be frozen. It is not valid for the government to claim that intending migrants "know" that they will be frozen. Certainly a majority of older pensioners credibly contend they did not know, and there are documented instances of the DSS failing to make it known in correspondence even when they knew the contributor was contemplating emigration.

Cases have been reported where the emigrant only found out when he was "on the gangplank", having already sold his house and packed his effects. One person reports that he asked for a pension forecast before he emigrated. On the application form the question was asked "Do you intend to live overseas?’ He answered "Yes, Canada". He was not told about the freezing regime until some time after he arrived in Canada. When he asked why this was so, he was told that it was not department policy to tell people unless they were already living abroad.

Consider the case of a pensioner who finds out about freezing before committing herself to emigrating. She is in a quandary, because she can choose to remain in Britain and enjoy not only a pension protected against inflation, but also all the other benefits that are provided at the expense of the taxpayer or of the National Insurance Fund. Her other choice is to live out her days with her children and grandchildren, and find that as the social value of her pension decreases over the years, she will become a burden on them.

Whatever plans she may have made for her later years, they will be undermined and she will have been occasioned unwarranted anxiety because of the irresistible urge of an ageing person to spend her declining years with her son or daughter, not because she has chosen to emigrate, but because they chose to do so.

In what sense is the pension a possession?

Again we are indebted to Moses J for his quotation from Marckx.

[Article 1] applies only to a person’s existing possessions and does not guarantee the right to acquire possessions. (see Marckx para 50, page 350)

If we look at individual weekly pension payments, we might be tempted to categorise each weekly payment as a separate possession. Certainly it does not come into possession as a vested payment until pension day, but that is a different meaning of possession, which in this context needs to have the meaning of "property". A better view is that the pensioner’s possession, or property, consists of an income stream, the components of which vest every pension day. In the case of the annual uprating, a new component is added to the income stream every year in which the appropriate order is made.

This should not be seen as acquisition of a new possession. Each addition is a tributary to the main stream, but it is nevertheless properly a part of that stream. The pensioner owns all of the income stream, with its attendant tributaries. This is amply demonstrated by the fact that on a visit to the United Kingdom a pensioner is entitled to full possession of the current stream.

Some light is shed by the remarks made in paragraph 38:

According to the defendant [government], the issue turns on whether the claimants’ deceased spouses paid contributions to the underlying National Insurance scheme. Absent such contributions the complaints do not concern possessions within the meaning of Article 1 of the First Protocol.

Pensioners in frozen countries have never claimed a right to pensions for which they did not contribute. Those who contributed throughout all of their working life are entitled to a full pension, while those who emigrated mid life are entitled to a proportionate part pension. In each case any contributions for graduated retirement benefit or State earnings Related Pension Scheme are similarly based firmly on the contribution record.

Conclusion

Despite Government persistence in describing the basic pension as a ‘pay-as-you-go’ scheme, it is so constructed that contributions which are themselves adjusted periodically for inflation give entitlement to a retirement pension which is also adjusted for inflation. There is no justifiable reason for discriminating against the 4% who are victims of discrimination.

Justification

In the Hooper case, the defendant offered a reasonable explanation as to how the discrimination between widows and widowers had come about. This distinction had been removed by legislation, but without any retrospective rights being created. It was upon this latter point that the claimants based their claims.

Although the government was able to make its case based on statistical evidence of the changes in society and in the institution of marriage, the judge still made adverse comments on the discriminatory treatment based on group characteristics, witness paragraph 92

That objective justification should be targeted to individual and not generalised circumstances is echoed in those authorities which rejected "statistically supportable" discrimination.

This is of particular interest, because Burnton J sought to justify discrimination on the basis that groups of pensioners living in different countries would have higher or lower standards of living. In the light of the above, his finding is unsupportable.

In paragraph 92, in relation to a Canadian case (Zurich), Moses J quoted:

The underlying philosophy of human rights legislation is that an individual has a right to be dealt with on his or her own merits and not on the basis of group characteristics. (322 H-I).

And in paragraph 93 an even more persuasive statement from the same case:

Human rights values cannot be overridden by business expediency alone.

The arguments as to cost put forward by the British government are no more supportable than would be arguments based on business expediency.

The quote continues:

To allow "statistically supportable" discrimination would undermine the intent of human rights legislation which attempts to protect individuals from collective fault. It would also perpetuate traditional stereotypes with all of the invidious prejudices. Whether there was an alternative, which in all the circumstances was practicable must be considered. (323 i-j)

It is in this light that the "prejudice" of government spokesmen against those who have "chosen" to emigrate must be judged.

The Margin of Discretion.

In approaching this question, Moses J commenced in paragraph 97 by observing:

The resolution of the issue whether the undoubted discrimination was objectively justified requires consideration of the extent to which the court should defer, on democratic grounds, to the considered opinion of Parliament.

We now come to the paragraph 102, in which Burnton J found support for his views.

The ECtHR has itself acknowledged the need to afford a wide margin of appreciation to the High Contracting Parties in cases concerning social policy. Affording a wide margin of appreciation has the consequence that the court will not itself decide whether the measures adopted represented the best solution for dealing with the problem, nor whether the legislature could have adopted an alternative solution. In the context of housing policy, the Court said in Mellacher v Austria [1989] 12 EHRR 391:-

This is the paragraph which Burnton J cited to justify his refusal to find in favour of the claimant. But the case is not one of social policy. There is no considered policy in freezing, only a series of historical accidents. The Mellacher case on which the learned judge relied had to do with the control of the use of property, not deprivation of property. And in the subsequent paragraphs emphasis is placed on housing matters. Even the dictum of Lord Woolff relates to the Poplar Housing and Regeneration Community Association Ltd - nothing to do with pensions.

The Hooper case, along with the Reynolds * case, may be the first in which the principles enunciated in relation to real property have been applied to income streams, such as pensions and other social security benefits.

* The Queen on the application of Reynolds v Secretary of State for Work and Pensions [2002] EWHC 426 (Admin)

It should be noted that in the Reynolds case the government advanced justification for discriminating between beneficiaries on the ground of age. In the Carson case, no justification was offered other than cost.

In the case of Euan Sutherland *, the Government place[d] considerable reliance on the fact that the issue was recently and fully debated by a democratically elected Parliament. The European Commission dismissed this argument, ruling that "this factor cannot of itself be decisive. Of more importance is the sufficiency of the reasons advanced to justify maintaining a different [discriminatory] age of consent".

* Application No. 25186/94 Euan Sutherland against the United Kingdom

REPORT OF THE COMMISSION (adopted on 1 July 1997)

The remarks and quotations in paragraph 105 are also relevant

Nevertheless, despite the broad degree of deference afforded to Governments in the field of social and economic policy, the significance of the general recognition by members of the Council of Europe and the European Union cannot be overlooked.

and

one of the factors relevant to the scope of the margin of appreciation is the existence of common ground between the laws of the Contracting States

It is relevant to observe that the United Kingdom is the only state in the EU, indeed in the developed world, to accord discriminatory treatment to pensioners resident in some – and only some – overseas countries. If account is taken of the practice of other Contracting States, then the margin of discretion is stretched too far when a burden is placed on a small percentage of pensioners, allegedly to serve the public interest.

In a similar case involving pensioner discrimination brought before the German Constitutional Court 1 BvR 111/74 and 283/78 20 March 1979, the court determined:

• According to Article 3, Para 1 of the Basic Law, the Government must not arbitrarily treat unequally what is basically equal.

• The unequal treatment of insured people who, through equal contributions have achieved an equal legal foundation and an equal insurance entitlement, cannot be reconciled with the Basic Law.

• The question whether, when and for what reason a reciprocal social security agreement can be sought or concluded, lies completely outside the sphere of the insured person.

• What makes the regulation unconstitutional is its blatant unreasonableness.

The UK Department of Social Security Research Report #23, published in 1993, entitled Crossing National Frontiers by Helen Bolderson and Francesca Gains of Brunel University, summarised the above case as follows:

'The court ruled that contributory pension rights should be seen as the "property" of the contributor and therefore the state must justify occasions when pension rights are withdrawn if a person leaves the country. The case law became incorporated into subsequent revisions of the RVO, and altered the policy towards payment of benefit abroad.'

Burnton J should have followed the example given by Moses J in paragraph 105

If the reasons advanced by the Defendant are insubstantial or, even if they are substantial, they do not persuade me, I shall decline to find any objective justification.

It has been admitted by a government spokesman (the former Minister of Pensions, now Lord Rooker) that the present system is illogical, a mere accident of history. Furthermore, it is perpetuated only to save an outlay of 1% of the social security budget.

In paragraph 112, Moses J quotes an observation made by Lord Nicholls

The Government is under a duty to take reasonable steps to monitor the working of the measure. The Government must view the position periodically. The greater the disparity of impact, the greater the diligence which can reasonably be expected of the Government….

The disparity of impact falls most heavily as pensioners age. This is illustrated graphically by the case of a man of 94 who receives a basic pension of £6.75 a week, even though he has the same number of contribution years as the 96% of pensioners who draw more than ten times that amount. By freezing pensions at the date when they are first paid in the frozen country, and never reviewing the situation, the government has failed in its duty of diligence.

In paragraph 129

.... The Government cannot justify discrimination by continuing to apply discriminatory legislation for as long as possible. Absent any objective justification, it is the court's duty to rule that the legislation is discriminatory and afford such remedies as are open to it under the provisions of the 1998 Act.

This demolishes the repeated ‘justification’ offered by the government that "it has always been like this". As has been seen, there was no objective justification.

In paragraph 143 we learn that:

The defendant [government] further contended that in order to establish a claim under Article 14 an individual must show that he has been discriminated against on the basis of:

A personal characteristic (status) by which persons or groups of persons are distinguishable from each other

It is clear that the discrimination against frozen pensioners is based on a personal characteristic …. etc. If the distinction was being made between pensioners who reside in the UK and those who do not, or even between those who reside in an EU country and those who do not, then the discrimination could be supported by some logic. But discriminating between those who live in the Philippines and those who live in Canada is unjustifiable, and should therefore be ruled incompatible with the HRA.

Kevin David Willis

We should not leave this subject without considering the case of Willis. It concerned a widower who claimed that he should be given the same benefits on the death of his wife as she would have received if he had died.

Willis had the advantage over Hooper and his fellow claimants, in that Willis had managed to bring his case before the European Court of Human Rights before the passage of the Human Rights Act.

In a statement which echoes one of the claims often made by the government in defence of its discriminatory policy, we read

To make existing widows' benefits provisions available to widowers would add an estimated GBP 490 million to the annual Social Security budget. The Government is of the opinion that at a time when all areas of public expenditure are having to be carefully considered, this is simply not a best use of scarce resources.

The figure quoted here is of the same order as the figure quoted by the government in relation to frozen pensions.

What the government did in remedying the inequity was to reduce the benefits payable to new widows so that new widowers could receive the same benefit as new widows.

If the same approach was used to remedy the inequality of frozen pensioners, and if saving less than 1% of the social security budget were crucial to the country’s economic stability, then the 11m pensioners whose pensions are uprated would have to forego less than 60 pence per week of a future increase to accommodate the cost of uprating the remaining pensioners. It is ludicrously inequitable that frozen pensioners should be made to bear the burden of providing such a paltry reward to pensioners in the UK and non-frozen countries. In fact with the National Insurance Fund in surplus by over 20 billions, there would be no question of the 11 million having to forego any part of an annual increase.

SUMMARY

The Hooper case provides a rich lode of precedents, overwhelmingly supporting the frozen pensioner case.