QUEENS BENCH DIVISION
London, WC2A 2LL
B e f o r e :
| THE QUEEN on the application of ANNETTE CARSON||Claimant|
|- and -|
|THE SECRETARY OF STATE FOR WORK AND PENSIONS||Defendant|
|- and -|
|THE COMMONWEALTH OF AUSTRALIA||Intervening|
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
(instructed by Thomas Eggar Church Adams) for the Claimant
James Eadie and Khawar Qureshi (instructed by the Treasury Solicitor) for the Defendant
Tom de la Mare for the Intervening Party
AS APPROVED BY THE COURT
Crown Copyright ©
Mr Justice Stanley Burnton:
Protection of Property
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.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
(a) Her state pension, or alternatively its uprating, are pecuniary rights, and therefore “possessions” within the meaning of Article 1 of the First Protocol.
(b) The failure of the UK Government to pay her the amount of the annual uprating wrongfully deprives her partly or wholly of one or other of those possessions, i.e., part of her pension and the entirety of the uprating.
(a) Article 1 does not confer a right to a pension in any particular amount, and is therefore not infringed by the failure to pay uprating to the Claimant.
(b) The right protected by Article 1 of the First Protocol is defined by domestic law. Since UK law does not confer (and has never conferred) a right to an uprated pension on pensioners living in South Africa, the Claimant has not been deprived of any right, and therefore of any possession, within the meaning of Article 1.
(c) The decision of the Government not to pay uprating to the Claimant and to those in her position is objectively and reasonably justified and is therefore a permissible deprivation of such possession as she may have.
Prohibition of discrimination
The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any grounds 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.
“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 the ambit of one or more of them.”
(a) If the Claimant has no possession within the meaning of Article 1 of the First Protocol (as he submitted), she has no claim within the ambit of Article 14 read with Article 1 of the First Protocol.
(b) The basis of the differential treatment of the Claimant and others to whom comparison was made was not “any ground such as sex, race …. or other status” to which Article 14 applies.
(c) In any event, the decision of the Government not to pay uprating to the Claimant and to those in her position is objectively and reasonably justified.
(a) Is the state pension or the uprating a possession of the Claimant within the meaning of Article 1 of the First Protocol?
(b) If so, is the failure or refusal of the Government to pay an uprated pension to the Claimant a deprivation of that possession for the purposes of Article 1 of the First Protocol?
(c) If so, is that deprivation justified?
(d) If uprating is not a possession for the purposes of Article 1 of the First Protocol, is the payment of uprating to some, but not all, pensioners nonetheless within the scope of Article 14? I.e., does the Claimant’s complaint relate to “the enjoyment of the rights and freedoms set forth in (the) Convention?”
(e) If so, what is the criterion applied to determine the differential treatment of pensioners?
(f) Is that criterion a ground “such as sex, race, … or other status” that is, unless objectively justified, prohibited by Article 14?
(g) If so, is the differential treatment of the Claimant as compared with:
(i) pensioners living in this country, or
(ii) pensioners living in states such as the USA, whose residents are paid uprated pensions,
wrongful discrimination in breach of Article 14?
“The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section I of this Convention.”
The Claimant and those like her are of course not within the territorial jurisdiction of the United Kingdom.
The jurisdictional issue
Les Hautes Parties contractantes reconnaissent à toute personne relevant de leur juridiction les droits et libertés définis au titre I de la présente Convention.
The French text suggests that the High Contracting Parties undertook to accord Convention rights to all persons relevant to their jurisdiction. On this basis, a person whose rights or property are within the jurisdiction of a state is entitled to such of the Convention rights as apply to those rights or property. On this basis, Article 1 refers not to the presence of persons within the territorial jurisdiction, but to jurisdiction in a legal sense.
“The term ‘jurisdiction’ is not limited to the national territory of the High Contracting Parties; their responsibility can be involved because of acts of their authorities producing effects outside their own territory.”
In Bankovic and ors v Belgium and others (App. no. 52207/99), the Court rejected as inadmissible the complaint of the applicants that the NATO bombing in Belgrade was in breach of, principally, Article 2 of the Convention. The state respondents relied on Article 1 of the Convention. They submitted that jurisdiction in that provision referred to “the assertion or exercise of legal authority, actual or purported, over persons”: paragraph 36 of the judgment. The Court accepted this interpretation: it referred, in paragraph 80 of the judgment, to the Convention operating in the legal space (espace juridique) of the Contracting States.
The United Kingdom statutory provisions on pensions
(a) Contrary to popular perception, a person’s contributions do not in whole or in part constitute a fund from which her pension is later paid: there is nothing in the legislation to warrant such a conclusion.
(b) The basic state pension is contributory only in the sense that the payment of sufficient contributions is a condition of entitlement. In addition, if more than a quarter but less than the full number of qualifying years has been achieved, a reduced rate pension is payable.
(c) Provided Parliament approves the statutory instrument that the Secretary of State is required to put before it by virtue of section 150(9) of the SSAA, the basic state pension is uprated annually in line with UK inflation.
(d) However, a person who is both absent from, and ordinarily resident outside, Great Britain is disqualified from receiving any additional benefit payable as a result of uprating after the date she reaches retirement age or her emigration, whichever is later.
(e) It follows from (d) that a person who is ordinarily resident abroad who returns to this country temporarily receives her uprated pension while here; when she returns to her country of residence however her pension reverts to its previous sum.
(f) However, uprated pensions are paid to those living in the countries referred to in paragraph 4 above, with whom the UK has entered into reciprocal agreements and in respect of whom appropriate Orders in Council have been made. Where it is paid, no regard is had to inflation in the country of residence.
Finance and History
“13. The reality is that National Insurance operates as a form of taxation, with the benefits being paid out on a pay as you go basis from a notional fund topped up as required by grants from the Exchequer. The record of contributions still serves as a control for determining the amount of pension payable, but even this principle has been blurred by the introduction of home responsibilities protection and credits, while the availability of means tested Income Support and Housing Benefit has to some extent replaced the old age pension itself as the principal defence against poverty in old age.”
“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 to 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.”
“It is impossible to discern any pattern behind the selection of countries with whom bilateral agreements have been made providing for uprating.”
“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…”
“11. Agreeing to additional expenditure on pensions paid overseas would be incompatible with government’s policy of containing the long term costs of the social security system to ensure that it remains affordable.
12. In June and July 1995, during the passage of the Pensions Bill, amendments were tabled in both Houses calling for upratings to be paid. All were defeated by large majorities.”
“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.”
“Although the Human Rights Act 1998 does not provide that a national court is bound by these decisions it is obliged to take account of them so far as they are relevant. 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. If it does not do so there is at least a possibility that the case will go to that court, which is likely in the ordinary case to follow its own constant jurisprudence.”
Decisions of the Commission are not of the same level as those of the Court. Where, however, there is a clear and constant line of decisions of the Commission that are not inconsistent with those of the Court, good reason is required if this Court is to decline to follow them.
“The Commission recalls its constant case-law, according to which the right to a pension is not as such guaranteed by the Convention. At the same time the Commission has frequently held that the payment of contributions to a pension fund may in certain circumstances create a property right in a portion of such a fund and a modification of the pension rights under such a system could therefore in principle raise an issue under Article 1 of Protocol No. 1. The Commission has added, however, that “even if it is assumed that Article 1 of Protocol No. 1 guarantees persons who have paid contributions to a special insurance system the right to derive benefit from the system, it cannot be interpreted as entitling that person to a pension of a particular amount” (see Müller v Austria, Comm. Report 1.10.75, para. 30, D.R 3 p.25).”
“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 (cf. App. No. 6572/74 X. v. Federal Republic of Germany, D.R. 8, p. 70). 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.
4. The Commission has nevertheless further considered the applicants’ complaints in the light of Article 14 of the Convention which provides that enjoyment of Convention rights shall be secured without discrimination. In this respect it notes that one element of the applicants’ complaint appears to be that they will receive less favourable treatment under the United Kingdom pension scheme than would other persons who have paid the same contributions but who have remained in the United Kingdom or emigrated to other countries. The Commission has therefore considered whether such differential treatment could amount to discrimination in the enjoyment of their rights under Article 1 of the Protocol contrary to Article 14.
The Commission notes that it is a common feature of international life that social security agreements are entered into between different countries for the purpose of regulating the rights of persons moving from one country to another under the social security systems of each country. Such agreements commonly provide for the substitution, to a greater or lesser degree, of benefits under one system for those due under another. Under the Agreement between the United Kingdom and Australia the applicants’ rights under the United Kingdom social security scheme are to some extent restricted and replaced by certain rights under the Australian scheme. The applicants, in their particular circumstances, will apparently be less well off than they would have been if they had remained in the United Kingdom or if they had gone to certain other countries. However it is almost inevitable that where a person in effect changes over from one social security system to another, he may find that his entitlements differ from those of persons in other countries. Depending on the circumstances such differences may or may not favour the individual. Furthermore the Commission notes that the applicants will only lose the benefit of future increases in their pensions, whose purpose broadly speaking is to compensate for rises in the cost of living in the United Kingdom. Given that they will not be living in the United Kingdom it appears reasonable that this element in their pension rights in particular should be replaced by the possibility of benefiting under the system of the country they are moving to.”
“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” (Dec. No. 5849/72, 1.10.75, D.R. 3 p. 25 at p. 31) in accordance with domestic legal requirements (Dec. No. 7459/76, 5.10.77, D.R. 11 p. 114). 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. (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.”
“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 (P1-1). That provision (P1-1) 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 (art. 14), namely his nationality, that provision (art. 14) is also applicable (see, among other authorities, mutatis mutandis, the Inze v. Austria judgment of 28 October 1987, Series A no. 126, p. 18, para. 40, and the Darby v. Sweden judgment of 23 October 1990, Series A no. 187, p12, para. 30).
B. Compliance with Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1 (art 14+P1-1)
42. According to the Court’s case-law, a difference of treatment is discriminatory, for the purposes of Article 14 (art. 14), if it “has no objective and reasonable justification”, that is if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality between the means employed and the aim sought to be realised”. Moreover the Contracting States enjoy a certain margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment. However, very weighty reasons would have to be put forward before the Court could regard a difference of treatment based exclusively on the ground of nationality as compatible with the Convention.
45. The Austrian Government submitted that the statutory provision in question was not discriminatory. They argued that the difference in treatment was based on the idea that the State has special responsibility for its own nationals and must take care of them and provide for their essential needs. Moreover, sections 33 and 34 of the Unemployment Insurance Act laid down certain exceptions to the nationality condition. Lastly, at the material time, Austria was not bound by any contractual obligation to grant emergency assistance to Turkish nationals.
46. The Court notes in the first place that Mr Gaygusuz was legally resident in Austria and worked there at certain times (see paragraph 10 above), paying contributions to the unemployment insurance fund in the same capacity and on the same basis as Austrian nationals.
50. The Court ... finds the arguments put forward by the Austrian Government unpersuasive. It considers, like the Commission, that the difference in treatment between Austrians and non-Austrians as regards entitlement to emergency assistance, of which Mr Gaygusuz was a victim, is not based on any “objective and reasonable justification”.
51. Even though, at the material time, Austria was not bound by reciprocal agreements with Turkey, it undertook, when ratifying the Convention, to secure “to everyone within [its] jurisdiction” the rights and freedoms defined in section I of the Convention.
52. There has accordingly been a breach of Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1 (art. 14+P1-1).”
“… while no right to the grant of a pension is, as such, guaranteed by the Convention, compulsory contributions to a retirement fund may give rise, in certain cases, to a right of ownership over part of the funds …. However, it is still necessary, in order for such a right to accrue, that the persons concerned should fulfil the conditions laid down by national law.”
Article 14 read with Article 1 of the First Protocol
The questions to be considered
“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?”
(i) Do the facts fall within the ambit of a substantive Convention provision?
(ii) Is there any different treatment as respects that right between the Claimant and her chosen comparators?
(iii)(a) Is the basis for the different treatment of the Claimant and the chosen comparators a ground within the scope of Article 14?
(iii)(b) Are the chosen comparators in an analogous situation to the Claimant’s?
(iv) Is there an objective and reasonable justification?
“In this area difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society. 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.”
These words were applied to the distribution of state benefit by Laws LJ (with whom the other members of the Court of Appeal agreed) in Waite v London Borough of Hammersmith & Fulham an another  EWCA Civ 482, at paragraphs 36 and 37. At paragraph 37, Laws LJ said:
“… the distribution of state benefit lies peculiarly within the constitutional responsibility of elected Government.”
In Steele Ford & Newton v CPS  1 AC 22, Lord Bridge referred, at 33E, to:
“… the special constitutional convention which jealously safeguards the exclusive control exercised by Parliament over both the levying and the expenditure of the public revenue.”
“The allocation of scarce resources and the language of priorities are what politics and government are all about. It is not a question of first reaching a moral judgement about the rights and wrongs of the expatriates’ case, and then deciding whether or not this country can afford to do anything about it. The decision about whether public expenditure on state retirement pensions should be increased in future by paying uprating increases which are not required by law at the moment is a political question which includes, but is not distinct from, the moral questions. Ultimately, it must be for the House to decide, and that is our concluding recommendation: That there should be a free vote at prime time to allow Members to express their opinion on the principle of whether the Government should pay upratings to some or all of those pensioners living in countries where upratings are not paid at present.”
“An opportunity was missed in 1972 to reach agreement with Canada which would have provided for upratings to be paid. The UK’s proposal of a comprehensive agreement foundered because of difficulties on the part of Canada. By the time these were sorted out, the UK’s position had moved on and uprating was no longer on offer.”
This emphasises both the political nature of the decisions involved and the relative complexity of the issues, and shows how the illogicality has arisen.
MR JUSTICE STANLEY BURNTON: My judgment has been distributed in draft. I am grateful to counsel for their corrections. For the reasons set out in my judgment, which are the same as those I have set out in the draft, I have come to the conclusion that this application must be dismissed. Copies of the judgment are available for members of the public and the press.
Yes, Mr Eadie?
MR EADIE: My Lord, I anticipate there are two matters that your Lordship will have to deal with this morning. First, there is my application for costs. The second of them is an application by my learned friend Mr Hunt on behalf of Miss Carson for permission to appeal.
MR JUSTICE STANLEY BURNTON: What do you say about that application?
MR EADIE: As far as that is concerned, I say nothing. It is a matter entirely for your Lordship whether to grant permission to appeal. Your Lordship is in possession of the facts and indeed has just given judgment, and nothing I say, I anticipate, will assist on that issue.
MR JUSTICE STANLEY BURNTON: I anticipated that there would be an application for permission to appeal. In my judgment this is a case in which permission should be given, and I give it.
MR EADIE: I am grateful.
My Lord, that leaves only costs. As I understand it, the issue that divides my learned friend and myself is this. My learned friend, as I understand it, will say that this litigation was, in effect, a public interest litigation. The result of that, so he says, is that there should be no order as to costs. My position, on the other hand, is it is not.
MR JUSTICE STANLEY BURNTON: You have seen his written submissions?
MR EADIE: My Lord, I have. I received them very shortly before court, but my learned friend was kind to ring me to say he was taking the point. So nothing turns a great deal on that. I hope my Lord has received by fax from me a copy of the tail-end of a judgment in a case called Smeaton, which was a 'morning after pill' case, in which --
MR JUSTICE STANLEY BURNTON: Mr Hunt's submissions were timed at 0944 this morning and your fax was at 0930.
MR EADIE: It followed a telephone message at about 0845, so the sequence is now complete.
My Lord, knowing he was going to be taking a point based on a Child Action Poverty Group case, it seemed appropriate to draw this decision to your Lordship's attention.
MR JUSTICE STANLEY BURNTON: I have not seen the judgment before, but I am aware of the case.
MR EADIE: My Lord, it was in two parts. You will see that the decision itself starts at paragraph 399, which gives some indication of the length of the earlier part of the judgment. The long and short of the earlier part of the judgment was to reject --
MR JUSTICE STANLEY BURNTON: Mine feels quite modest in comparison.
MR EADIE: The substance of what had gone before was, in effect, to reject the application for judicial review.
MR JUSTICE STANLEY BURNTON: Yes.
MR EADIE: It was an application to declare unlawful, in effect, the morning after pill.
MR JUSTICE STANLEY BURNTON: Yes.
MR EADIE: And Mumby J concluded that the regulation taking it off the 'prescription only' medicine bracket was not unlawful for a variety of reasons, not the least of which was it did not infringe the criminal law. The argument was that the prescription of that morning after pill or the taking of it would have amounted to the commission of a criminal offence under the Offences Against the Person Act. That application was rejected.
There was then a separate hearing to deal with permission to appeal and with costs. Your Lordship will see the --
MR JUSTICE STANLEY BURNTON: This is a reserved judgment?
MR EADIE: This was a reserved judgment following that further hearing. I hope I have sidelined the relevant bits; and perhaps the sensible thing would be for your Lordship to read those bits to yourself.
MR JUSTICE STANLEY BURNTON: Should I not hear what Mr Hunt has to say? He can refer me to the relevant parts and come back. The impression I have from the judgment - let me put it on the table - is that Mumby J did not consider that the fact that litigation is public interest litigation of itself justifies the departure from the normal rule.
MR EADIE: My Lord, yes. Some little more nuance than that. In effect he says that it is at large and he pointed to a large number of factors, but he particularly relied upon, although not conclusively, but he particularly relied upon the facts there that there was no indication that the claimant in that case would suffer dire financial consequences and also particularly relied upon his conclusion that 'SPUC' (Society for the Prevention of the Unborn Child) had a direct interest in the litigation, so did not fall within the category of case, such as the Child Action Poverty Group, where they have no direct interest in the outcome of the litigation.
MR JUSTICE STANLEY BURNTON: There are some somewhat negative comments on their position in this part of the judgment as persons who have provoked a dispute rather than being immediately involved in it.
MR EADIE: My Lord, there are. I do not say it is a direct analogy, but whatever else this judgment does about this particular point it does not deny in any shape or form that it is relevant to consider whether or not the particular claimant has a direct (and I would submit particularly a direct) pecuniary interest in the outcome of the litigation.
MR JUSTICE STANLEY BURNTON: But Mrs Carson's interest in this litigation, in financial terms, is minuscule in comparison with what is the principle involved, or the cost of the principle. One is talking about, I cannot remember what it was now, but it was --
MR EADIE: £300 million.
MR JUSTICE STANLEY BURNTON: -- £300 million on one side and a very small sum on the other.
MR EADIE: That is undoubtedly right, but she stands as the claimant, not quite representing, but very nearly representing, all those others who would make up the £300 million. The one thing your Lordship does not have before you today in any shape or form is any indication that an order for costs would put her in financial difficulty. I do not know what the reason for that is, but it is not very difficult to speculate as to who might be funding this litigation.
MR JUSTICE STANLEY BURNTON: Again let me put it on the table, the impression I had from the argument was that she was a representative of an association.
MR EADIE: My Lord, I am not sure it went quite as far as that.
MR JUSTICE STANLEY BURNTON: That is why I mention it. I mean, that was the impression one got, that there are associations who have been campaigning politically, quite rightly, and in one sense this is a further step. But that is just an impression, which Mr Hunt can dispel.
MR EADIE: My Lord, yes. Perhaps that may be the convenient way to deal with it: my learned friend makes the point and I can respond.
MR HUNT: Very briefly. My Lord has received and read the written submissions, I understand?
MR JUSTICE STANLEY BURNTON: I have. I had to skim them rather than read them.
MR HUNT: My Lord, yes. In relation to this costs question, quite simply I do not think the public interest nature of the case is in issue.
MR JUSTICE STANLEY BURNTON: No.
MR HUNT: I think it is accepted entirely that not every judicial review challenge is a public interest challenge, but that this is. I think that that is not really in issue. But this case is quite different from the Smeaton case simply because, there, the court made clear it was a campaigning organisation which operated primarily in the political environment or political sphere, picking a fight - "by removing the market of debate into the courtroom" were the courts words. That is quite different from this case, in which Miss Carson was an individual pensioner. She is supported by the South African Alliance of British Pensioners. My instructions are in relation to that organisation that it is comprised entirely of individual South African pensioners and there is no institutional support for Mrs Carson to bring her case. So it is an alliance of individual pensioners who themselves lose out by there being no operating in South Africa.
MR JUSTICE STANLEY BURNTON: That was the impression I had.
MR HUNT: My Lord, yes.
MR JUSTICE STANLEY BURNTON: Although there is no evidence about it, I could not imagine that Mrs Carson was in a position to bring these proceedings and be represented by leading counsel out of her pension.
MR HUNT: My Lord, yes.
The nature of that organisation is different from the nature of the organisation in issue in Smeaton, which very much is in the nature of an organisation which has for many years campaigned in the political sphere and occasionally resorts to litigation. The South African Alliance of British Pensioners has, as a last resort, having exhausted lobbying efforts, resorted to litigation. (Inaudible) this is the sole issue that that organisation really could litigate in the courts. So it is quite a distinct situation from the situation in Smeaton itself. Nor is it in any sense manufactured.
MR JUSTICE STANLEY BURNTON: No, this is a genuine grievance that has existed, as we have seen from the applications to the Commission, for twenty years or more.
MR HUNT: My Lord, yes. So, my Lord, those simply are our submissions. This is quite different from the position in Smeaton. It would be wrong, given the disproportion between the amount that Miss Carson or even the South African pensioners themselves have at stake compared to that which is at stake for the United Kingdom Government and given the size of the representative class, which is very unusually over 400,000 - and it is accepted that that is the class essentially which will be affected by the outcome of this decision - it would in those circumstances be unjust to visit the costs of the issue being decided in this court on the individual claimant and even on the South African Alliance of British Pensioners, who are all pensioners.
MR JUSTICE STANLEY BURNTON: From what you tell me, she would not personally bear the burden of an order for costs. That would be borne by the Association.
MR HUNT: My Lord, those are my instructions, but I do not have specific instructions as to the exact amount of resources available through the South African Alliance of British Pensioners, other than that they are extremely small. So, my Lord, it may be the case - and I am afraid I do not have specific evidence in relation to this question - that if an order for costs were made against Miss Carson (the only person against whom an order for costs can be made if the funds in the South African Alliance of British Pensioners are inadequate), Miss Carson would, of course, be liable for the remainder of the amount.
MR JUSTICE STANLEY BURNTON: Is that material you would like to put before me?
MR HUNT: My Lord, I understand it is not material that is available, unfortunately.
MR JUSTICE STANLEY BURNTON: Is not available?
MR HUNT: No.
MR JUSTICE STANLEY BURNTON: And cannot be made available?
MR HUNT: Can I take instructions on that? The principal submission is that even the South African Alliance of British Pensioners Association itself ought not to be made to bear the costs.
MR JUSTICE STANLEY BURNTON: I understand that.
MR HUNT: (Instructions taken.) My instructions are that the Association has £4,000 at its disposal. My instructing solicitor tells me a witness statement to that effect can be provided to the court in relation to any other availability of resources to the Association.
MR JUSTICE STANLEY BURNTON: Well, there is an element of unreality about this. I have just given permission to appeal to an organisation -- to Mrs Carson and you tell me that it has £4,000 with which to fund an appeal.
MR HUNT: My Lord, those are my instructions in relation to the amount of funds which are available.
MR JUSTICE STANLEY BURNTON: There is an inconsistency between ...
MR HUNT: My Lord, obviously it is not for me to speculate, but if there is to be an appeal, if the Alliance does decide to proceed with an appeal, obviously it will have the question to face as to whether or not it must campaign in order to raise the financing in order to finance an appeal.
MR JUSTICE STANLEY BURNTON: How many South African pensioners are there; can you remind me? Can you also tell me what the membership of the Association is?
MR EADIE: (Instructions taken.) My Lord, my instructions are that there are 37,000 South African pensioners and the number in the Association is 7,500.
MR JUSTICE STANLEY BURNTON: That is your application?
MR HUNT: My Lord, yes, subject to one further matter. If it troubles my Lord in relation to making no order as to costs at all - and I see my Lord is troubled - my Lord does have within his discretion to make an order for costs which is, of course, less than the full amount of costs and up to a particular sum given that my Lord's discretion is at large. The Legal Services Commission currently, in relation to applications for funding for public interest type cases, is developing an approach whereby it requires those who form a group in order to litigate a particular issue, such as a residents group, to come up with a total amount as demonstrating the earnestness and seriousness of their intent. So they are required to do some fundraising as it were and the Legal Services Commission then provides the remainder. If my Lord thinks that it is not appropriate to make no order as to costs in relation to my principal submission, then it may be appropriate, rather than make a full order, to make some order as to costs but reflect the fact that the Association is very small and has very limited resources and to reflect the fact that the government has won the fight.
My Lord, those are my submissions in relation to costs.
MR JUSTICE STANLEY BURNTON: I have no figures in front of me at all, so I have no basis on which I could consider making anything other than an order for costs to go to detailed assessment, or no order.
MR HUNT: The figure, on instructions, that is available is £4,000. It would be possible to provide evidence of that and for the cost matter to be adjourned to be dealt with on the papers, subject to taking instructions, would be acceptable to the claimant, and then the issue could be resolved without the need for a further hearing, with that evidence being provided to my Lord. Those are my instructions, that £4,000 is available.
MR JUSTICE STANLEY BURNTON: Thank you very much.
MR EADIE: Can I start with some basic propositions? The first proposition is, as your Lordship will know well, the general rule is that costs follow the event. That general rule is contained in CPR 44.3.2, which is set out at paragraph 402 of Mumby J's judgment.
MR JUSTICE STANLEY BURNTON: Yes.
MR EADIE: That starting point is the same in judicial as it is in other cases: see, as authority for that proposition, amongst others, the decision of Dyson J (as he then was) in the Child Action Poverty Group cases, the relevant bits of which are set out and quoted at paragraph 413 and 414.
Public interest litigation has been defined by Lord Woolf first of all in New Zealand Maori, see paragraph 411 of that judgment:
"There remains the question of costs. Although the appeal is to be dismissed, the applicants were not bringing the proceedings out of any motive of personal gain. They were pursuing the proceedings in the [broader] interest as it were of taonga..."
And going on on the same point into the judgment of Dyson J at 413, "I should start by explaining" - this is the beginning of the quote at 413:
"I should start by explaining what I understand to be meant by a public interest challenge. The essential characteristics of a public law challenge are that it raises public law issues which are of general importance, where the applicant has no interest in the outcome of the case."
My Lord, I do not advance that as being conclusive against this being a public interest type case, but what I do say is that it is a relevant and material factor for your Lordship to take into account in the exercise of the discretion, which I accept is at large, as to whether or not to make no order as to costs or some order as to costs. It is relevant whether the person concerned is genuinely seeking to litigate an uncertain point of law in the public interest or whether there is a personal/pecuniary motive lying behind, however small or large that might be; and my Lord and I have had the exchange on that.
So a variety of factors to which we point in this case are, first of all, on any view Miss Carson and those members of the South African Pensioner Association, and, indeed, those pensioners more broadly whose interest she advanced herself as protecting or forwarding, they are not in that pure category of public interest cases of the kind identified by Dyson J and Lord Woolf in those two passages. There is a personal gain motive here. So one is not even in the position that sparked the claim in their unsuccessful application for the same sort of order in Smeaton.
The second point is that there is now, at the very eleventh hour, some sort of suggestion that they might be in financial difficulty if the usual order for costs might be made. My Lord is left in an unsatisfactory position. It may be that my learned friend can now say this morning for the first time that there is only £4,000 in the kitty, as it were, but it did not take much probing from my Lord to identify that that was not actually the relevant question. The relevant question is: is there access to those funds? To which the answer is plainly 'yes'. Now the costs of this litigation are going to be -- they are not going to be astronomic. We are not talking about a full-blown lengthy trial or anything of that kind. It was a two day judicial review. The costs are not going to be insignificant, but they is no suggestion that they are going to be off the scale of what would properly and legitimately be raised. As my Lord pointed out, my learned friend cannot have his cake and eat it. He cannot on the one hand turn up before this court and say: 'I want permission to appeal,' where, no doubt, Miss Carson and those she represents would be represented by the same distinguished team; and on the other hand say: 'I am terribly sorry, we only have £4,000 in the kitty, so some sort of finite order should be made.' It is difficult to see what instructions my learned friend could get, beyond speculating or beyond self-serving evidence, to say it might not be possible to raise the requisite funds. It plainly is possible because permission to appeal has been sought, and there is every indication he intends to pursue that. It plainly is possible for her to raise the funds required for her distinguished team, including leading counsel, to take this case to the Court of Appeal. In those circumstances there is no reason, in my submission, for making any order, other than the usual and appropriate order which is that costs follow the event.
I do not know whether my Lord would like me to deal with the suggestion that there should be some finite limit.
MR JUSTICE STANLEY BURNTON: I have no figures at all.
MR EADIE: That is the point. My Lord cannot speculate.
MR JUSTICE STANLEY BURNTON: So I am unable to deal with that. Thank you very much.
MR HUNT: Very briefly in reply; in terms of the size of the class affected, the number is really very small in relation to the total size of the class - a sixtieth of the class will be expected to bear the costs. In relation to how an appeal might be funded, that, in my submission is irrelevant to my Lord's decision. That a question for the future in relation to the Association. If the government is troubled, opportunity to apply for security for costs is open to it, or the opportunity for applying for a preemptive costs order against the claimant on appeal. Those are all matters for the future. The only question for my Lord is whether it is just, given the difference in the position between the Association on the one hand and the government on the other, the importance of the issues, the importance of the legal question and the uncertainty and the public interest in having it decided, it is just to visit the costs of these proceedings on the Association. My Lord, that is what I say.
MR JUSTICE STANLEY BURNTON: Thank you very much.
RULING AS TO COSTS APPLICATION
MR JUSTICE STANLEY BURNTON: There is an issue which I have to determine as to whether an order for costs should be made against Mrs Carson in the present proceedings. The normal order, as has been said and is accepted, is that costs follow the event, that is to say the unsuccessful party pays the costs of the successful party. Therefore, if I were to follow the normal order, I should make an order that Mrs Carson pay the Secretary of State's costs, to go to a detailed assessment. I am urged not to follow that course, having regard to (1) the fact that these proceedings are a matter of wide public importance and general interest, and (2) the relatively small amount of benefit which Mrs Carson herself stands to gain from success in these proceedings as against not only the general amount involved but the position of Her Majesty's Government, which stands, if unsuccessful, to be liable to pay a very large sum indeed - something in excess of £300 million per year.
In considering whether it is right not to make an order, I take into account that Mrs Carson, as I understand the facts, did not bring these proceedings as a solitary pensioner compelled to do so by penury, but because she is representing, in an informed sense, and has the backing of, the South African Alliance of British Pensioners. That is a relative small association, I am told, with some 7,500 members out of some 37,000 South African pensioners who stand to gain if my judgment is overturned in the Court of Appeal, or above, if the matter goes further. I am also told that the Alliance has only £4,000 in the kitty with which to meet an order for costs.
I approach this matter on the basis that the Alliance and those advising Mrs Carson must have been aware that there was a contingent liability for costs if they were unsuccessful. They were aware of a line of decisions by the Commission, all of which indicated that the prospects of success were not, in my judgment, as great as they might be. They were a hurdle to overcome. I also assume that the Alliance has and will behave responsibly in relation to its position so far as Mrs Carson is concerned, that is to say having, I assume, funded the costs so far and proposing to fund the costs of an appeal in respect of which I have given permission, it would raise the monies necessary to meet an order for costs. As I say, it must have been obvious that there was, on any basis, a contingent liability for costs.
In those circumstances, it seems to me that although this is public interest litigation, it is litigation in which a large number of persons stand to benefit significantly and there is no sufficient reason for me to depart from the normal rule in that respect, and so I follow the indications given by Mumby J in the case of Smeaton on behalf of the Society for the Protection of Unborn Children  EWHC 886 (Admin), to which I have been referred today. I therefore will make an order for costs against Mrs Carson, those costs to go for detailed assessment.
However, this matter is to go before the Court of Appeal, I assume, in any event, subject to any further submissions counsel may wish to make, and what I propose to do, having made that order for costs, is to grant Mrs Carson permission against that order for costs so that the Court of Appeal can review whether the order I have made is an appropriate order in a case such as the present.
MR HUNT: I am obliged, my Lord.
MR JUSTICE STANLEY BURNTON: Are there any other applications?
MR EADIE: No.
MR JUSTICE STANLEY BURNTON: Thank you very much.
The UK legislation
(a) Basic Provisions
(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".
(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] ...”
The sum of £72.50 was substituted for the previous figure by the Social Security Benefits Up-rating (No. 2) Order 2000 (SI 2001 No. 207), with effect from 9 April 2001.
The disapplication of uprating to the Claimant’s pension
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 -
(a) is absent from Great Britain; or
(b) is undergoing imprisonment or detention in legal custody.
Section 113(3) provides:
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.
5 (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.
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.
The payment of up-rated pensions to those in certain foreign countries
Examples of Restrictions imposed by other countries on payment of pension abroad
|France||Non-nationals who are not living in France cannot claim old-age or widowhood benefits from abroad.|
|Germany||Non-nationals who are not treated as Germans receive only 70% of the pension.|
|Sweden||Non-nationals can neither retain basic pension if they are abroad for more than a year, nor claim it from abroad.|
|Australia||It is not normally possible to claim an Australian pension from abroad: age pension is payable outside Australia only if it was awarded before the pensioner left there, unless the pensioner lives in a country with which Australia has a reciprocal agreement providing for the pension to be claimed from the other country.|
|New Zealand||50% of pension payable if permanently resident abroad. Claim from abroad not permitted.|
|Canada||Old Age Security (OAS) Pension can be paid abroad indefinitely, and claimed from abroad, if the claimant has resided in Canada for a minimum of 20 years after the age of 18. If the claimant has over 10 years of residence but less than 20, OAS can be paid for the month of departure and the following six months only.
Canada Pension Plan benefits can be paid abroad and claimed from abroad.
|USA||Subject to certain exceptions, payment of pension abroad to non-nationals is limited to six months.|