Courts

DISSENTING OPINION OF JUDGES TULKENS (Belgium), VAJIĆ (Croatia), SPIELMANN (Luxembourg), JAEGER (Germany), JOČIENĖ (Lithuania) & LÓPEZ GUERRA (Spain)

1. We are unable to find that there has been no violation of Article 14 of the Convention taken in conjunction with Article 1 of Protocol No.1.

2. Article 14 of the Convention provides that the enjoyment of the rights and freedoms set forth in the Convention are to be secured without discrimination. As the judgment rightly notes, only differences in treatment based on a personal characteristic (or “status”) by which persons or groups are distinguishable from each other are capable of amounting to discrimination within the meaning of Article 14. In conformity with previous case-law, the judgment rightly confirms that place of residence constitutes an aspect of personal status (see paragraphs 70-71 of the judgment).

3. The applicants are in a relevantly similar situation, the only difference being their place of residence, which, as identified by the British authorities, is a personal characteristic distinguishing them from all other pensioners.

4. The majority consider that there has been no violation of Article 14 of the Convention because the two groups (pensioners residing in the UK and pensioners residing abroad) are not in relevantly similar positions (see paragraph 85 of the judgment), so that a difference in treatment could be accepted. A genuine comparison (paragraph 86) would not hold water in the majority’s view because of the range of economic and social variables which apply from country to country (ibid.).

5. For us, to begin with, it seems difficult to identify “residence” – quite rightly – as one of the prohibited grounds under Article 14 while at the same time using this characteristic as the main reason for distinguishing between the two groups of pensioners. The majority approach therefore seems self-contradictory and inconsistent with the spirit of this provision.

6. Moreover, the conclusion of the majority is very difficult to accept because all the members of both groups in the comparison (pensioners residing in and outside the UK) share a wide range of identical characteristics. All of them are members of, and have contributed to, the National Insurance system, according to the rates fixed by law, which are general and binding in nature. All of them have been awarded pensions according to the same general rules, including common rules determining the number of years of contributions required to accrue pension rights, the length of the period to be taken into account in each case, and the amount of the initial pension to which they are entitled according to these general rules. All of them (whether they reside in the UK or not) have therefore been included, under the same conditions, in a system whose goal is to guarantee that when reaching retirement age they will have an income based on the number of years they have contributed to the pension system, and on the amount of those contributions.

7. The majority maintain that the fact that both groups have made equal contributions to the National Insurance system does not place them in an equal position, and constitutes an insufficient ground to equate the position of those who receive up-rated pensions with the position of those (such as the applicants) who do not. The majority are correct in stating that the funds for the payment of pensions derive from many sources, and not only from the (previous) contributions of current pensioners. But the sources of the funds to pay National Insurance pensions are not relevant in this case. Whatever these sources may be at any given time, the undisputed fact is that all members included in the system who have made contributions to it were equally subject to identical general rules concerning the amount of those contributions, the way in which they were paid, and the conditions required to establish the initial pension. In other words, the right to a pension and the right to be treated equally when receiving a pension derive, for all pensioners, from having complied with the general conditions and rules of the system established on an equal basis for all its members, and do not derive from the material sources from which pensions are paid at any given time.

8. Another very relevant characteristic is common to all the members of both groups: the initial value of their pensions, in real terms, is subject to a continuous loss of purchasing power, owing to the universal and undeniable phenomenon of currency depreciation (in this case, of the UK currency). The rate of depreciation may vary from year to year, but it is (and this was not denied by the parties to the case) a common and accepted fact.

9. A formula to compensate for depreciation is calculated in the pensions received by pensioners residing in the UK, so that the initial value of their pensions remains unaffected by inflation. No such formula is applied to non-resident pensioners, so that the progressive depreciation of their pensions is not compensated in any way. The nominal monetary value of the initial pension remains the same, no matter the rate of inflation and the corresponding depreciation of sterling. The consequences of this depreciation are very considerable. In the case of the first applicant, Ms Carson, residing in South Africa, over the first five years (2000-2005) the lack of up-rating resulted in a loss of 28% of her weekly pension, in comparison with someone in the same circumstances residing in the UK. Of course, the comparative loss increased further with time.

10. Given the characteristics shared by both groups of contributors to the pension system, no relevant differences can be found to justify such a radical and unfavourable difference in their treatment, and the Government do not provide convincing reasons in this regard. The fact of residing in another country cannot be considered sufficient justification. As indicated above, such an argument would be inconsistent with the spirit of Article 14 of the Convention.

11. The pension system of the UK is logically designed to take into account the needs of those residing in the UK, which is presumably the case of the vast majority of pensioners. But that is no justification for subjecting pensioners who choose not to live in the UK to extremely unfavourable and unequal treatment in comparison with those who do. There will of course always be differences in depreciation rates for pensioners residing in other countries, depending on exchange rates, the comparative cost of living and other factors. But these factors do not preclude the accepted fact that, at least based on the experience of a century, the depreciation of UK currency is undeniable and unavoidable, and in the space of a few years such depreciation results in an irreparable deterioration in the real value of pensions paid to persons not residing in the UK. Therefore, the complete denial (as is the case) of any formula for up-rating pensions of pensioners not resident in the UK (whether or not the aforementioned factors are taken into account) represents a disproportionate difference in treatment for which there is no convincing justification.

12. In a world of computers, the alleged complexity of such a formula for up-rating the pensions of non-UK pensioners can hardly be regarded as a justification. Nor is it any justification that non-residents are not beneficiaries of the UK health system, since if anything, this fact further increases their unfavourable position vis-ŕ-vis pensioners residing in the UK. Finally, while it is true that non-residents do not pay taxes in the UK, it is equally true that they do not receive the services paid for with those taxes, and, in any case, this could be remedied within the terms of an appropriate up-rating formula.