Walker-Fox v Secretary of State for Work and Pensions

The Deputy Social Security Commissioner Mr Robin White decided on 29^th October 2004 that the respondent, Mr Colin Walker-Fox, was entitled to winter fuel payments of £200 for each of the winters of 2000/01 and 2001/02. The Secretary of State for Work and Pensions appeals that decision with the permission of Clarke L.J. Mr Walker-Fox writes in some bewilderment that “this whole matter is now running out of control and has reached a point of incomprehensible proportions”, saying, “Surely it is hardly necessary for so small a claim to be dealt with by the Royal Courts of Justice”. It is difficult not to have some sympathy for that view but the Secretary of State has persuaded us that an important point of law is involved having wide-ranging consequences for the administration - and payment - of social security benefits.

What is the dispute? In essence the question is whether time limits for claiming benefits are lawful. The issue arises in this way. The Social Fund Winter Fuel Payment Regulations 1998 (“the 1998 Regulations”) came into force with effect from 16^th January 1998 and provided that a winter fuel payment to meet expenses for heating be paid to various categories of persons, one of which was those who were ordinarily resident in Great Britain and who were men aged 65 or over or women aged 60 or over to whom retirement pension was being paid. No time limit was imposed for the making of these claims because payment was automatically linked to the receipt of the prescribed category of benefit.

Mr Walker-Fox was born on 8^th October 1937 and so he was only 60 years old when the 1998 Regulations came into force, and thus seemingly too young to claim the benefit. He was at the time ordinarily resident in Great Britain but he moved to France on 10^th September 1999 and he has been ordinarily resident there ever since.

On 19^th December 1999 the European Court of Justice held in R v Secretary of State for Social Security, ex Parte Taylor [1999] ECR I-8955 that winter fuel payments fell within the scope of Article 3(1) of Directive 79/7/EEC on the progressive implementation of the principle of equal treatment for men and women in matters of Social Security, and that the derogation in Article 7(1)(a) was not applicable to exempt the discrimination between men and women which existed in relation to conditions of entitlement to payments. That discrimination as to the age at which the benefit was payable could not be objectively justified.

The government responded by revoking the 1998 Regulations and introducing the Social Fund Winter Fuel Payment Regulations 2000 (“the 2000 Regulations”) which came into force on 3^rd April 2000. Under regulation 2(1) a winter fuel payment is payable to a person who:-

has attained the age of 60 in or before the qualifying week.”

Regulation 3(1) is material to this appeal. It provides that:-

The effect of paragraph (2) read with Regulation 4(1) and (2) is to permit a winter fuel payment to be made without a claim once it appears from official records that the person is entitled to payment, that is to say, once an old-age pensioner has received the benefit he will continue to receive it automatically.

Since the judgment in Taylor principally affected men aged between 60 and 65 for the winters 1997/98, 1998/99 and 1999/2000, the Secretary of State permitted them to claim their winter fuel payments retrospectively, there being no time limit in the 1998 Regulations which would have barred those claims.

The next development in what the Deputy Commissioner described as “the winter fuel payments saga” concerned Council Regulation No. 1408/71 (“Regulation 1408/71”) on the application of Social Security schemes to employed persons, self-employed persons and members of their families who are or were subject to the legislation of a Member State (Article 2). Among the several benefits covered are old-age benefits (Article 4(1) (c)). Article 10 is material for our purpose:-

Notwithstanding Regulation 1408/71 the Secretary of State steadfastly maintained that the residence condition in regulation 2(1)(a) of the 2000 regulations (the need to be ordinarily resident in Great Britain) barred any application for winter fuel payments by those who had not acquired their benefits before moving to that other state. Claims were also rejected from those who asserted that a winter fuel payment was a supplement to their state retirement pension and payable as such.

The European Commission rejected the government’s stance and protracted discussion ensued. The government eventually capitulated, finally acknowledging that winter fuel payments constituted old-age benefits within Article 4 of Regulation 1408/71 and were accordingly “exportable” from the U.K. to other Member States under Article 10 of the Regulations in the case of individuals who had become entitled to winter fuel payments before ceasing to be ordinarily resident in the U.K.. That was announced to the House of Commons on 19^th July 2002 when the Minister gave a written answer to a question enquiring about the progress made in discussions with the European Commission. Mr McCartney said this:-

In response to a further question, a written answer given on 6^th November 2002 stated that:-

On 2^nd July 2003 the agreement between the United Kingdom and the European Commission was reported in a written answer to the European Parliament relevant parts of which read as follows:-

Mr Walker-Fox read about these developments in a newspaper and on 6^th November 2002 claimed winter fuel payments for the winters of 2000/01 and 2001/02. On 31^st December 2002 he applied for payments for the preceding years, namely 1997/98, 1998/99 and 1999/2000.

His claims for the winters of 1997/98 to 1999/2000 have been met because, as I have indicated, there was no time bar prescribed in the 1998 Regulations. Claims for benefits for the winters of 2002/03 and those that have followed have been paid automatically because he now appears on the official records as being entitled to payment. His claims for payment for 2000/01 and 2001/02 have not been met. The Secretary of State refuses to pay for those years on the ground that the claims were not made within the time prescribed by regulation 3(1)(b) of the 2000 Regulations, namely before 31^st March 2001 and 31^st March 2002 respectively. It is acknowledged that he has met the age and residence conditions as they must now be understood.

His case is simple: it is unfair to insist on a time bar which had passed before the government admitted in July 2002 that claimants in his position were entitled to the payments. He should not be prejudiced by relying on the letter of the law. He, the little man, should not be expected to have taken on the mighty state in judicial review proceedings over the legality of the 2000 Regulations whilst the real battle was being waged in Brussels. That, however, is exactly what the Secretary of State says he should have done.

The Secretary of State’s response, as set out in Mr de la Mare’s skeleton is this:-

I well understand why Mr Walker-Fox does not find it a particularly attractive argument. There the Secretary of State was fighting for all he was worth to deny the expatriates their entitlement, yet now he says to them, “Well you could of course have taken me to court to have my residence qualification disapplied”. I shall return to this difference of view later.

Whatever the merits, or lack of them, the legal argument has to be addressed by us. Unfortunately neither Mr Walker-Fox, who has been unable to travel from France, nor anyone else is present to address any counter-argument. It is right, however, to acknowledge that in the best traditions of the Bar, Mr Thomas de la Mare has given us all assistance he can and has genuinely tried to argue both sides of the case. We are grateful to him.

Shorn of detail the legal question is whether principles of law enunciated by the Court of Justice in Emmott v Minister of Social Welfare [1991] ECR I – 5475 retain their authority or whether they have been gradually so whittled away that the case is now to be seen as based narrowly upon its own facts.

We must, therefore, start with the facts of Emmott. Mrs Emmott was a married woman with two dependent children who had been in receipt of Irish disability benefit since 1983 paid at the reduced rate which was then applicable to all married women. From May 1986 until November 1986 she was paid the benefit at the rate applicable to a man or woman who did not have any child dependants. Thereafter she was paid at the rate applicable to a man or woman with increases for her children. In March 1987 the Court of Justice handed down its decision in Case 286/85 in the matter of McDermott and Cotter v The Minister for Social Welfare and Attorney General (1987) ECR 1453 whereby the Court of Justice held that the Irish measures failed properly to implement Article 4(1) of Directive 79/7/EEC in that married women were not receiving equal treatment. On learning of that decision Mrs Emmott entered into correspondence with the Irish welfare authorities. Her letters received the reply that judgment was still pending in the Irish High Court in the case of McDermott and Cotter and that until the question of payments retrospective to December 1984 (the date by which the Directive had to have been implemented) was resolved in that case nothing could be decided in relation to her. She instructed solicitors and in July 1988 she sought permission to bring proceedings for judicial review of the decisions of the Irish authorities in relation to her social welfare entitlement. The Minister for Social Welfare then asserted that she was out of time having failed to seek judicial review within the three month time limit. The Irish Court sought a preliminary ruling on the following question:

It is necessary to cite much of the judgment of the court:-

It is to be noted that the judgment begins with reference to what Mr de la Mare refers to as the “orthodox” view consistently held by the ECJ in Rewe and San Giorgio. In Rewe the German company paid certain charges for the import of French apples and then applied for a refund as the charges were equivalent to custom duties and were unlawfully levied by virtue of Article 13 of Regulation 159/66 EEC. The German court held that the claims were brought out of time under provisions of the German court’s procedural code. The ECJ held:-

In San Giorgio the Italian importers sought to recover unlawful customs duties on the importation of dairy products. The Italian law precluded the claim where the charge had been passed on to another person. The court held:-

Thus, as I understand it, the orthodox position is that in order to comply with the principle of equivalence, the national time limit must apply equally to national claims as to Community-based claims. It must comply with the principle of effectiveness, that is to say, it must not make reliance on Community law virtually impossible or excessively difficult and a reasonable time limit will not fall foul of that principle. The imposition of time-limits is an application of the principle of legal certainty which protects both the individual and the administration. If that orthodoxy applies to this case, Mr Walker-Fox loses.

One notes that Emmott seemed to justify its departure from orthodoxy because of the particular nature of directives so that until the directive has been properly transposed time does not run.

One might be forgiven for thinking that would have been a complete answer in the case of Steenhorst-Neerings v Bestuur van de Bedrijfsvereniging voor Detailhandel Ambachtenen Huisvrouwen [1993] ECR I-5475. There the essence of the question for the court’s decision was whether Community law precluded the application of a national rule of law according to which benefits for incapacity for work were payable not earlier than one year before the date of the claim where the individual relied on rights conferred directly by Article 4(1) of Directive 79/7 in circumstances where, as in Emmott, the Member State had not properly transposed that provision into national law. This time, however, the court held:-

Having given a short summary of the facts in Emmott the court went on:-

I confess I find the distinction difficult to grasp. The court says in paragraph 22:-

The next case is Johnson v Chief Adjudication Officer [1994] ECR I 5483. Mrs Johnson was allowed a Severe Disablement Allowance but her claim for arrears was backdated for no more than a year before she made her claim. She relied on Emmott. The court held:-

The court further explained that in contrast to the rule in Emmott:-

Next is the important case of Fantask A/S v Industriministeriet [1997] ECR I-6783. The cases before the court concerned claims for repayment of charges paid in connection with applications for company formation or increases in capital. Such charges were levied in breach of Directive 69/335. The claims were subject to a limitation period of five years. There was also a principle of Danish law which precluded a taxpayer from obtaining repayment of overpaid charges if they were levied in accordance with long-standing rules assumed by both the authorities and taxpayer to be lawful. Mr de la Mare submits that it is important to note that questions 6 and 7 are quite different, a difference which he says the Deputy Commissioner failed to observe and in the result fell into error. By its sixth question the Danish court sought to ascertain:-

What is very interesting is the opinion of Advocate-General Jacobs dealing with questions six and seven. Here is a powerful demolition of Emmott. The contrasting views are set out in paragraph 55 where a number of governments consider the Emmott principle too broad inasmuch as it has the effect of imposing an almost limitless retrospective liability on Member States. On the other hand the Commission argue in a way Mr Walker-Fox would no doubt support that to allow a Member State to rely on time limits would permit it to escape the consequences of its own unlawful conduct and discourage it from taking steps to remedy the defects in its rules.

These powerful criticisms of the Emmott ruling emerge. First, it has the paradoxical result that greater protection is given to rights under Directives than to rights conferred by Regulations and by the Treaty itself. Secondly, an individual should not be considered not to have notice of a Directive merely because it has not been transposed into national law. Thirdly, the suggestion that in the absence of correct implementation an individual can never be sure of the full extent of his rights is difficult to reconcile with conditions for the direct effect of Directives which presupposes that the basic content of the right conferred is sufficiently clear for it to be protected by the national legal system. Fourthly, uncertainty of the rights conferred in the case of an unimplemented Directive is no more likely than in the case of a Treaty provision, often broadly worded and therefore leaving considerable scope for uncertainty. Fifthly, disapplying the time limit would leave the State open to far-reaching claims for back payments and such a result would wholly disregard the balance which must be struck in every legal system between the rights of the individual and the collective interest in providing a degree of legal certainty for the State, especially in matters of taxation and Social Security legislation.

Advocate-General Jacobs summarises this as follows:-

He does not flinch from some criticism of the Steenhorst-Neerings and Johnson decisions pointing out that it is doubtful whether it is possible to make a general distinction of the kind mentioned in those cases between a time limit acting as an absolute bar as in Emmott and as merely a limit to the extent of the claim as in those two cases. Moreover the Emmott reasoning that the individual cannot ascertain his rights until the Directive has been properly implemented would preclude reliance by Member States on either type of time limit. He sees the crux of the Emmott ruling to be that it was unjust in the particular circumstances of the case to permit the Irish authorities to rely on the time limit laid down by national law given the way the authorities lulled her into inactivity during which the time limit was running. He suggested that Emmott:-

So he concluded:-

Turning now to the court’s decision and the answer it gave to the sixth question, the court said this:-

In giving his decision, the Deputy Commissioner relied on those two paragraphs. He did not refer to the way the court dealt with the seventh question which, being directed to reliance on a limitation period, lies at the heart of Mr Walker-Fox’s claim.

The gist of the judgment on that question is contained in these paragraphs:-

The Deputy Commissioner carefully set out the background and the facts. It is pertinent to note that all he said about Emmott was this:-

He then recited several passages from the subsequent Community law case law. The crux of his decision is contained in these paragraphs:-

So he disapplied the time limit holding that the government was required to permit a reasonable time for claims to be made following its agreement with the Commission. He had no difficulty in regarding the time within which the applicant made this claim for the years in question as being reasonable. He allowed Mr Walker-Fox’s claim accordingly.

The first ground of appeal is that the Commissioner’s conclusion of virtual impossibility is premised upon reasoning that no claim for winter fuel payments by those living abroad would be possible until the U.K. had brought its practice into line with the requirements of Regulation 1408/71. It is submitted that such an approach effectively but impermissibly resuscitates the wide reading of Emmott which on a proper view of the subsequent authorities has been abandoned.

I am not persuaded that the Commissioner has actually relied on, still less resuscitated, Emmott. In paragraph 28 of the decision he gave a bare outline of the case adding that the scope of the division has been clarified in later case law. This is not the unequivocal language of reliance on the case. Moreover I read paragraph 34 of his decision to be an assertion of the orthodoxy of Rewe, reasserted as the guiding principles by paragraph 48 of Fantask. I do not understand the Deputy Commissioner to be saying, “Emmott disapplied a time limit; this is a time limit; therefore I disapply it”. On the contrary his reasoning is this, “If the claim had been in time, it would have been rejected; it would have continued to have been rejected until the government capitulated in July 2002; therefore it was virtually impossible or excessively difficult to make a claim before then”.

Although I do not accept the full thrust of the Secretary of State’s submission I nonetheless consider that the Deputy Commissioner’s reasoning is fallacious. It confuses the making of a claim with the outcome of the claim. The real question is whether it was virtually impossible or excessively difficult to make the claim.

What in reality stood in the way of a person in another EEA country making a claim in time in the years 2001 and 2002 was the fact that on reading the 2000 Regulations and accepting them to be the letter of the law, he would see no point in applying at all because he did not meet the clear residential qualification in regulation 2(1)(a). A potential claimant is, however, presumed to know the law (a fiction which is increasingly more of a joke in a real world inundated by legislation, primary and secondary, flooding in on us from Westminster, Whitehall and Brussels). However unreal and therefore unfair it may appear to many, I have to conclude that, in the light of that presumption, he must be taken to know the law contained in Regulation 1408/71 better than the Secretary of State seemed to have understood it at the time. He is deemed to know that a winter fuel payment is a form of old age benefit which is exportable. If Advocate-General Jacobs is correct, as I respectfully think he is, to say that an individual cannot be considered not to have notice of a Directive merely because it has not been transposed into law, then the individual’s position is all the weaker when his rights flow from a Regulation which is directly applicable and needs no transposition.

Now I can easily accept that in the real world in which life is lived, it could be said to have been virtually impossible or excessively difficult to make a claim in circumstances where the individual is understandably ignorant in fact of his rights and where his government, whose duty it is to comply with EC Regulations, is steadfastly denying their application. In the legal world it is different. With knowledge of the law the arguments in favour of the exportation of the benefit were not excessively difficult to see or to understand and the making of the claim was thus perfectly possible. For that reason I conclude that the Deputy Commissioner erred in posing the question to be answered to be whether the position for which the government had been arguing, which was not resolved until July 2002, rendered the possibility of a claim in time being virtually impossible or excessively difficult. The proper question is whether a claimant with knowledge of the law (which he is presumed to know) could have applied in time. To that question the answer is sadly “Yes”. The Deputy Commissioner erred in finding that it was virtually impossible or excessively difficult for Mr Walker-Fox to make his claim in time and for that reason the appeal should be allowed.

Although, therefore, it is not strictly necessary to consider what is left of Emmott in the light of the subsequent rulings of the ECJ, I have come to the clear conclusion, if I am permitted to utter it, that, again in agreement with Advocate-General Jacobs, it should be confined to very exceptional circumstances. They are that in some unconscionable way the state has obstructed the exercise of the individual’s judicial remedy or contributed to his failure to exercise it. Such unjust conduct would make it a breach of the principle of effectiveness which underpins this jurisprudence. B.S. Levez v T.J. Jennings (Harlow Pools) Ltd. [1998] ECR I-7835 is a similar example, the conflict in question being that of the employer of the applicant. There Mrs Levez was misled by her employer who maintained that she was being paid at the same salary as her male predecessor. That was blatantly untrue. The court held:-

The question then arises whether the government has behaved in an inequitable way here which makes it unjust for it to rely on the time bar. This is the matter to which I said in paragraph 18 I would return. For the government genuinely to advance a view of the law and subsequently to acknowledge that the argument cannot prevail, cannot, in my judgment, come close to being the kind of unconscionable conduct which the court should not countenance. This case is on its facts miles away from Emmott. The Secretary of State may have taken a bad point in Brussels but he was in no way actively misleading the applicant or lulling him into a false sense of security. The narrow reading of Emmott to which it has been confined by the subsequent ECJ judgments does not apply in this case. Moreover it is only fair to the government that I should record that the Secretary of State has taken a generous approach to what constitutes a claim for payment of the winter fuel benefits. First, anyone who before the cut-off dates had approached either the United Kingdom authorities or the Commission to complain about the Secretary of State’s refusal to export benefits was treated as having “claimed” the benefits. As a result among others 147 people living in other EEA Member States who had so complained to the Commission have received their benefits. It is not possible for the Secretary of State to quantify how many individuals contacted the Secretary of State in time but it was in the region of 2,000. Secondly, those who had acquired an entitlement to the benefit by being treated as automatic payees because they were receiving state retirement pension and were absolved from making a claim, but who then moved abroad received their payments because the Secretary of State agreed not to enforce the time limit against them. It follows that I cannot see that the Secretary of State has behaved at all unfairly in this case.

The Secretary of State’s second ground is that the time limit should be upheld in this case because it is closer to the provisions limiting claims in Steenhorst-Neering and Johnson than the time limit in Emmott. I find this a most dubious distinction. As Advocate-General Jacobs said in Fantask in paragraph 74:-

The time limit precluding Mrs Emmott’s advancing her claim for judicial review and thus to recover the payment to which she would otherwise have been entitled was a bar to her proceeding and in consequence a bar to her recovering anything at all. In our case we are dealing with annual payments of £200. To rely on the time limit is to achieve exactly the same effect, namely that Mr Walker-Fox recovers nothing at all for that year. This is a bar to proceedings, not merely a limit on the period prior to the bringing of the claim in respect of which arrears are payable. I reject the Secretary of State’s submission that denying him the payment for the disputed years but allowing him to claim for 2003 makes this case analogous to a limitation of the period for which recovery can be obtained. It is quite wrong to analyse the 2003 claim as a claim for more than that year’s payment. Each year is subject to a separate claim. Thus I am not surprised that the Deputy Commissioner did not address this distinction. He was correct to ignore it.

The third ground of appeal is that the Deputy Commissioner misapplied and misinterpreted the ECJ’s ruling in Fantask because he quoted the passages which answered the sixth question and failed to quote the passages dealing with the relevant seventh question. This is a justified criticism but it is not a material one because had he expressly applied paragraphs 45-52 of that judgment he would have concluded, as paragraph 48 makes clear, that the real test is whether the limitation period rendered it virtually impossible or excessively difficult to exercise the rights conferred by Community law. That is the very question he addressed although, for the reasons I have given, he did not answer it correctly.

The final ground of appeal is that the Deputy Commissioner failed to appreciate that the wide interpretation of the ECJ’s ruling in Emmott had only ever applied to cases based on misimplementation of a Directive and that, accordingly, it had no application to cases based upon alleged breach of a directly effective Treaty Article or directly applicable Regulation. I agree that this case can be distinguished from Emmott on that basis. This court has held in Biggs v Somerset County Council [1996] I.C.R. 364, 377 that:-

I would add, however, that the criticism is perhaps a little unfair on the Deputy Commissioner. In paragraph 35 he drew attention to the fact that much of the case-law relates to the failure to implement or implement fully the requirements of Directives, but he added that the principles of equivalence and effectiveness apply regardless of the character of the Community provision which gives the Community right. He recognised that the provision here was a Regulation. He focused on its effectiveness and so I do not criticise his approach.

Regrettably I conclude he reached the wrong answer. I would therefore allow the appeal.

I agree.

I also agree.