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    [2007] UKSSCSC CIB_2248_2006 (19 November 2007)

    DECISION OF THE SOCIAL SECURITY COMMISSIONER
  1. My decision is given under section 14(8)(a)(i) of the Social Security Act 1998:
  2. I SET ASIDE the decision of the Doncaster appeal tribunal, held on 9 May 2006 under reference U/01/003/2006/00418, because it is erroneous in point of law.
    I give the decision that the appeal tribunal should have given, without making fresh or further findings of fact.
    My DECISION is that the claimant's claim for incapacity benefit must be decided in accordance with paragraphs 43 and 50 below.
    I abridge the time for appealing to Court of Appeal to one month from the date when this decision is issued to the parties (regulation 5(2)(a) of the Social Security Commissioners (Procedure) Regulations 1999).
    REASONS
  3. I have to decide whether the refusal of incapacity benefit to the claimant was discrimination in European law and, if it was, what remedy he is entitled to. I apologise to the claimant for the time I have taken to come to a decision in his case.
  4. Terminology

  5. I need some terminology to describe the various stages of the claimant's life. I have decided to use the following expressions. They are not perfect, but I hope they are helpful and informative without being offensive or conveying any implications that the claimant would consider inappropriate:
  6. •    registered gender is the gender shown on the birth certificate;
    •    assigned gender is the gender assigned by surgery;
    •    certified gender is the gender recognised by a gender recognition certificate under the Gender Recognition Act 2004; and
    •    legal gender is the gender recognised in law. This will be the claimant's registered gender until it is replaced by a certified gender.

    The 2004 Act uses the expression 'acquired gender'. I have avoided that terminology because, I suspect, the claimant would say he has always been male.

    The facts - personal

  7. I shall refer to the claimant as 'he'. He was born on 18 August 1942 and his registered gender at birth was female. From the age of 19, he lived as a man. He commenced therapy for gender reassignment in 1999 and, after some delay, underwent surgery on 24 February 2003. From that date his assigned gender was male, but his registered gender remained as female. In due course, he applied for a certificate to recognise his assigned gender under the 2004 Act and this was issued on 30 November 2005. From that date his certified gender was male, as was his legal gender.
  8. The facts – benefit entitlement

  9. When the claimant attained 60 on 18 August 2002, his entitlement to incapacity benefit ceased, because a person of his registered gender was not entitled to that benefit after that age: section 30A(2)(a) of the Social Security Contributions and Benefits Act 1992. He had little option but to claim a retirement pension. This was awarded on the basis of his registered gender as female. The amount of his retirement pension was about £20 less than the incapacity benefit he had previously received.
  10. When the claimant obtained his gender recognition certificate on 30 November 2005, his legal gender changed to male. The pensionable age for a person of that gender is 65. Accordingly, the 2004 Act provided that entitlement to retirement pension should cease: see section 3 of, and Schedule 5 to, the Act.
  11. Having been deprived of his retirement pension, the claimant made a claim for incapacity benefit on 2 December 2005. This was refused on 2 February 2006. The claimant exercised his right of appeal, but the appeal was dismissed by the appeal tribunal. The chairman recorded that the legislation was discriminatory on the ground of sex, but that the discrimination in pension law had been held lawful. The claimant then appealed to a Commissioner with the leave of a district chairman.
  12. To bring the history up-to-date, the claimant became entitled to retirement pension on his 65th birthday, shortly before the hearing before me, although it had not yet been put into payment. The amount of the pension now payable has been increased by autocredits for the five years between his 60th and 65th birthdays.
  13. The issue

  14. The issue for me is whether the claimant was entitled to incapacity benefit on his claim made on 2 December 2005. There is no dispute that under the legislation as enacted he is not entitled, because he does not satisfy the contribution conditions. He fails to do so because of the gap in his entitlement to incapacity benefit forced upon him by virtue of his registered gender at the time when he attained 60. The issue therefore becomes whether the legislation is in breach of European law, either of the European Convention on Human Rights or of the European Community.
  15. The hearing

  16. I held an oral hearing to consider the issues raised by this case. The claimant did not attend, but was fortunate to have the services of Mr Patrick Doris accompanied by Ms Strawbridge, of the firm of Freshfields Bruckhaus Deringer by arrangement with Liberty. The Secretary of State was represented by Mr Tim Ward, of counsel. I am grateful to the representatives for their skeleton arguments and their presentations at the hearing.
  17. Mr Ward did not deal with the issue whether there had been discrimination. After the hearing, I issued a direction to the Secretary of State for observations on this. I have not needed to trouble Mr Doris for a response to those observations.
  18. My jurisdiction

  19. Mr Ward rightly reminded me that as a Commissioner my jurisdiction is limited. That means:
  20. •    My jurisdiction is appellate and limited to the tribunal's decision of 9 May 2006. That decision, in turn, was appellate and limited to the Secretary of State's decision on the claim for incapacity benefit that was made on 2 December 2005 and refused on 2 February 2006.
    •    I have no power to act outside my jurisdiction in order to implement European Community law: Unibet (London) Ltd v Justitiekanslern Case C-432/05[2007] 2 CMLR 30 at paragraph 39.
    •    I have no power to make a declaration of incompatibility in respect of, or to award damages for breach of, a Convention right under the Human Rights Act 1998.
    I - The European Convention – the Human Rights Act 1998
  21. I begin with the European Convention, because the law of the European Community depends in part on the Convention authorities.
  22. Mr Doris argued that there had been a violation of the claimant's rights under Articles 8 and 14 of the European Convention on Human Rights.
  23. The Convention rights

    'ARTICLE 8
    RIGHT TO RESPECT FOR PRIVATE AND FAMILY LIFE
    1. Everyone has the right to respect for his private and family life, his home and his correspondence.
    2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
    ARTICLE 14
    PROHIBITION OF DISCRIMINATION
    The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground 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.'

    The case law on assigned gender

  24. In Goodwin v United Kingdom (2002) 35 EHRR 16, the European Court of Human Rights decided on 11 July 2002 that the United Kingdom was in breach of Articles 8 and 12. It was no longer within a State's margin of appreciation to fail to recognise in law a person's assigned gender. See paragraph 93 of the judgment. And it was wrong to have an absolute prohibition on the right to marry. See paragraph 103. The Court decided that no separate issue arose under Article 14. See paragraph 108.
  25. In Grant v United Kingdom (2007) 44 EHHR 1, the Court decided: (i) that the applicant had no status as a victim for any date before 11 July 2002 as the state of the law was until then within the State's margin of appreciation; and (ii) that she lost that status on 1 July 2004 when the Gender Recognition Act 2004 came into force. See paragraphs 41 and 42 of the judgment. It is clear from those paragraphs that the Court considered that the 2004 Act complied with the judgment in Goodwin. As in Goodwin, the Court decided that no separate issue arose under Article 14. See paragraph 51.
  26. Violation in this case

  27. Mr Doris made three arguments that I reject on the grounds that they are incompatible with Goodwin and Grant: (i) the violation ran from 18 August 2002 to at least 30 November 2005; (ii) there was a breach of Article 14 of the Convention; and (iii) there was an ongoing violation because the 2004 Act was not retrospective and, therefore, did not provide full recognition for the claimant's assigned gender.
  28. Applying that law to the circumstances of this case produces this result. There could only be a violation of Article 8 between the date of Goodwin (11 July 2002) and the date when the 2004 Act came into force (1 July 2004). As the violation could only relate to failure to give legal recognition to an assigned gender, there was no violation before the date of the claimant's surgery (24 February 2003). So the only period for which the State may have been in breach of the claimant's Convention right under Article 8 was between 24 February 2003 and 1 July 2004.
  29. However, I do not need to decide if that violation, or any other violation, has affected the claim for incapacity benefit that is before me, because there is no remedy that I could give under the Human Rights Act 1998. I now explain why.
  30. Remedy - interpretation

  31. Section 3(1) of that Act imposes a duty on me to interpret and give effect to legislation in a way that is compatible with Convention rights in so far as it is possible to do so.
  32. Mr Doris referred me to a number of cases in which the superior courts have interpreted legislation in ways that would not be permissible under normal rules of interpretation, but were necessary in order to render the legislation compliant with a Convention right. He cited: R v Offen [2001] 1 WLR 253; R v A [2002] 1 AC 45; R (Middleton) v West Somerset Coroner [2004] 2 AC 182; and R (Sacker) v West Yorkshire Coroner [2004] 1 WLR 796.
  33. I am not going to set out the issues that arose in those cases or how the courts resolved them through interpretation under section 3. I accept, of course, their authority as decisions binding on me, but that authority is of limited relevance. Cases are authoritative in so far as they: (i) decide that section 3(1) authorises interpretation but not legislation (as Lord Nichols said in Ghaidan v Godin-Mendoza [2004] 2 AC 557 at paragraph 33); and (ii) illustrate the way in which the interpretive duty can be applied. But the application of section 3 will always involve detailed consideration of particular statutory provisions in order to see if it is possible to extract from, or impose upon, the language a meaning that is compatible with a particular Convention right. The very individuality of that exercise reduces its potential value in other and different circumstances. It would not be: (i) right to try to translate a particular approach from one piece of legislation to another; or (ii) fair to the claimant to hold it against him if the techniques employed in the authorities cited did not assist in his case.
  34. Mr Doris set out various ways in which I might interpret the legislation relevant to this case. I will take one example. Section 30A of the Social Security Contributions and Benefits Act 1992 reads:
  35. '(1) Subject to the following provisions of this section, a person who satisfies
    (a) either of the conditions mentioned in subsection (2) below; or
    (b) if he satisfies neither of those conditions, each of the conditions mentioned in subsection (2A) below,
    is entitled to short-term incapacity benefit in respect of any day of incapacity for work ("the relevant day") which forms part of a period of incapacity for work.'

    Mr Doris suggested that this could be read as

    '(1) Subject to the following provisions of this section, a person who satisfies or has, in breach of EC law or the European Convention on Human Rights, been prevented by operation of law from satisfying:
    (a) either of the conditions mentioned in subsection (2) below; or
    (b) if he satisfies neither of those conditions, each of the conditions mentioned in subsection (2A) below,
    is entitled to short-term incapacity benefit in respect of any day of incapacity for work ("the relevant day") which forms part of a period of incapacity for work.'
  36. I do not accept that that suggestion, or any of the others, is authorised by the authorities Mr Doris cited or by section 3. The reason is that that they go beyond what is permissible by way of interpretation. In all of the cases cited by Mr Doris, and all other cases of which I am aware, the courts have been scrupulously careful to honour the basic framework of the legislation and to find sufficient scope, if need be by stretching a point, to make it compatible with a particular Convention right. As the House of Lords put it in the Middleton case at paragraph 34:
  37. 'It is correct that the scheme enacted by and under the authority of Parliament should be respected save to the extent that a change of interpretation (authorised by section 3 of the Human Rights Act 1998) is required to honour the international obligations of the United Kingdom expressed in the Convention.'

    I accept that that involves an integration of, or reconciliation between, the values enshrined in the Convention and the scheme provided by the legislation. I also accept that the mere act of interpretation under section 3 involves a lack of respect for the language used by Parliament. However, disrespect for the language is not the same as disrespect for the scheme. The interpretations put forward do not respect the scheme enacted by Parliament. Their effect would be to abandon it in any case in which it resulted in a breach of European law. That is outside the permissible scope of section 3.

  38. My conclusion is also supported by Ghaidan v Godin-Mendoza [2004] 2 AC 557. Mr Ward drew my attention to what Lord Hope said at paragraph 110:
  39. 'however powerful the obligation in section 3(1) may be, it does not allow the courts to change the substance of a provision completely, to change a provision from one where Parliament says that x is to happen into one saying that x is not to happen. And, of course, in considering what constitutes the substance of the provision or provisions under consideration, it is necessary to have regard to their place in the overall scheme of the legislation as enacted by Parliament.'

    The contribution conditions in particular are central elements of the scheme of incapacity benefit, as it is described in section 20(1)(b) of the Social Security Contributions and Benefits Act 1992 as a contributory benefit. They are not, as I will mention later, essential elements, but they are sufficiently central that they cannot be remove by interpretation.

  40. My conclusion is supported by a broader structural consideration. I have to interpret the Human Rights Act 1998 as a whole. Section 3 provides for an interpretation that avoids any violation of a Convention right. However, the Act envisages that this may not be possible and section 4 provides for a declaration of incompatibility. As a Commissioner, I have no power to make such a declaration. Nor may I adopt a method of interpretation that either bypasses that limit on my jurisdiction or renders that procedure redundant for the courts to whom that power is allocated. However attractively Mr Doris presented his argument, what he was doing was removing a provision by interpretation in a way that would render redundant the statutory limits on the powers of courts and tribunals within the Human Rights Act 1998.
  41. II – European Community Law

    Equal treatment

  42. Mr Doris argued that there had been a violation of Article 4 of Council Directive 79/7/EEC:
  43. '1. The principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns:
    - the scope of the schemes and the conditions of access thereto,
    - the obligation to contribute and the calculation of contributions,
    - the calculations of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits.
    2. The principle of equal treatment shall be without prejudice to the provisions relating to the protection of women on the grounds of maternity.'

    Assigned gender

  44. Discrimination on the ground of assigned gender is sex discrimination. This has been held for the purposes of Directive 76/207: P v S and Cornwall County Council [1996] ECR I-2143. This reasoning was extended to Directive 79/7 by Richards v Secretary of State for Work and Pensions Case C-423/04, reported as R(P) 1/07. The issue there was discrimination in applying the pensionable age of 65 to someone whose registered gender was male but whose assigned gender was female. The European Court of Justice decided that it was discriminatory compared with the position of person whose registered gender was male and who had not undergone reassignment surgery.
  45. Analysis

  46. There is no dispute that the claimant is within the personal scope of the Directive and that incapacity benefit is within its material scope.
  47. In applying the Directive, I must focus on the decision that is under appeal. The claimant might have challenged the termination of his award of incapacity benefit in 2002 as being discriminatory on the ground of his sexual orientation, but he did not do so and it is now too late to bring an appeal. He might have made a new claim for incapacity benefit following his reassignment surgery and, if it was refused, argued that that was discriminatory on the ground of assigned gender. But he did not make a claim and so there could be no appeal. He could also have sought to make contributions and, if they were refused, he could have argued that this was discriminatory on the ground of sexual orientation or assigned gender. But he did not attempt to make contributions. All that he did was to make a claim for incapacity benefit once he had obtained his gender recognition certificate. If he is to succeed, he must show that there has been discrimination leading to the refusal of that claim.
  48. Mr Doris made a number of detailed submissions on the forms that the discrimination against the claimant might have taken. Mr Ward subjected them to perceptive criticism. I have decided that they do not assist the claimant because they are not sufficiently targeted on the decision under appeal and matters within my jurisdiction. However, after the hearing I put a different suggestion to the Secretary of State. As I have decided that there was discrimination on that basis, I will not deal with any other possibilities that were discussed at the hearing.
  49. At the oral hearing, Mr Ward and Mr Doris were agreed that the claimant should be compared with a person whose registered gender was male throughout. On my analysis, it does not matter how I define a comparator in this case, because people in the claimant's circumstances have been treated differently from everyone else. Let me explain.
  50. The legislation maintains a link between entitlement to incapacity benefit and pensionable age. A claimant who reaches pensionable age is no longer entitled to incapacity benefit: section 30A(2)(a) of the Social Security Contributions and Benefits Act 1992. This is qualified to take account of deferred pensions: section 30A(2)(b). The result is a link between the age when retirement pension becomes available to a claimant and the date when entitlement to incapacity benefit ceases. The link ensures continuity of entitlement. For convenience I will ignore deferred pensions.
  51. Persons who are incapable of work and whose legal gender remains male between the ages of 60 and 65 are entitled to incapacity benefit until the age of 65 and to a retirement pension thereafter.
  52. Persons who are incapable of work and whose legal gender remains female between the ages of 60 and 65 are entitled to incapacity benefit until the age of 60 and to a retirement pension thereafter.
  53. Persons who are incapable of work and whose legal gender changes from male to female between the ages of 60 and 65 are entitled to incapacity benefit until the change in their legal gender and to a retirement pension thereafter.
  54. Persons who are incapable of work and whose legal gender changes from female to male between the ages of 60 and 65 are entitled to incapacity benefit until the age of 60, then to a retirement pension until the change in their legal gender. Thereafter, depending on the time that has elapsed, they may be entitled to neither. That makes them unique in that the link between the loss of incapacity benefit and entitlement to a retirement pension is broken. And it is broken solely because of the change in legal gender between those ages. The claimant has not been treated equally with persons in the other categories because his legal gender changed as a result of having acquired an assigned gender. Unlike the persons in every other category, he is deprived of the opportunity of ensuring a continuity between entitlement to incapacity benefit and a retirement pension. (Failing to make appropriate and different provision can be discrimination under the European Convention – Thlimmenos v Greece (2001) 31 EHRR 15.)
  55. That effect is a direct result of the change in the claimant's legal gender and prohibited by the wording of Article 4(1). Alternatively, it is attributable to the acquisition of the claimant's acquisition of an assigned gender and is prohibited on the authority of Richards.
  56. Mr Ward and the Secretary of State's representative who responded to my direction after the hearing, argued that the claimant was treated exactly the same as a person whose legal gender had been male throughout. That is not correct. A person who had remained incapable of work throughout would have retained incapacity benefit. And a person who ceased to be incapable of work for a period would have been able to pay contributions in order to maintain potential entitlement to incapacity benefit.
  57. Remedy - interpretation

  58. Mr Doris argued that I was under a duty to interpret legislation in a way that was consistent with Direction 79/7. He cited Marleasing SA v La Comercial Internacional de Alimentacion SA Case C-106/89 [1990] ECR I-4135, where the European Court of Justice held at paragraph 8 that a national court was under a duty to interpret legislation 'as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter'. The British courts have acted in accordance with their duty. Lister v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546 is an illustration of the House of Lords doing just that. However, Lord Oliver emphasised at page 577 that the interpretation adopted was 'entirely consistent with the general scheme' of the legislation. And in Re Hartlebury Printers Ltd [1993] 1 All ER 470 at 478, Morritt J recited the interpretive duty, but added:
  59. 'But that must be achieved, if at all, by proper processes of construction, not so far as the court is concerned by the equivalent of legislation.'
  60. It is not necessary for me to decide to what extent, if at all, this interpretive duty differs from that under section 3(1) of the Human Rights Act 1998. They are certainly very similar and, as a matter of history, Lord Steyn said in Ghaidan v Godin-Mendoza [2004] 2 AC 557 that the statutory duty was based on the analogy of the duty in EC law (paragraph 45). It is sufficient for me to say that, for the purposes of this case and the interpretations suggested by Mr Doris, I can see no practical differences between my duties under section 3 of the Human Rights Act 1998 and under EC law. For the reasons that I have given above, I do not consider that the interpretations suggested are permissible even under the broad authority to be inventive that is authorised to ensure that domestic legislation complies with EC law.
  61. Remedy - disapplying the legislation

  62. Having failed to interpret the domestic legislation in a way that complies with EC law, I am under a duty to disapply it to the extent necessary to enforce the claimant's EC right: Amministrazione della Finanze dello Stato v Simmenthal SpA Case 106/77 [1978] ECR 629.
  63. The 2004 Act fails to comply with Article 4, because it deprives the claimant of the link between entitlement to incapacity benefit and a retirement pension. I can remove that discrimination by disapplying the legislation to the extent necessary in order to allow that link to be maintained in the circumstances of his case. For practical purposes, that result can be achieved by deciding the claim for incapacity benefit as if it was made the day that his entitlement previously ceased. The claimant must, of course, be incapable of work, but for other purposes the gap in entitlement is to be disregarded.
  64. I have considered three possible objections to the course I have taken.
  65. The first possible objection is that I have remedied a discrimination against the claimant by treating him more favourably than others. By giving him entitlement to a benefit without having to meet the conditions of entitlement to which others are subject, I have introduced a discrimination against the others. I do not consider that that is what I have done. I have put the claimant in the position he would have been in had it not been for the discrimination. The discrimination did not crystalise until he made his claim. That was inevitably after the time when he could have met the qualifying conditions.
  66. There is a further point on this possible objection. Although incapacity benefit is described as a contributory benefit, the link between contributions and entitlement can be weak or non-existent. The link can be weakened by crediting contributions and the use of linking periods. And in the case of incapacity in youth, the conditions do not apply at all: see section 30A(2A) of the 1992 Act. This consideration diminishes the strength of this possible objection.
  67. The second possible objection is that my remedy is not tailored to the discrimination I have identified. I identified a discrimination occurring on the change of legal gender. But the remedy operates from an earlier date. To put it another way, what I have actually done is to provide a remedy for a different discrimination. I do not see it that way. As I have said, the discrimination I have identified only crystalised on the change of legal gender, but it would be unrealistic to disregard what had gone before. And that is especially so as what went before may itself have been discrimination in respect of earlier decisions made on the claimant's entitlement. It is proper and permissible to take account of that background in defining the remedy.
  68. The third possible objection is that I have in reality decided an issue of contributions that is outside my jurisdiction and that I should have dealt with this case as Mr Commissioner Rowland did in R(IB) 5/04. I consider that that case is distinguishable. The failing in this case does not lie in the contribution conditions. It lies in their application to the claimant as an essential condition of entitlement to incapacity benefit.
  69. There may be other ways in which the discrimination could be removed. The law might, for example, allow the claimant to make up the gap in his contributions for the period from his 60th birthday. But I cannot take that approach. I am not sure that it could be done by disapplying provisions and would probably require legislation. In any event, it is outside my jurisdiction on this appeal, as it is a matter of contribution.
  70. The claimant must not, of course, benefit from payment of both incapacity benefit and retirement pension in respect of the same period. Any payments of retirement pension will be offset against, and treated as paid on account of, payments of incapacity benefit for any overlapping period: Case 2 in regulation 5(2) of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988. The result is that the claimant will only receive the amount by which his incapacity benefit exceeds the retirement pension he has been paid.
  71. The derogation

  72. Mr Doris argued that the case did not come within the derogation permitted by Article 7:
  73. '1. This directive shall be without prejudice to the right of Member States to exclude from its scope:
    (a) the determination of pensionable age for the purposes of granting old age and retirement pensions and the possible consequences thereof for other benefits'.
  74. I accept that argument. The purpose of the derogation is to allow a State to maintain the coherence of the social security system by retaining a link between pensionable age and other benefits. The discrimination that I have found in this case consists in breaking the link for the claimant and others in like circumstances. The approach which I have taken restores that coherence. That is outside the purpose of the derogation and, therefore, beyond its scope.
  75. A reference to the European Court of Justice?

  76. I raised the issue of whether I should refer preliminary questions to the European Court of Justice. Neither party was enthusiastic. Having considered the approach set out in paragraphs 51 and 52 of Trinity Mirror plc v Commissioners of Customs and Excise [2001] EWCA Civ 65, [2001] 2 CMLR 33, I have decided not to make a reference.
  77. Disposal

  78. The tribunal misunderstood European law and therefore came to the wrong decision. I allow the appeal and substitute the decision that the tribunal should have given.
  79. As there are other cases awaiting this decision, I have abridged the time within which the Secretary of State may apply to me for leave to appeal to the Court of Appeal.
  80. Signed on original
    on 19 November 2007
    Edward Jacobs
    Commissioner


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