GODNEY, WRIGHT AND EDWARDS v. THE UNITED KINGDOM

AS TO THE ADMISSIBILITY OF

Application No. 30291/96

by Kathleen GODNEY, Anthony George WRIGHT

and Varley Augustus EDWARDS

against the United Kingdom

The European Commission of Human Rights (First Chamber) sitting in private on 9 September 1998, the following members being present:

MMM.P. PELLONPÄÄ, President

N. BRATZA

E. BUSUTTIL

A. WEITZEL

C.L. ROZAKIS

MrsJ. LIDDY

MML. LOUCAIDES

B. MARXER

B. CONFORTI

I. BÉKÉS

G. RESS

A. PERENIČ

C. BÎRSAN

K. HERNDL

M. VILA AMIGÓ

MrsM. HION

MrR. NICOLINI

MrsM.F. BUQUICCHIO, Secretary to the Chamber

Having regard to Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 23 October 1995 by Kathleen GODNEY, Anthony George WRIGHT and Varley Augustus EDWARDS against the United Kingdom and registered on 26 February 1996 under file No. 30291/96;

 Having regard to:

-the reports provided for in Rule 47 of the Rules of Procedure of the Commission;

-  the observations submitted by the respondent Government on 11 July 1997 and the observations in reply submitted by the applicants on 2 December 1997;

Having deliberated;

Decides as follows:

THE FACTS

The applicants are three British citizens born in 1949, 1941 and 1935 respectively.  They reside in Grimsby, Derbyshire and Nottingham respectively.  Before the Commission, they are represented by Mr P. Sugden, a solicitor practising in Nottingham.

The facts of the case, as submitted by the parties, may be summarised as follows.

A.Particular circumstances of the case

The first applicant

The first applicant was employed by the Icelandic Freezing Plants Ltd. as a process worker.  In October 1991 she developed a pain first in her right and left arms successively.  She was repeatedly taken off work as sick by medical order, and since 9 June 1992 she had to be taken off work permanently.  Her injuries were described as follows:

"Discomfort in the lateral aspect of the right arm and the lateral aspect of the elbow of the left arm; discomfort in the flexor origins of both arms at the elbow and this was also associated with pain radiating into the fingers.  The [applicant]'s hand feels dead; she has pain in the left elbow in the medio-lateral aspect.  She has to take pain killers which make her feel sick.  She is unable to clean windows and experiences pain while ironing. She cannot enjoy gardening; her stepfather has to do this work for her.  She has difficulty performing household chores; she has pain if she lifts pots and pans and tries not to let it beat her.  She cannot lift heavy shopping.  She has had four injections in the right elbow and two in the left elbow.  The [applicant] therefore has a left and right tennis elbow; there are more symptoms in the right forearm due to radial tunnel syndrome.

The [applicant] is unable to work and not fit for highly repetitive employment. She is at a significant disadvantage in the labour market and is unlikely to gain employment should she lose her present job."

The applicant was paid statutory sick pay through her employer for the periods from 24 February to 30 March 1991 and from 6 April to 24 December 1992.  She further applied to the Department of Health and Social Security for invalidity benefit.  She received this benefit from 25 December 1992 to 1 September 1994.  Both payments constituted recoverable benefits under the Compensation Recovery Scheme ("the Scheme").  The subsequent certificate of total benefit specified that the benefits amounted to £7,328.81.

On 3 March 1994 the applicant issued proceedings for damages for personal injury against her employer.  By instituting this action, she sought to recover special damages, i.e. damages for loss of earnings and compensation for other quantifiable loss occasioned by her injury.  She further sought to recover general damages, to compensate for her pain and suffering, loss of amenity and earning capacity.  The schedule of special damages set out the total figure for past loss of earnings incurred at £3,276 and £2,381.40 for future loss.

 The applicant was advised by her solicitor that her entitlement to general damages for pain and suffering and loss of amenity lay about £3,500.

In reaction to her claim estimated to be worth at least £9,157.40 (calculated on the basis of the schedule for special damages and the solicitor's estimation of the general damages), the defendant's solicitors made an offer of settlement of £2,000.  This offer, discussed between the solicitors, was notified to the applicant by her solicitor's letter dated 23 May 1995.  The applicant was advised that:

"The final aspect of the matter to advise you on is in respect of benefits that you have received.

Any injury sustained after 1 January 1989 and compensation which is paid for that injury, any benefits that you have received needs to be repaid to the government, provided of course the settlement or award is exceeding £2,500.  I am enclosing a leaflet about this and I am also enclosing a copy of the letter from the Compensation Recovery Unit indicating the amount of benefits received up till October last year.  You will see there is £7,328.81 and by now those benefits will be higher, and therefore to win the case the award for compensation will have to exceed the amount of benefits you have received, and there is a great risk that, even if you win the case, the compensation would not exceed that sum and accordingly by the time any benefits are paid back to the Government you would not get anything at all.

You will see therefore, why the defendants have put to you an offer of £2,000.  It avoids having to pay back those benefits.  My advice is you should not fight the case to collect money for the government, and therefore I recommend to you that you accept this offer of £2,000."

The applicant accepted the offer.

The second applicant

The second applicant was employed by the Stanton plc.  On 27 November 1991 he had an accident at work.  His injuries were described as follows:

"The pain is over the right lower back.  Stiffness and aching wake him at night.  The leg twitches and he has pain over the outer aspect of the thigh, calf and foot.  Coughing and sneezing increases his pain.  He still has pins and needles in the right leg.  His foot feels dead.  He can walk on the flat but his symptoms increase on hills and his foot feels unsteady on uneven ground.  The right foot gives way, especially going down a kerb because of lack of feeling.  ...  He cannot run.  He can climb stairs only one at a time.  He sits with his weight off the right side.  He can manage only half an hour sitting with constant shuffling. He can stand for half an hour.  He can wash up at the sink for 15 minutes. ... From the medical testament, ... [the applicant] has suffered a prolapsed intervertebral disc with nerve root entrapment ...  [He] is most unlikely to return to any work except the lightest work, perhaps in a store. ... There is a risk of degenerative arthritis as a result of this injury."

 After the accident, the applicant was paid statutory sick pay through his employer for the period from 28 November 1991 to 4 June 1992.  He further applied to the Department of Health and Social Security for invalidity benefit and industrial injuries disablement benefit.  He received invalidity benefit from 12 June 1992 to 10 January 1995 and industrial injuries disablement benefit from 11 March 1992 to 11 January 1995.  These payments constituted recoverable benefits under the Compensation Recovery Scheme.  The subsequent certificate of total benefit specified that the benefits amounted to £17,651.03.

On 23 February 1994 the applicant issued proceedings for damages for personal injury against his employer.  He attached to his claims a schedule of special damages, i.e. damages for loss of earnings and compensation for other quantifiable loss occasioned by the accident which amounted to £19,468.80 for past loss and £194.40 per week for continuing loss.  By instituting this action, the applicant further sought to recover general damages, to compensate for his pain and suffering, loss of amenity and loss of earning capacity.

On 6 March 1995, solicitors for the defendant offered a settlement of £12,000 plus refund of all the benefits to be recouped by the Compensation Recovery Unit.  This offer was reinforced by a notice of payment into court of 24 March 1995, reiterating the terms of this offer.  On 29 March 1995, the applicant accepted the offer.

The third applicant

The third applicant was employed as a machine operative by the same employer as the second applicant.  On 19 September 1989 he had an accident at work.  His injuries were described as follows:

"The [applicant] ... suffered a torsion injury to his left shoulder. Analgesics and ultrasonic therapy were prescribed. A full thickness rotator cuff tear has been diagnosed. His shoulder is stiff and painful. Lifting, stretching and working at and above head height are difficult. He is awaiting surgery. ... He will be handicapped on the open labour market."

After the accident, the applicant was paid statutory sick pay through his employer for the period from 25 February to 17 June 1992. He further applied to the Department of Health and Social Security for invalidity benefit and industrial injuries disablement benefit.  He received invalidity benefit from 18 June 1992 to 15 September 1994 and industrial injuries disablement benefit from 30 October 1991 to 14 September 1994.  These payments constituted recoverable benefits under the Compensation Recovery Scheme.  The subsequent certificate of total benefit specified that the benefits amounted to £17,931.28.

On 13 August 1992, the applicant issued proceedings for damages for personal injury against his employer.  He further served a schedule of special damages, i.e. damages for loss of earnings and compensation for other quantifiable loss occasioned by the accident, amounting to £18,788.30 for past loss incurred and £84,966.96 for future loss.  The applicant further sought to recover general damages, to compensate for his pain and suffering, loss of amenity and loss of earning capacity.

 By notice of payment into court of 11 August 1994 and notice of further payment into court of 17 March 1995, the solicitors for the defendant offered the applicant a sum of £20,000 plus the sum due to be recouped by the Compensation Recovery Unit, i.e. £17,931.28.  The applicant accepted the offer.

B.Relevant domestic law and practice

The social security benefits in issue

Where a person is injured or incapacitated by accident or disease, that person may be entitled to receive certain social security benefits from the public purse.  The social security benefits relevant to the present case were statutory sick pay, invalidity benefit and industrial injuries disablement benefit.

Statutory sick pay and invalidity benefit, received by all three applicants, are contributory benefits intended to provide a measure of earnings replacement whilst a person is unable to work due to incapacity.

Statutory sick pay is an income-replacement benefit paid by employers to employees through their normal pay channels.  To be eligible for it an employee must have had average earnings during the eight weeks before the start of his sickness which were at least as high as the lower earnings limit for the payment of National Insurance contributions.  During the relevant period, statutory sick pay was paid at a single rate, and employers were able to recover a percentage of their statutory sick pay from the State.  After an employee had received statutory sick pay for 168 days (24 weeks) within a period of interruption of employment, he was deemed to have met the requirements for entitlement to invalidity benefit.

Invalidity benefit is an earnings replacement benefit, which is paid at a basic personal rate.  It became payable after statutory sick pay or sickness benefit has been received for 168 days (24 weeks) and can then be paid indefinitely.

Industrial injuries disablement benefit, received by the second and third applicants, is the main benefit under an industrial injuries scheme which provides non-contributory, no-fault benefits for disablement caused by accidents at work or by one of the listed prescribed industrial diseases.  It only covers employed persons, and members of the armed forces; the self-employed are excluded.  Industrial injuries benefits are payable on top of other sickness and invalidity benefits, but they are taken into account as an income in calculating entitlement to income-related benefits.  They are tax-free, and can be paid to people who are working irrespective of their earnings.  Industrial injuries disablement benefit is paid weekly after 90 days (15 weeks) from the date of the industrial accident or the onset of the prescribed disease.  The rate depends upon the degree of disablement suffered, which is assessed at a percentage level of disability.  During the relevant period, industrial injuries disablement benefit was subject to a minimum threshold of 14% disablement, except in relation to certain respiratory diseases.  It is not an income-replacement benefit, nor one to meet specific expenses, but a compensation for a non-pecuniary loss, directly linked to the degree of disablement arising from the work injury.

 The Compensation Recovery Scheme

The Compensation Recovery Scheme ("the Scheme") was introduced by the Social Security Act 1989 and subsequently consolidated in the Social Security Administration Act 1992 ("the 1992 Act").  The 1992 Act received Royal Assent on 21 July 1989, and under transitional arrangements it applied only to compensation payments made on or after 3 September 1990 (the date of the coming into force of Section 22 of the Social Security Act 1989) where, in injury cases, the injury had been sustained on or after 1 January 1989, or a disease, if the victim's first claim for a relevant benefit in consequence of the disease is made on or after that date (Section 81(7) of the 1992 Act).

The Scheme was based upon the principles that negligent parties should not have any of their liabilities met through the social security system and accident victims should not be compensated twice.  The Scheme operated on the general principle that when a negligent wrongdoer or "compensator" made a payment of compensation to an injured person, that person was required to repay to the Compensation Recovery Unit an amount equivalent to any sums already paid by way of prescribed social security benefits which were claimed and received in consequence of that injury.  That sum was, in practice, paid directly to the Compensation Recovery Unit by the compensator.  The prescribed benefits which were recoverable included the three benefits relevant to the present application.  The Scheme applied whether or not liability had been admitted, and whether following an award of damages by a court or an out-of-court settlement.  The injured person must have been given formal notification of the amount deducted by the compensator in a certificate of total benefit.

However, the principle of recoupment was subject to certain modifications.  Only sums actually paid up to the date of an award/settlement or for five years, whichever period was the lesser, were recouped (Section 81(1) of the 1992 Act).  No future entitlement to benefits was taken into account.  Compensation was not recouped where the settlement was £2,500 or less ("the small payment limit"), or where an injured person received payment under a private insurance policy which he had purchased (Sections 81(3) and 85 of the 1992 Act).  The Scheme includes an appeal mechanism, under which an individual could challenge the amount, rate, period or benefits specified in his certificate of total benefit (Section 98 of the 1992 Act).

Section 93(2)(a) of the 1992 Act provided that "where a party to an action makes a payment into court which, had it been paid directly to the other party, would have constituted a compensation payment, the making of that payment shall be regarded for the purposes to this Part of this Act as the making of a compensation payment, but the compensator may withhold from the payment into court an amount equal to the relevant deduction".

The Scheme was reformed by the Social Security (Recovery of Benefits) Bill which received Royal Assent in March 1997 and which came into force in October 1997.  The basic principles remained unchanged, but the compensator became liable for all recoverable benefits and is able to off-set this liability against compensation otherwise payable to the injured party of a "like-for-like" basis.  Compensation for pain and suffering is, therefore, protected. Moreover, the small payments limit has been discontinued.

COMPLAINTS

The applicants allege a violation of Article 1 of Protocol No. 1 to the Convention, Article 6 para. 1 and Article 14 of the Convention.

Under Article 1 of Protocol No. 1 to the Convention, the applicants complain that they have been deprived of the fruits of their National Insurance contributions.  They have also been deprived of the recovery of damages they received or should have received to compensate them for the personal pain and suffering and loss of amenity.  They have been deprived of property, bringing into play the requirements of "fair balance" and proportionality.  The applicants also contend that by the recoupment, they have been deprived of the benefits that the State had "contracted" to pay them under the National Insurance scheme.  Payment of insurance contributions give rise to a sufficiently established claim when the incident insured against materialises.  Recoupment under the Compensation Recovery Scheme had the consequence that the respondent took away all the financial benefit from the applicants from the National Insurance contributions they had paid over the years.  The applicants consider that the application and effect of the Scheme upon them was disproportionate to the aim it pursued.

With regard to Article 14 of the Convention read in conjunction with Article 1 of Protocol No. 1 to the Convention, the applicants claim that the operation of the Scheme constituted unjustified discrimination against them.  They claim that the Scheme draws a distinction between persons who receive awards of less than £2,500 (who do not face recoupment) and persons, the second and third applicants in the present case, who receive higher awards.  Even if a lower threshold can be objectively justified on grounds of administrative convenience, it is impossible to justify depriving the applicants of a very substantial part of their settlements while those suffering lesser injuries are left to recover the damages they are entitled to in full.  They argue that they have suffered discrimination compared with persons who suffered lesser injuries.

In the applicants' view, both national and private insurance schemes involve the payment of contributions by the assured to protect them in the event of claim; the fact that the State administers the National Insurance scheme and has no financial responsibility for private schemes does not, in principle, affect the comparability of the schemes and cannot justify the utterly different treatment given under the Scheme and national law.

The third applicant also claims that the retrospective application of the Scheme to accidents, such as the one he suffered before the Scheme entered into force, aggravates the injustice suffered by him.

Under Article 6 para. 1 of the Convention, read alone or in conjunction with Article 14 of the Convention, the applicants argue that the Scheme gravely interfered with their ability to pursue their actions for damages for personal injury before the courts.  Their ability to litigate their claims has been distorted by provisions of the Scheme that sums under £2,500 will not be seized whilst the entirety of any payment, as long as it is more than £2,500, will be.  Accordingly, the Scheme removed from the applicants the ability to secure any personal benefit from a successful claim for their civil rights.

PROCEEDINGS BEFORE THE COMMISSION

The application was introduced on 23 October 1995 and registered on 26 February 1996.

On 9 April 1997 the Commission decided to communicate the application.

The Government's written observations were submitted on 11 July 1997.  The applicants replied on 2 December 1997, after two extensions of the time-limit fixed for that purpose. 

On 9 December 1997 the Commission granted the third applicant legal aid.  It also decided not to grant legal aid to the first applicant.

THE LAW

The applicants complain that the application of the Scheme breached their rights guaranteed by Article 1 of Protocol No. 1 to the Convention and Article 6 para. 1 of the Convention read alone or in conjunction with Article 14 of the Convention.

1.The Government first argue that the applications of the second and third applicants were introduced more than six months after the date of the relevant final decision in their respective cases, and are therefore  inadmissible under Article 26 of the Convention.  The Government emphasise that the applications made by these applicants were introduced on 23 October 1995.  They note that the second applicant accepted a payment into court in settlement of his claim on 29 March 1995 and recoupment therefore took place on that date.  As to the third applicant, he accepted a payment into court in settlement of his claim on or about 17 March 1995.  The Government submit that the letter of 1 June 1995 sent by the Department of Social Security in answer to the applicants' representative's letter of appeal dated 23 May 1995 on behalf of another client, Mr B., was not concerned with the cases of the second and third applicants and cannot be taken as the date of a final decision in their cases.

The applicants contest the Government's view.  They claim that they formed part of a wider group of victims of the system represented by the same solicitor.  Another such victim was Mr B. whose case was finally determined before their settlements.  They submit that in order to seek to pursue all "adequate and effective" domestic remedies the applicants' representatives wrote to the Compensation Recovery Unit on behalf of Mr B. seeking to appeal the recovery of benefits from him and any possible deprivation of property caused thereby to the social security appeal tribunal according to Section 98 of the Social Security Administration Act 1992.  This letter expressly sought to ascertain whether there was an appeal before the Independent Tribunal Service.   The letter read as follows:

"Following our letter to you of 24 April, it is necessary ... to put to you that the recovery of £57,533.61 value from our client is incorrect and that accordingly that sum should be returned to him.  We anticipate that this letter, which amounts to an appeal against the decision to recover this sum of money, needs to be dealt with probably by way of a Tribunal and then taken to Europe. ... Accordingly therefore if there is to be such an appeal for hearing before the Independent Tribunal Service, no doubt you will tell us so that representation can be advised on behalf of our client."

 The applicants submit that it was only through the letter dated 1 June 1995 from the Department of Social Security that it became clear that any appeal on such grounds would not be within the jurisdiction of the tribunal and that there was, therefore, no further adequate or effective remedy to be pursued by Mr B. and, consequently, by the applicants.  Once the position had been clarified, to the applicants' knowledge, Article 26 of the Convention did not require them to have written a further letter to the Compensation Recovery Unit seeking to appeal, purely in order to be told in a letter bearing their names that there was no jurisdiction.

The letter of 1 June 1995 stated inter alia:

"Your letter of 23 [May 1995] to the Compensation Recovery Unit has been passed to me for reply.

In my opinion the grounds for challenge are unarguable but that is a matter for the Commission in Strasbourg.

As you know the grounds of appeal are restricted.  They do not include any ground even remotely approaching those on which you rely.  Accordingly, I have advised the CRU that any appeal on such grounds would not be within the jurisdiction of the Tribunal and that it would not have to be forwarded to the Tribunal.

Again, it is only my opinion but the rule of law embodied in the ECHR that domestic remedies must be exhausted is subject to a proviso well established by case law.  This holds that there is no need to exhaust a remedy that will be in vain eg because the challenge is to an underlying rule of law."

The Commission recalls that, pursuant to Article 26 of the Convention, it "may only deal with the matter ... within a period of six months from the date on which the final decision was taken".

The Commission considers that even assuming that such correspondence could, in principle, affect the running of the six months' time limit prescribed by Article 26 in fine of the Convention, the letter written by the second and third applicants' representatives on behalf of another client could not have done so in the present case.

The Commission notes that Section 98 of the Social Security Administration Act 1992 provides for the appeal mechanism specifying that the appeal can be lodged against "any certificate of total benefit at the instance of the compensator, the victim or the intended recipient on the ground (a) that any amount, rate or period specified in the certificate is incorrect, or (b) that benefit paid or payable otherwise than in consequence of the accident, injury or disease in question has been brought into account".

The Commission considers that from these provisions it was quite clear that no appeal was available on the grounds which the applicants' representatives' relied on in the appeal of their client, Mr B., i.e. an appeal against the decision to recover the benefits paid to him in the relevant period.  In these circumstances, the letter of 1 June 1995 written by the Department of Social Security and sent to the applicants' representatives  only confirmed  what had been set down in the law.  Accordingly, the final decisions in the cases of the second and third applicants were their respective acceptances of the payments into court in settlement of their claims of 29 and 17 March 1995.

It follows that the applications of the second and third applicants were introduced out of time and must be rejected under Article 27 para. 3 of the Convention.

2.As to the first applicant, the Government contend that she was not directly affected by the operation of the Scheme and cannot, therefore,  claim to be a victim within the meaning of Article 25 of the Convention.  They submit that she accepted a voluntary settlement of £2,000 in satisfaction of her claim.  Since this sum was below the small payments limits provided for under the Social Security Administration Act 1992, no recoupment was made of social security benefits which she had received as a consequence of her injury.  The Government emphasise that the fact that the existence of the Scheme may have influenced the first applicant's decision to settle her claim at a particular level cannot be sufficient to ground her claim to be a victim of a violation of one of the rights guaranteed by the Convention.  The Government further submit that there was no interference with, deprivation of or control of the use of her possessions.

The first applicant submits that her application leaves no doubt that she was in fact directly affected and prejudiced by the Scheme.  She refers to her solicitor's letter which makes it clear that she had the choice between (a) accepting an offer of £2,000 and keeping this sum by reason of the small claims exemption under the Scheme; or (b) pursuing the litigation further at a point in time where even if she had recovered the full damages claimed she would have been left with damages amounting to less than £2,000 after recoupment and where there was a substantial likelihood that she may not retain any damages at all.  The applicant maintains that her position is similar to that of the applicant in Inze v. Austria case (see Eur. Court HR, judgment of 28 October 1987, Series A no. 126), where the European Court rejected the Government's submission that the Commission had erred in finding the applicant, who had accepted a financial settlement, a victim.  Like her, the applicant in the Inze case was in a position of inferiority, and accepted the settlement as the lesser of two evils (loc. cit., p. 16, para. 33).

The Commission recalls that under Article 25 para. 1 of the Convention, it may receive petitions from any person claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in this Convention.  The answer to the question whether an applicant can claim to be a victim of a violation of the Convention depends largely on the legal interests which the applicant has in a determination of his or her allegations of Convention breaches (see No. 9320/81, Dec. 15.3.84, D.R. 36, p. 24).

The Commission notes that Section 81(3)(a) to (j) of the 1992 Act excluded certain payments from the application of the Scheme, inter alia small payments, currently up to and including £2,500.

The first applicant pursued this option by accepting the offer of £2,000 made by the defendant and was not, therefore, required to refund all the benefits to be recouped by the Compensation Recovery Unit in operation of the Scheme.  The Commission considers that even though the Scheme did not operate directly in the first applicant's case, the potential risk for her that the Scheme would operate in her case if she did not settle her claim at this particular level was certainly one important element in her decision to accept the settlement.  In these circumstances the Commission considers that the first applicant can claim to be a victim within the meaning of Article 25 para. 1 of the Convention.

It follows that the Government's objection on this point must be rejected.

The Commission must then consider whether the Scheme affected the first applicant's "possessions" within the meaning of Article 1 of Protocol No. 1 to the Convention.

The Commission first considers that even assuming that the social security benefits can constitute "possessions" under Article 1 of Protocol No. 1 to the Convention, the first applicant received and retained those benefits during the relevant period and she has never been required to repay them.

As to the question whether a claim for damages in tort for personal injury is capable of constituting a "possession" within the meaning of this provision, the Commission recalls that in the judgment in the Pressos case (see Eur. Court HR, Pressos Compania Naviera S.A. and Others v. Belgium judgment of 20 November 1995, Series A no. 332) the European Court held that the applicants' claims for damages in tort, which under Belgian law came into existence when the damage occurred, "constituted an asset" and therefore "amounted to a possession within the first sentence of Article 1", even though none of the claims had been recognised and determined by a judicial decision having final effect.  The Court further observed that on the basis of the judgments of the Court of Cassation in which the Court of Cassation had recognised that the State and other public-law bodies were subject to the general law of tort, "the applicants" could argue that they had a 'legitimate expectation' that their claims deriving from the accidents in question would be determined in accordance with the general law in tort" (loc. cit., pp. 16 and 21, paras. 17 and 31).

However, in the present case, when the first applicant introduced her claim for damages against the company for which she had been working at the time of her accident, she claimed that the injury was sustained as a result of the company's negligence but was yet to prove the company's liability.  It was in the course of the proceedings that the liability of the company should have been established and, if relevant, an award of damages assessed.  Had the liability of the company not been established by the court or admitted (even partially) by the company, the applicant would not have been entitled to receive any award of damages.  Accordingly, the Commission considers that the first applicant's claim for damages was not sufficiently established to amount to a "possession" within the meaning of Article 1 of Protocol No. 1 to the Convention, notwithstanding its pecuniary aspect.

The Commission therefore finds, like the Government, that it is only the proceeds of the settlement which can constitute a "possession" within the meaning of Article 1 of Protocol No. 1 to the Convention.

In the present case, the applicant accepted the settlement of her claim for damages of £2,000 out of which any deduction under the Scheme was not made.  In these circumstances, the Commission considers that the Scheme did not interfere with the first applicant's peaceful enjoyment of her "possessions" under Article 1 of Protocol No. 1 to the Convention.

It follows that this part of the application of the first applicant must be rejected as being manifestly ill-founded within the meaning of Article 27 para. 2 of the Convention.

3.The first applicant claims that the different treatment afforded to social security benefits and to payments received under contracts of private insurance amounts to discrimination under Article 14 of the Convention read in conjunction with Article 1 of Protocol No. 1 to the Convention.

The Government submit in this respect that the first applicant's status as a person who had not purchased private accident or long-term disability insurance, and who was therefore solely reliant upon the social security benefits provided by the State, does not constitute a relevant criterion under Article 14 of the Convention.  Persons who have paid for voluntary private insurance and persons who have made compulsory National Insurance contributions are not relevantly similar classes for the purposes of this Article.  They add that any different treatment of relevantly similar groups is objectively justified.  The Government state that the National Insurance scheme is based upon compulsory funding, whilst private insurance is voluntary and any payments made under such a contract are a reward for thrift.  Furthermore, it is almost invariably the case that a private insurer will ensure that an insured person does not benefit from double recovery.  Under national law, if an insurer makes a payment under a private indemnity insurance policy, he stands in the shoes of a policyholder.  If the insurer subsequently finds that the policyholder has recovered the loss from another source, the insurer can then take action to recover his outlay from the policyholder.

The first applicant maintains that though the terms of private insurance are not under the control of the Government, the latter is responsible both for the supervision of the insurance industry and the maintenance and justice of the civil justice system under which private insurance receipts cannot be taken into account when determining damages in tort.  She notes that the description of the working of the National Insurance scheme in the Government's observations corresponds almost exactly to the working of private insurance schemes against loss of earnings etc.  No "personalised" funds are created but the insurance premiums collected at any time are used to pay to insured persons where the insured risk has materialised.  If during the life-time of the insurance policy the insured risk does not occur, the insured individual - just as under the National Insurance scheme - will not be entitled to any payment.  This principle also applies to such insurances as health insurance and/or pensions - if the insured risk does not materialise no entitlement to payment arises.  The applicant concludes that it is appropriate to compare her situation with that of a person covered by private insurance for the purposes of Article 14 of the Convention in relation to the interference with and/or deprivation of the property of the applicant, in particular in form of any award for general damages and future loss of earnings.  The applicant adds that private insurers will generally not be entitled to recover their insurance payments out of an insured's general damages but will ensure that any sum paid out is recovered by appropriate claims under special damages.

The Commission has found that the first applicant's complaints fall within the ambit of Article 1 of Protocol No. 1 to the Convention.  Article 14 of the Convention is therefore applicable.

 The Commission recalls that Article 14 of the Convention affords protection against discrimination, that is treating differently, without an objective and reasonable justification, persons in "relevantly" similar situations (see, for example, Eur. Court HR, Fredin v. Sweden judgment (No. 1) of 18 February 1991, Series A no. 192, p. 19,

para. 60).

The Commission finds that the comparison between a person covered by national insurance and a person who has private insurance contract is a comparison of two different factual situations, since private insurance is a matter which does not concern the State in any respect (see above-mentioned Kightley case) and as such discloses no discrimination under Article 14 of the Convention.

The applicant also bases her allegations of discriminatory treatment on the fact that persons whose claims for damages fell below the small payments limit of £2,500 did not face recoupment.

The Government submit that the small payments limit was introduced in order to avoid disproportionate costs and complexity in recovery in small cases.  Their existence turned out in practice, however, to distort the proper functioning of the Scheme by pushing down the level of some settlements.  The Government add that the small payments limits are not to be retained under the new scheme which came into force in October 1997.

The Commission notes that the first applicant did not limit her original claim, as she was entitled to do, to the sum of £2,500, with the consequence that any sum awarded would have been received free of the recoupment of the value of the benefits paid to her.  Instead, she chose to claim sums substantially in excess of this figure in the knowledge that the value of such benefits would be recouped out of any sum awarded.  However, as noted above, she chose to accept the sum of £2,000 offered by the defendant in settlement of her claim, which, having been below £2,500, was not submitted to any recoupment under the Scheme.  The applicant was therefore in the same position as a person whose claim for damages fell below the small payments limit.  In these circumstances, the Commission finds that the first applicant was not subjected to treatment of a discriminatory nature in violation of Article 14 of the Convention read with Article 1 of Protocol No. 1 to the Convention.

It follows that this part of the application of the first applicant is also manifestly ill-founded within the meaning of Article 27 para. 2 of the Convention.

4.The first applicant further argues, under Article 6 para. 1 of the Convention, read alone or in conjunction with Article 14 of the Convention, that the Scheme gravely interfered with her ability to pursue her action for damages for personal injury before the court.

Article 6 para. 1 of the Convention, insofar as relevant, provides as follows:

"In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law ..."

 The Government submit that the applicant was free to and did invoke her right to bring a claim for damages before the national court in respect of the injury which she had suffered.  She was legally represented throughout those proceedings, and was freely able to choose whether to pursue her claim to judgment or whether to accept a payment in settlement at an earlier stage.  The Government note that the applicant, who chose to accept a voluntary settlement, did so in full knowledge of the existence and effect of the Compensation Recovery Scheme, and having taken legal advice.  Her allegation that she was de facto prevented from continuing the prosecution of her claim for damages, or that the essence of her litigation right was impaired, is, in the Government's view, without foundation.  For the rest, the Government rely upon the Commission's reasoning in the relevant part of the Kightley case (No. 28778/95, Dec. 7.4.97, unpublished).

The applicant submits that any offer of settlement by way of payment into court puts a plaintiff in the difficult position of deciding whether to accept such payment and have all her reasonable costs of the action paid, or to refuse such payment into court and, if the final award does not exceed this payment, to pay her own and the defendant's reasonable costs as from the date of the payment into court.  Moreover, where the plaintiff is legally aided and refuses to accept an offer of settlement that he or she is advised by his solicitor and/or counsel is reasonable, such legal aid may be withdrawn.  The applicant states that the combined effect of the Scheme and Rules of Court and/or legal aid provisions and/or the £2,500 threshold was such that she was in fact, if not in law, prevented from pursuing her claim for damages in tort through the courts.

The Commission recalls that Article 6 para. 1 of the Convention embodies the "right to a court", of which the right of access, that is, the right to institute proceedings before a court in civil matters, constitutes one aspect.  However, this right is not absolute, but may be subject to limitations; these are permitted by implication since the right of access by its very nature calls for regulation by the State. In this respect, the Contracting States enjoy a certain margin of appreciation, although the final decision as to the observance of the Convention’s requirements rests with the organs of the Convention.  It must be satisfied that the limitations applied do not restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6 para. 1 of the Convention if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved (see Eur. Court HR, Stubbings and Others v. the United Kingdom judgment of 22 October 1996, Reports of Judgments and Decisions 1996-IV, p. 1502, para. 50).

The Commission observes that the first applicant was able to bring her claim for damages before the national court.  She accepted the defendant's offer of settlement of £2,000 upon her solicitors' advice as to the prospects of success of her claim and upon their information about the amount to be recouped under the Scheme as a result of the benefits already paid to her.  The Commission considers that the essence of the applicant's right of access to a court was not impaired.  Insofar as this right was inhibited by the provisions of the domestic law, the Commission does not consider that such an inhibition failed to pursue a legitimate aim of the avoidance of double recovery by the claimant and the shifting of the burden from the taxpayer to the compensating wrongdoer, or that it was disproportionate.

The Commission adds that the applicant's submissions do not raise any further relevant issue under Article 14 of the Convention.

It follows that this part of the application of the first applicant is manifestly ill-founded within the meaning of Article 27 para. 2 of the Convention.

For these reasons, the Commission, unanimously,

DECLARES THE APPLICATION INADMISSIBLE.

M.F. BUQUICCHIO   M.P. PELLONPÄÄ

     SecretaryPresident

to the First Chamberof the First Chamber

 

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