The Supreme Court has today handed down judgment in the case of Secretary of State for Work and Pensions v. Gubeladze, an important case on the proportionality principle and EU law.

The case involved a challenge to a decision that Ms Gubeladze did not qualify for State Pension Credit. The decision was taken on the basis that Ms Gubeladze, a national of Latvia, had not properly registered her work in the United Kingdom under the Worker Registration Scheme (“WRS”), and so did not have a right to reside for the purposes of assessing her entitlement. The WRS was introduced for nationals of the 8 most populous of the 10 states which acceded to the EU in 2004. Ms Gubeladze challenged that decision on two bases: first, that she had retained a right of residence under Article 17 of the Citizens’ Directive (an exception to the conditions required for the acquisition of a permanent right of residence under Article 16); and, secondly, that the extension to the WRS in 2009 was disproportionate.

The first issue involved determining whether residence had to be “lawful” for the purposes of Article 17, or whether mere factual residence would suffice. The second issue involved determining the test of proportionality to be applied to the application of a provision in an international treaty (the Accession Treaty) permitting a derogation from free movement rights. Ms Gubeladze succeeded on both arguments before the Upper Tribunal. The Secretary of State’s appeal in the Court of Appeal succeeded on the first issue (legality of residence) but failed on the second (proportionality). Overall, therefore, the appeal was dismissed.

The Supreme Court has dismissed the Secretary of State’s appeal. The Court rejected the Secretary of State’s argument that the proportionality principle did not apply to the transitional provisions in the Treaty of Accession, holding that the Act of Accession had created relevant protectable interests by conferring rights of citizenship on the new EU citizens. Any derogation from those rights was subject to the proportionality principle. Although the Court accepted that in some respects both the Upper Tribunal and the Court of Appeal had erred in their approach to the proportionality assessment, it decided that there was no material error because both had been entitled to conclude that the limited benefits associated with extension of the WRS did not outweigh its detriments. The Supreme Court also accepted Ms Gubeladze’s argument that the Court of Appeal was wrong on the Article 17 issue. By reference primarily to the language of the Citizens Directive, the Court decided that “residence” under Article 17(1)(a) meant factual residence in a Member State, rather than “legal residence” as under Article 16.

David Blundell and Julia Smyth appeared as junior counsel to the Secretary of State for Work and Pensions, led by Martin Chamberlain QC. A link to the judgment can be found here.

Matthew Fraser has written an article which can be found here for LexisNexis which considers the implications of the judgment. The article was first published in LexisPSL on 24 June 2019.

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