Judgment;Summary — ECLI:EU:C:2021:907
Date: 2021-11-11
Language of the case: English
Court formation: Third Chamber
Subject matter: Citizenship of the Union;Right of establishment;Principles, objectives and tasks of the Treaties;Freedom to provide services;Free movement of workers
Procedure: Reference for a preliminary ruling
Origin: United Kingdom

summary of the arguments of the parties 
 
54. The overall submission made on behalf of Mr M is that as a matter of EU law his rights 
should not depend on whether he had spent his working life in the UK (and had acquired 
pension rights in a UK registered pension scheme) or was a migrant worker  who had spent 
most of his working life in another Member State such as Ireland, and whose associated 
pensions rights were likely to be in a scheme based in that Member State (“the home State 
scheme”), and had then moved to the UK before becoming bankrupt. Mr M’s position is 
that the same principles apply to the self-employed.  
 
 
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55. The key problem was that unless the migrant’s home State scheme happened to be 
registered with HMRC in the UK (something that may not be under his control, but a 
matter for his employer (in the case of a worker) or in any event the administrator of the 
scheme, and which would not generally or necessarily give rise to any tax or other 
advantage for the scheme and which was also likely to generate an additional regulatory 
burden for the scheme in that the scheme would then have to comply with UK regulations 
as well as home state regulations), a literal reading of section 11 WRPA 1999 would mean 
that he would not receive the same protection for his pension rights on bankruptcy as a UK 
worker or self-employed person (whose pension scheme would be registered in the UK in 
order to obtain the tax advantages in the UK that accrue to registered pension schemes). 
 
56. That meant that the Court was obliged to “read down” section 11 WRPA 1999 so as to 
give it a conforming interpretation with EU law so that the Scheme was to be regarded as 
an approved pension arrangement, with the result that Mr M’s rights under the Scheme 
were excluded from his bankruptcy estate. 
 
57. The submissions for the Joint Trustees can be summarised as follows. The provisions 
applicable on personal insolvency differ from one Member State to another.  That much is 
recognised in Council Regulation 1346/2000 on insolvency proceedings (“the 2000 
Insolvency Regulations”).  The UK provisions on the protection of pension rights in 
bankruptcy are just part of the overall UK insolvency regime. The question is whether they 
constitute a restriction on freedom of movement, and in particular (since reliance is placed 
on Art 49 TFEU) the right of establishment. They plainly did not in fact deter Mr M from 
relocating to the UK in exercise of the right of establishment. Nor can it be said that they 
were likely to do so: that could only be done if it could be shown that the UK insolvency 
regime as a whole was less favourable to the bankrupt than (in this case) the Irish 
insolvency regime, and no attempt had been made to do that. Mr M could not pick and 
choose the bits of the UK insolvency regime he liked and challenge the bits he did not like. 
Even if that was wrong, and it was appropriate to look at the UK provisions on pension 
rights in bankruptcy by themselves, they did not constitute an obstacle or restriction to the 
freedom of establishment; nor had it been shown that they were less favourable to Mr M 
than the Irish provisions on pension rights in bankruptcy.  There was therefore no basis for 
contending that s.11 WRPA 1999 breached Article 49 TFEU. Further, in so far as Mr M 
relied on Article 24 CRD, Article 21 TFEU makes clear that it takes effect “subject to the 
 
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limitations and conditions laid down in the Treaties and the measures adopted to give them 
effect”. Such measures include the 2000 Regulation which recognises that the provisions 
on insolvency will, in the absence of harmonisation at EU level, differ as between the 
Member States.    
 
58. It was further submitted on behalf of the Joint Trustees that to afford Mr M the protection 
of his pension rights would be to put Mr M in a better position than UK nationals who – 
in order to obtain this protection would have had to register their scheme under s 153 FA 
2004 and comply with the conditions for registration. 
 
E. The questions referred for a ruling 
 
59. The Referring Court therefore refers the following Questions to the Court of Justice for a 
preliminary ruling under Article 86 of the Withdrawal Agreement and Article 267 TFEU:- 
 
(1) Where a national of a Member State has exercised his rights under 
Articles 21, 49 TFEU and the Citizens’ Rights Directive (Parliament 
and Council Directive 2004/38/EC) by moving to or establishing 
himself in the United Kingdom, is it compatible with those 
provisions for section 11 WRPA 1999 to make exclusion from 
bankruptcy of pension rights in a pension scheme, including those  
established and tax approved in another Member State, dependent 
on the pension scheme being, at the time of the bankruptcy, 
registered under s 153 FA 2004 or prescribed by regulation 2 of the 
2002 Regulations and thus tax approved in the United Kingdom ? 
 
(2)  In answering Question (1), is it relevant or necessary: 
 
(a) to determine whether the individual moved to the United 
Kingdom in order, primarily, to declare his bankruptcy in the 
United Kingdom? 
 
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(b) to take into account (i) the protections which may be available 
to the bankrupt in respect of unapproved pension schemes 
under s 12 WRPA 1999 and (ii) the possibility for the trustees in 
bankruptcy to recover sums in respect of approved pension 
arrangements? 
(c) to take into account the requirements to which pension schemes 
registered and tax approved in the United Kingdom are subject? 
 
 
F. View of the Referring Court on the answer to be given to the questions referred for a 
preliminary ruling  
 
60. The provisional view of the Referring Court is that the impact of insolvency on the accrued 
pension rights of a person exercising the right of establishment as a self-employed person 
in another Member State is sufficiently closely connected with that activity (even if, as in 
this case, the insolvency does not arise from that activity but from previous activities in 
his home state) to be within the scope of Art 49 TFEU. 
 
61. In the view of the Referring Court, if that is right, then it follows that there has not been 
equal treatment. A UK national who becomes bankrupt is very likely to find, even if he 
takes no particular steps in this regard, that his accrued pension rights are protected on 
bankruptcy by the operation of s. 11 WRPA 1999, because the vast majority of pension 
rights in the UK are held under pension schemes registered with HMRC under s. 153 FA 
2004 because of the tax advantages that can be thereby secured. Nationals of other EU 
Member States are far more likely to have accrued pension rights in schemes that are not 
registered. 
 
62. It was argued on behalf of the Joint Trustees that whatever the position with employees, 
for a self-employed person to comply with the requirements of the 2006 Regulations and 
register their overseas pension scheme as a qualifying overseas pension scheme was not 
an onerous administrative requirement. It is accepted that it is likely that Mr M could in 
fact have asked the trustees of the Scheme to do this and that it would not have been 
difficult for them to do so, nor is there any particular reason to think that the trustees would 
have refused. It is to be inferred that the reason that this was not done was not because it 
 
 
 
 
 
 
 
was difficult or onerous, but because by the time he established himself in the UK it was 
thought that he had drawn all his benefits from the Scheme anyway so there was no need 
to take any further steps. But one cannot assume that those moving to the UK to establish 
themselves as self-employed will always, or even usually, either be in a position to procure 
that the pension schemes in their home state in which they have accrued rights should take 
the necessary steps to register as a qualifying overseas pension scheme, or that it would 
occur to them to try to do so. 
63. In those circumstances the Referring Court considers that the provisions of sections 11 and 
12 WRPA 1999 and the 2002 Regulations, under which the full protection of section 11 
WRPA 1999 is only available to those with rights under approved pension arrangements, 
although not expressly drafted by reference to nationality, are liable to affect a 
substantially higher proportion of nationals of other Member States exercising their right 
of establishment in the UK. If therefore the impact of bankruptcy on accrued pension rights 
is within the scope of Article 49, they constitute discrimination in enjoyment of a social 
advantage which is prohibited by Art 49 TFEU and Art 24 CRD. 
64.  If this view is well-founded – which is the question on which the Court of Justice is asked 
to give a preliminary ruling – then Referring Court takes the view that it is able, by 
applying the principle of conforming interpretation, to interpret section 11 WRPA 1999 in 
such a way as to eliminate discrimination and that this can be done by interpreting the 
national provisions to extend to a pension scheme approved by or registered with the tax 
authorities of another Member State. This is in line with the purpose of the legislation 
which is to ensure that pension rights are fully protected only when they arise under 
arrangements approved by or registered with or recognised by the relevant tax authorities 
in the Member State in which they are established.    
Dated 25 March 2020 
The Judge 
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 a Judge of the High Court, Business and Property Courts (Chancery Division) 
Reference to be sent to the Court Registry of the Court of Justice by email (DDP-
GreffeCour@curia.europa.eu) or by post to the Registry of the Court of Justice, Rue du Fort 
Niedergrünewald, L-2925, Luxembourg, LUXEMBOURG).   
Documents to be included in the reference: - 
4. 
3. 
2. 
1. The Judgment of Judge 
Mr M’s  application of 29 March 2019  
The Trustees’ application of 1 November 2018 
ICC Judge order of 18 June 2019 with Preliminary Issue and Schedule of Agreed and 
The witness statement of the trustee dated 1 November 2018 
The witness statement of Mr M dated 2 November 2012 
Assumed Facts  
5. 
6.