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The fundamental right of non-discrimination
In the Test-Achats case the ECJ had to determine whether it is compatible with fundamental rights to use gender as a factor to assess insurance risks. This high-profile case raised strong reactions by scholars and by representatives of the insurance sector, and had a significant impact on EU regulation regarding non-discrimination.
The case concerned Directive 2004/113/EC, which forbids discrimination based on gender in the access to and supply of goods and services. In particular, the directive prohibits the use of gender as a factor in calculating an insurance premium and benefits in insurance contracts. However, one exception was included in Article 5(2), permitting the taking into account of gender differences, if this was a determinant risk factor, whose influence could be substantiated by relevant and accurate data.
This case was initiated in 2008 by a Belgian consumer organization (Association Belge des Consommateurs Test-Achats) and two individuals who lodged an action for the annulment of a Belgian law  transposing the aforementioned directive, and in particular the exception of Article 5(2). The applicants claimed that the Belgian Law, allowing for such exception, did not comply with the principle of equal treatment for men and women, and infringed in particular Articles 20, 21, and 23 of the Charter of Fundamental Rights, Article 14 ECHR, and Article 26 of the International Covenant on Civil and Political Rights. As a result of the action, the Belgian Constitutional Court submitted a reference for a preliminary ruling to the ECJ asking whether Article 5(2) of the directive was compatible with Article 6(2) EU, and with the principle of equality and non-discrimination guaranteed by that provision.
Advocate General Juliane Kokott applied a fundamental rights analysis to assess the matter. She started by underlining that ‘a condition of the lawfulness of all European acts is respect for fundamental and human rights’. The basis for this lies in Article 6 TEU, which states that the Union is founded on the respect for fundamental rights included in the Charter. In particular, equal treatment and non-discrimination between men and women are fundamental rights included in Article 21(1) and Article 23(1) of the Charter. As a consequence, difference in treatment between genders may only be allowed in exceptional cases, when it is clearly demonstrable that gender differences have a material impact on the matter in hand.
Kokott was of the opinion that the exception in the directive was not supported by clear evidence that gender differences have a determinant impact on risks. In fact, many other factors equally influence the evaluation of insurance risks. For instance, life expectancy also depends on the economic and social condition and lifestyle of each insured person. Therefore, Kokott concluded against the validity of Article 5(2). In her view, it was incompatible with EU fundamental rights and the principle of equal treatment for men and women to take the gender of an insured person into account as a risk factor in insurance contracts.
The ECJ followed Kokott’s recommendation (albeit applying a slightly different reasoning) as it ruled on 1 May 2011 that the exemption in Article 5(2) of the 2004 directive is invalid. The ECJ started by stressing the core importance of fundamental rights, referring to Article 6 TEU, which provides that the EU is to respect fundamental rights as guaranteed by the ECHR and as they result from the constitutional traditions common to the Member States. Those fundamental rights are included in the Charter, which has the same legal status as the Treaties. Then the ECJ stated that since Articles 21 and 23 of the Charter are expressly mentioned in Directive 2004/113, the validity of Article 5(2) of that directive must be assessed in the light of these fundamental rights.
The Court then examined a number of Treaty provisions concerning the right to equal treatment for men and women, such as Article 157(1) TFEU on the principle of equal pay for men and women and Article 19(1) TFEU, which confers a competence on the Council to combat discrimination. For the substantive assessment of Article 5(2) of the directive the Court referred to the principle of equal treatment applied in its former jurisprudence requiring ‘that comparable situations must not be treated differently, and different situations must not be treated in the same way, unless such treatment is objectively justified’. The comparability of situations must be examined in the light of the concrete subject-matter and bearing in mind the aim of the EU measure under consideration. Thus, in the present case, the Court relied on Directive 2004/113 to assess the comparability of situations in the present case and concluded that in accordance with Articles 21 and 23 of the Charter the directive is based on the premise that ‘the respective situations of men and women with regard to insurance premiums and benefits contracted by them are comparable’. Accordingly, the Court found that the exception included in Article 5(2) of the directive, allowing Member States to maintain without temporal limitation an exemption from the rule of unisex premiums and benefits, works against the achievement of the objective of equal treatment. According to the Court this meant that the derogation might continue indefinitely, which would be incompatible with the purpose of Directive 2004/113 and with Articles 21 and 23 of the Charter.
Therefore, the Court concluded that Article 5(2) of Directive 2004/113 was invalid with effect from 21 December 2012.
This case shows that the Charter plays an increasingly important role in the Court’s decision-making. The ECJ affirmed the central function of fundamental rights as a benchmark to assess the validity of secondary law.
As a practical result of the case, insurers had to change their policies, determining policy terms on a gender-neutral basis. Furthermore, the Test-Achats case may open the door for a wider fundamental rights and equality debate in financial services contracts. For example, legislative acts and financial services contracts may also be assessed in terms of non-discrimination on the basis of age, disability, or even of social origin (explicitly mentioned in Article 21 of the Charter).
Also of special interest is the background of this judgment. The fact that a consumer organization brought this case, in order to defend broader fundamental rights and general principles such as equality between men and women, may indicate a new trend of consumer activism, based on strategic litigation, to promote specific principles or fundamental values in the EU.
In conclusion, there are clear signs that fundamental rights are increasingly influencing consumer protection in financial services. As argued, the Charter is playing a role in this evolution and may fill, to a certain extent, the gap left by the current financial services legislation, by promoting new policies and new principles which find application in consumer law. However, it is still too early to make clear predictions in this field. The future will largely depend on how active the EU policy-makers will be, and how far the ECJ will go with its interpretation.
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