This morning, the European Court of Justice ruled to scrap the insurance industry's opt-out from the EU's 2004 Gender Directive, which will mean insurers can no longer offer different products and prices to men and women based on their sex from December 2012.
This may appear like an everyday consumer story, but it's not. In fact, it's difficult to find an example which better illustrates why EU judges need to be reined in and David Cameron needs to revisit his election promise to limit the jurisdiction of the ECJ and the application of the Charter of Fundamental Rights, entailed in the infamous Lisbon Treaty.
Of the two European courts – the ECJ in Luxembourg and the European Court of Human Rights in Strasbourg (ECHR) – the former is clearly the one with the most influence. On occasion, the ECHR rules on highly symbolic and emotionally charged issues such as prisoners' right to vote – rulings which rightly get a lot of attention. But the influence of the ECJ creeps in to a whole range of areas, striking deep into British society and the economy, from working time for junior doctors to the governance of the UK's most important national industry – the City of London.
The ECJ's ruling this morning combines virtually everything that is wrong with the EU's judicial system. And there's a lot going on. Here goes:
Unnecessary cost of EU laws to individual consumers Open Europe estimates that the insurance industry will have to raise nearly £1 billion extra to cover itself against the uncertainties created by the ruling – a large chunk of which is likely to be passed on to individual consumers. Moreover, taking motor insurance as an example, a 17 year old female driver will now have to pay an extra £4,300 in insurance premiums by the time she reaches the age of 26 as a consequence of the ruling. In a worst case scenario, women drivers' cumulative insurance costs between the ages of 17 and 26 could increase by as much as £9,300. Young male drivers would on average save an estimated £3,250 over the same period of time (despite displaying riskier behaviour behind the wheel), but the cost to consumers taken as a whole will clearly increase (and men will in turn lose out on their pensions, as a consequence of the ruling).
The unintended consequences of EU laws Just as was the case with the Working Time Directive – which the ECJ has extended on eight separate occasions, imposing a huge cost on the NHS and the UK economy – the ruling shows how an EU law can change in the most unpredictable way after the UK government has signed up to it (lesson: don't sign up to EU laws without first thinking through all possible unintended consequences).
The EU's endemic democratic deficit No one in the UK ever objected to the practice of charging men and women different insurance premiums, not individuals, not consumer groups, not UK judges and certainly not democratically elected MPs. And yet, this practice has been scrapped by judges that no one ever voted for, based on a case brought before the courts in a different country (Belgium).
Human rights legislation out of control The ECJ argued that using gender to differentiate between male and female insurance policies is in violation of EU law on human rights, meaning that despite the fact that roughly 95% of driving offences causing death or injury are committed by young men, the judges could rule that – perversely – taking such evidence into account violates young men's rights. Is this really what human rights law should be about?
The blurring of the line between the ECJ, the Commission and the ECHR In its ruling, the ECJ made references to both the European Convention on Human Rights, overseen by the Council of Europe (and not an EU institution) and the EU's Charter of Fundamental Rights. This sounds techy, but illustrates the complex web of European human rights law that is now in the hands of European judges at both the Council of Europe's ECHR in Strasbourg and the EU's ECJ in Luxembourg.
In other words, the case law of the ECJ and the ECHR is becoming progressively more blurred as EU judges continually make references to the European Convention on Human Rights in their rulings. In a lecture last year, the Lord Chief of Justice Lord Judge noted that, "The [EU's] European Court of Justice is beginning to acquire jurisdiction over matters that would normally be regarded as matters not for Luxembourg but for Strasbourg." This hugely confusing fudge raises a range of questions about accountability.
The UK government does NOT have an opt-out from the Lisbon Treaty's Charter of Fundamental Rights Do you remember the claims that the UK had won an "opt-out" from the Lisbon Treaty's Charter of Fundamental Rights (supposedly one of the Labour Government's "red lines" on the Lisbon Treaty and an alleged reason why the promised referendum wasn't called)? Well, as we've argued again and again, there never was such an opt-out and this case clearly illustrates why. The Court draws heavily from the Charter in its ruling – and there's no question whatsoever of the UK not being affected by it. In fact, it impacts on the UK the most, as it is home to Europe's largest insurance industry.
The Conservative election manifesto promised to negotiate a firm opt-out from the Charter before Coalition politics became one of the new realities of life. It also promised to tackle virtually all the other problems so clearly illustrated by this ruling. The Coalition has taken some positive steps on EU reform, but how much longer can they dodge this key issue?