Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
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1. Social policy ° Equal treatment for men and women in matters of social security ° Matters covered by Directive 79/7 ° Statutory scheme exempting certain categories of persons from prescription charges ° Included
(Council Directive 79/7, Art 3(1))
2. Social policy ° Equal treatment for men and women in matters of social security ° Directive 79/7 ° Derogation allowed in respect of possible consequences for other benefits of different pensionable ages ° Scope ° Limited to forms of discrimination necessarily and objectively linked to the difference in pensionable ages ° Discrimination with regard to exemption from prescription charges ° Excluded
(Council Directive 79/7, Art. 7(1)(a))
3. Preliminary rulings ° Interpretation ° Temporal effects of rulings on interpretation ° Retroactive effect ° Limitation by the Court ° Conditions ° Ruling interpreting Directive 79/7 on equal treatment of men and women in matters of social security ° Conditions not satisfied ° Importance for the Member State concerned of the financial consequences of the judgment ° Not a decisive criterion
(EC Treaty, Art. 177; Council Directive 79/7, Arts 4(1) and 7(1)(a))
Summary
1. Article 3(1) of Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security is to be interpreted as meaning that a statutory scheme exempting various categories of persons, in particular certain old people, from prescription charges falls within the scope of the directive.
Although it does not strictly form part of national social security rules, such a scheme affords to those entitled under it protection against the risk of sickness referred to in that provision.
2. Article 7(1)(a) of Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security does not allow a Member State which, pursuant to that provision, has set the pensionable age for women at 60 years and for men at 65 years also to provide that women are be exempt from prescription charges at the age of 60 and men only at the age of 65.
Such discrimination with regard to prescription charges is not necessarily and objectively linked to the difference in retirement age. First, from the point of view of financial equilibrium, it is not necessary in connection with pensions, in view of the fact that the grant of benefits under non-contributory schemes to persons in respect of whom certain risks have materialized without reference to their entitlement to an old-age pension by virtue of contribution periods completed by them has no direct influence on the financial equilibrium of contributory pension schemes, nor does that appear to be the case in connection with the social security system as a whole. Secondly, from the point of view of coherence between the retirement pension scheme and other benefit schemes, it is not necessary because, although it is true that the increase in health costs linked to age may justify an exemption from prescription charges being granted after a certain age, there is no requirement that that benefit should be granted at the statutory age of retirement, established at different ages according to sex, which is not necessarily the age at which working life ceases or revenue diminishes as a consequence.
3. The interpretation which the Court of Justice gives to a rule of Community law in exercising its jurisdiction under Article 177 of the Treaty clarifies and defines where necessary the meaning and scope of that rule as it must be, or ought to have been, understood and applied from the time of its entry into force. It follows that the rule as so interpreted may, and must, be applied by the courts even to legal relationships arising and established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating to the application of that rule to be brought before the courts having jurisdiction are satisfied.
It is only exceptionally that the Court may, in application of a general principle of legal certainty inherent in the Community legal order, be moved to restrict the possibility for any person concerned of relying upon the provisions thus interpreted with a view to calling in question legal relationships established in good faith.
There is no reason for the Court to avail itself of that possibility in a judgment finding that the derogation from equality between men and women in matters of social security allowed by Article 7(1)(a) in relation to retirement age does not authorize discrimination between men and women as regards the age from which there is entitlement to exemption from prescription charges: the Member State in question was not unaware that the exemption from prescription charges fell within the scope of the directive, even though the Commission, notified of the discrimination which was being practised, did not consider it necessary to act in order to bring it to an end, and the financial consequences which might ensue for the State as a result of having infringed the prohibition against discrimination do not in themselves justify limitation in time of the effects of a preliminary ruling.
If the temporal effect of the judgment is not limited, it follows that the direct effect of Article 4(1) of Directive 79/7 may be relied upon in support of a claim for damages, in respect of periods prior to the date of the ruling on its interpretation, by persons who have not brought legal proceedings or made an equivalent claim prior to that date.
Parties
In Case C-137/94,
REFERENCE to the Court under Article 177 of the EC Treaty by the Divisional Court of the Queen' s Bench Division of the High Court of Justice of England and Wales for a preliminary ruling in the proceedings pending before that court between
The Queen
and
Secretary of State for Health,
ex parte Cyril Richardson
on the interpretation of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (OJ 1979 L 6, p. 24),
THE COURT (Sixth Chamber),
composed of: C.N. Kakouris, President of the Chamber, F.A. Schockweiler (Rapporteur), P.J.G. Kapteyn, J.L. Murray and H. Ragnemalm, Judges,
Advocate General: M.B. Elmer,
Registrar: L. Hewlett, Administrator,
after considering the written observations submitted on behalf of:
° Cyril Richardson, by D. Rose, Barrister, instructed by Messrs Vizards, Solicitors,
° the United Kingdom, by S. Braviner, of the Treasury Solicitor' s Department, acting as Agent, assisted by D. Pannick QC, and N. Paines, Barrister,
° the Commission of the European Communities, by M. Wolfcarius and N. Khan, of its Legal Service, acting as Agents,
having regard to the Report for the Hearing,
after hearing the oral observations of Cyril Richardson, the United Kingdom and the Commission at the hearing on 18 May 1995,
after hearing the Opinion of the Advocate General at the sitting on 13 July 1995,
gives the following
Judgment
Grounds
1 By order of 5 May 1994, received at the Court on 16 May 1994, the Divisional Court of the Queen' s Bench Division of the High Court of Justice of England and Wales referred to the Court for a preliminary ruling under Article 177 of the EC Treaty three questions concerning the interpretation of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (OJ 1979 L 6, p. 24, hereinafter "Directive 79/7").
2 The questions were raised upon the hearing of an application for judicial review made to the Divisional Court by Cyril Richardson, a retired man of 64 years of age who considers that he suffers discrimination on the ground of sex in that, under Regulation 6(1)(c) of the National Health Service (Charges for Drugs and Appliances) Regulations 1989, Statutory Instrument No 419 (hereinafter "the 1989 Regulations"), women between 60 and 64 years of age, unlike men in the same age bracket, are exempted from paying charges for the supply of drugs, medicines and appliances (hereinafter "prescription charges").
3 In the United Kingdom, section 77(1)(a) of the National Health Service Act 1977 ("the 1977 Act") authorizes the Secretary of State to adopt regulations providing for the payment of prescription charges in accordance with the rules laid down therein. Section 83A(1)(a), inserted into the 1977 Act by the Social Security Act 1988, authorizes the adoption of regulations providing for exemption from those charges for certain categories of persons. Under Section 83A(2), those categories of persons may be prescribed in particular by reference to age, type of condition affecting them, and the resources available to them.
4 Pursuant to those provisions, the Secretary of State adopted the 1989 Regulations, Regulation 6(1) of which provides for exemption from prescription charges for:
"(a) a person who is under 16 years of age;
(b) a person who is under 19 years of age and is receiving qualifying full-time education within the meaning of paragraph 7 of Schedule 12 to the Act;
(c) a man who has attained the age of 65 years or a woman who has attained the age of 60 years;
(d) a woman with a valid exemption certificate issued by a Committee on the ground that she is an expectant mother or has within the last twelve months given birth to a live child or a child registrable as still-born under the Births and Deaths Registration Act 1953;
(e) a person with a valid exemption certificate issued by a Committee on the ground that he is suffering from one or more of the following conditions °
(i) permanent fistula (including caecostomy, colostomy, laryngostomy or ileostomy) requiring continuous surgical dressing or an appliance;
(ii) the following disorders for which specific substitution therapy is essential °
Addison' s disease and other forms of hypoadrenalism,
diabetes insipidus and other forms of hypopituitarism,
diabetes mellitus,
hypoparathyroidism,
myasthenia gravis,
myxoedema;
(iii) epilepsy requiring continuous anti-convulsive therapy;
(iv) a continuing physical disability which prevents the patient from leaving his residence without the help of another person;
(f) a person with a valid exemption certificate issued by the Secretary of State in respect of the supply of drugs and appliances for the treatment of accepted disablement, but only in respect of those supplies to which the certificate relates;
(g) a person with a valid pre-payment certificate."
5 Since the Secretary of State contends that the prescription charges system and the exemptions from prescription charges are not matters covered by Directive 79/7 as defined in Article 3(1) and that in any event the exemption for persons who have reached pensionable age is excluded from its scope by Article 7(1)(a) of Directive 79/7, the High Court has decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling:
"1. Is the exemption from prescription charges for various categories of persons under Regulation 6(1) of the National Health Service (Charges for Drugs and Appliances) Regulations 1989, Statutory Instrument No 419, or for particular old people under Regulation 6(1)(c), within the scope of Article 3 of Directive 79/7/EEC?
2. If the answer to Question 1 is yes, does Article 7(1)(a) of Directive 79/7/EEC apply in the circumstances of this case?
3. If there has been a breach of Directive 79/7/EEC, can the direct effect of that Directive be relied on to support a claim for damages for periods prior to the date of the Court' s judgment by persons who have not prior to that date brought legal proceedings or made an equivalent claim?"
The first question
6 By its first question the High Court asks whether Article 3(1) of Directive 79/7 must be interpreted as meaning that a system such as that established by Regulation 6(1) of the 1989 Regulations, which exempts certain categories of persons, in particular certain old people, from prescription charges falls within the scope of the directive.
7 According to its wording, Article 3(1) of Directive 79/7 applies to statutory schemes which provide protection against the risks of sickness, invalidity, old age, accidents at work and occupational diseases, and unemployment, and to social assistance, in so far as it is intended to supplement or replace those schemes.
8 As the Court has already held, in order to fall within the scope of Directive 79/7, a benefit must constitute the whole or part of a statutory scheme providing protection against one of the specified risks, or a form of social assistance having the same objective (see the judgments in Case 150/85 Drake [1986] ECR 1995, at paragraph 21, Case C-243/90 Smithson [1992] ECR I-467, at paragraph 12 and Joined Cases C-63/91 and C-64/91 Jackson and Cresswell [1992] ECR I-4737, at paragraph 15).
9 The Court has also stated that, although the way in which a benefit is granted is not decisive for the purposes of Directive 79/7, the benefit must, in order to fall within its scope, be directly and effectively linked to the protection provided against one of the risks specified in Article 3(1) of the directive (Smithson, cited above, at paragraph 14, and Jackson and Cresswell, cited above, at paragraph 16).
10 A benefit such as that provided for in Regulation 6(1)(c) of the 1989 Regulations fulfils those conditions.
11 First, being provided for by statute and implemented by regulation it forms part of a statutory scheme.
12 Secondly, it affords direct and effective protection against the risk of sickness referred to in Article 3(1) of Directive 79/7 in so far as grant of the benefit to any of the categories of people referred to is always conditional on materialization of the risk in question.
13 Lastly, in view of the fundamental importance of the principle of equal treatment and the aim of Directive 79/7, which is the progressive implementation of that principle in matters of social security, a system of benefits cannot be excluded from the scope of the directive simply because it does not strictly form part of national social security rules. The fact, relied on by the United Kingdom, that the exemption from prescription charges is provided for in the National Health Service Act 1977 does not therefore affect the foregoing conclusion.
14 Consequently, the reply to the High Court' s first question must be that Article 3(1) of Directive 79/7 is to be interpreted as meaning that a system such as that established by Regulation 6(1) of the 1989 Regulations exempting various categories of persons, in particular certain old people, from prescription charges falls within the scope of the directive.
The second question
15 Before a reply is given to this question it should be noted that, first, it is not disputed that a national rule such as Regulation 6(1)(c) of the 1989 Regulations involves direct discrimination on the ground of sex, inasmuch as women are exempt from prescription charges at 60 years of age whereas men are only exempt at 65 years of age and, secondly, that those age limits correspond to the statutory pensionable ages for men and women laid down in the United Kingdom for the grant of old-age and retirement pensions.
16 Further, Article 7(1)(a) of Directive 79/7 allows Member States to exclude from its scope not only the setting of pensionable age for the purposes of granting old-age and retirement pensions, but also the possible consequences thereof for other benefits.
17 In those circumstances, the point of the second question is whether Article 7(1)(a) of Directive 79/7 authorizes a Member State which, pursuant to that provision, has set the pensionable age for women at 60 years and for men at 65 years, also to provide that women are to be exempt from prescription charges at the age of 60 and men only at the age of 65.
18 In its judgment in Case C-328/91 Thomas and Others [1993] ECR I-1247, the Court held that where, pursuant to Article 7(1)(a) of Directive 79/7, a Member State prescribes different retirement ages for men and women for the purposes of granting old-age and retirement pensions, the scope of the permitted derogation, defined by the words "possible consequences thereof for other benefits" contained in Article 7(1)(a), is limited to forms of discrimination existing under the other benefit schemes which are necessarily and objectively linked to the difference in retirement age.
19 That is so where the discrimination in question is objectively necessary in order to avoid disturbing the financial equilibrium of the social security system or to ensure coherence between the retirement pension scheme and other benefit schemes (judgment in Thomas and Others, cited above, at paragraph 12; see also the judgment in Case C-92/94 Graham and Others, not yet published in the ECR, at paragraph 12).
20 As regards the requirement of maintaining financial equilibrium between the old-age pension scheme and other benefit schemes, it should be noted that in paragraph 14 of its judgment in Thomas the Court has already held that the grant of benefits under non-contributory schemes to persons in respect of whom certain risks have materialized where this occurs without reference to their entitlement to an old-age pension by virtue of contribution periods completed by them, has no direct influence on the financial equilibrium of contributory pension schemes.
21 Secondly, as the Commission has pointed out, there is here an inverse relationship between entitlement to the benefit constituted by exemption from prescription charges as provided for in Regulation 6(1)(c) of the 1989 Regulations and the payment of National Insurance contributions, inasmuch as it is only once a person has reached pensionable age and is no longer liable to pay National Insurance contributions that he or she is exempt from prescription charges under that provision.
22 That being so, it must be accepted that the removal of the discrimination would not affect the financial equilibrium of the pension system.
23 Indeed, according to the order for reference itself, there is no evidence that changing the rules at issue would imperil the financial equilibrium of the social security system as a whole.
24 That conclusion cannot in any way be affected by the mere fact that extending entitlement to exemption from prescription charges to men who have reached the age of 60 would increase the financial burden borne by the State in the funding of its national health system. It is settled law that, in exercising their powers under Articles 117 and 118 of the EC Treaty to define their social policy in the framework of the close cooperation to be promoted by the Commission, the Member States are at liberty to define the nature and extent of measures of social protection, including those relating to social security, and the way in which they are implemented; they may also take measures, in order to control their social expenditure, which have the effect of withdrawing social security benefits from certain categories of persons, provided that those measures are compatible with the principle of equal treatment between men and women (judgment in Case C-343/92 De Weerd and Others [1994] ECR I-571, at paragraphs 28, 29 and 37).
25 Therefore, the discrimination at issue in the main proceedings is not objectively necessary to ensure coherence between the retirement pension system and the system provided for in Regulation 6(1)(c) of the 1989 Regulations.
26 Although the fact that the elderly will generally incur more prescription charges than younger people at a time when they will normally have less disposable income may provide some justification for exempting them from prescription charges above a certain age, that consideration does not require this benefit to be granted at statutory pensionable age and therefore at different ages for men and women.
27 Just as a woman who has reached the statutory pensionable age is entitled to continue to pursue her occupational activities beyond that age and may thus find herself in the same situation as a man of the same age who is still a member of the working population, a man may draw a retirement pension before he has reached statutory pensionable age and thus find himself in the same situation as a woman of the same age who is drawing the retirement pension to which she is entitled.
28 In view of the foregoing, it must be concluded that a form of discrimination such as that at issue in the main proceedings is not necessarily linked to the difference between the pensionable ages for men and for women and is not therefore covered by the derogation laid down in Article 7(1)(a) of Directive 79/7.
29 The reply to the second question must therefore be that Article 7(1)(a) of Directive 79/7 does not allow a Member State which, pursuant to that provision, has set the pensionable age for women at 60 years and for men at 65 years also to provide that women are be exempt from prescription charges at the age of 60 and men only at the age of 65.
The third question
30 By its third question the High Court asks this Court to state whether, in view of the answers given to the first two questions, the effects of this judgment should be limited in time so that the direct effect of Article 4(1) of Directive 79/7 could not be relied on to support a claim for damages in respect of periods prior to the date of the judgment by persons who had not brought legal proceedings or made an equivalent claim prior to that date.
31 The Court has consistently held that the interpretation which the Court of Justice gives to a rule of Community law in exercising its jurisdiction under Article 177 of the Treaty clarifies and defines where necessary the meaning and scope of that rule as it must be, or ought to have been, understood and applied from the time of its entry into force. It follows that the rule as so interpreted may, and must, be applied by the courts even to legal relationships arising and established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating to the application of that rule to be brought before the courts having jurisdiction, are satisfied (see the judgment in Case 61/79 Denkavit Italiana [1980] ECR 1205, at paragraph 16).
32 In view of those principles, it is only exceptionally that the Court may, in application of a general principle of legal certainty inherent in the Community legal order, be moved to restrict the possibility for any person concerned of relying upon the provisions thus interpreted with a view to calling in question legal relationships established in good faith (judgment in Case C-163/90 Legros and Others [1992] ECR I-4625, at paragraph 30).
33 In this case there is no factor to justify a derogation from the principle that a ruling on the interpretation of Community law takes effect from the date on which the rule interpreted entered into force.
34 First, contrary to the position it took in the present case, the United Kingdom was not unaware that an exemption from prescription charges fell within the scope of Directive 79/7 as defined in Article 3(1). In a letter of 11 June 1985 it had in fact informed the Commission, pursuant to Article 8(2) of Directive 79/7, that it was relying on Article 7(1)(a) in order to maintain the difference in treatment between men and women in relation to prescription charges, the implication being that the exemption fell within the scope of the directive.
35 Secondly, the mere fact that the Commission did not respond to that information could not reasonably have caused the United Kingdom to believe that that difference of treatment was excluded from the scope of Directive 79/7 pursuant to Article 7(1)(a). The directive contains no specific provision obliging the Commission to approve or disapprove measures communicated to it pursuant to Article 8(2). Moreover, in performing its general task of acting as the guardian of the Treaties, the Commission has a discretion in assessing the expediency of initiating the procedure laid down in Article 169 of the Treaty.
36 Finally, in requesting that the effect of this judgment should be limited in time, the United Kingdom cannot rely on the financial consequences which it is liable to entail or on the consideration that the facts on which any claims would be based would often be difficult, if not impossible, to establish.
37 The financial consequences which might ensue for a Member State from a preliminary ruling have never in themselves justified limiting the temporal effect of such a ruling (see, in particular, the judgment of 11 August 1995 in Joined Cases C-367/93 to C-377/93 Roders and Others, not yet published in the ECR, at paragraph 48). Furthermore, the burden of proof normally lies on the person relying on the facts alleged, so that any difficulties which a claimant might have in this regard would in any event be prejudicial to his case.
38 Consequently, the reply to the third question must be that there is no reason to limit the temporal effect of this judgment, so that the direct effect of Article 4(1) of Directive 79/7 may also be relied on to support claims for damages in respect of periods prior to the date of the judgment by persons who have not brought legal proceedings or made an equivalent claim prior to that date.
Decision on costs
Costs
39 The costs incurred by the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT (Sixth Chamber),
in answer to the questions referred to it by the Divisional Court of the Queen' s Bench Division of the High Court of Justice, by order of 5 May 1994, hereby rules:
1. Article 3(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security is to be interpreted as meaning that a system such as that established by Regulation 6(1) of the National Health Service (Charges for Drugs and Appliances) Regulations 1989, exempting various categories of persons, in particular certain old people, from prescription charges falls within the scope of the directive.
2. Article 7(1)(a) of Directive 79/7 does not allow a Member State which, pursuant to that provision, has set the pensionable age for women at 60 years and for men at 65 years also to provide that women are be exempt from prescription charges at the age of 60 and men only at the age of 65.
3. There is no reason to limit the temporal effect of this judgment, so that the direct effect of Article 4(1) of Directive 79/7 may also be relied on to support claims for damages in respect of periods prior to the date of the judgment by persons who have not brought legal proceedings or made an equivalent claim prior to that date.
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