Tuesday, 1 March 2011

Sheilas' Wheels - an ECJ ruling

The European Court of Justice is the EU court in Luxembourg, the one set up to rule on the interpretation of treaties. It is the court which in the early 1960s made it crystal clear that it was the final arbiter of a new legal order, which we now know as the European Union.

Member states couldn't ignore its rulings and neither could citizens. The potential for the court to rule on all areas of life was implicit in the Treaty of Rome but anyone who pointed this out was dismissed as a swivel-eyed conspiraloon. Gradually, the effective areas of law were extended.

Today, if you want to sell your house, you have to pay to fill in a form - an Energy Performance Certificate - about light bulbs and insulation, not because the buyer gives a hoot as they are interested in location and space, but because an EU regulation says Something Must Be Done, and Britain is a member of the EU and has agreed to abide by laws generated by the European legislation, and the EPC rule is buried down in the fine print of a directive.

The process of challenging the rule itself if so Byzantine that nobody has even tried it in this instance. It would cost a fortune, drive them mad and they'd probably lose, as Mrs Thatcher found out in the Factortame case. I reckon that case helped push her over the edge; she certainly became less anchored in political reality than she had been around then.

The short version is: if it is a ruling of the ECJ, or if you'd lose at the ECJ if you went there, then we have to abide by it for as long as we remain a member state of the European Union.

Today the ECJ has confirmed the opinion of Advocate General Juliane Kokutt that being male or female cannot be used as a factor when calculating motor insurance prices, over-riding derogations (the law being temporarily disapplied) from earlier arguments. The opinion recognized that it is an actuarial fact that the sex of a driver changes the profile of the risk. The ruling says firms can't take that actuarial fact in to consideration when setting price relative to risk from the end of December 2012. Previous derogations no longer hold as a matter of social policy.

The social policy is being set by a court which isn't even our own Supreme Court. Besides, we have a legislature for setting social policy. This would once have been called 'usurping the authority of parliament'. Possibly our own court would have to give the same ruling because of the Equalities Act 2010, but we don't know because it didn't happen here. Our own judges were not given the chance to interpret our own laws, nor our electors to pass an opinion on whether we wanted this act repealed or not.

Because of how the ECJ's website works, you have to go to an index and click on the correct case:




Association Belge des Consommateurs Test-Achats and Others

Social policy

for the preliminary opinion which gives the fact and the legal reasoning.

The Court's confirmation of this opinion is published at:


Association Belge des Consommateurs Test-Achats and Others
Social policy

Many people hold that the original basis of offering prices was sexist. This is to misunderstand the statistical nature of betting, which is all insurance is; the laying-off of risk with someone prepared to aggregate those risks over big numbers for a fee.

The rates were never based on beliefs about driver competence related to gender. It was a matter of counting the claims. Over big numbers men tend to have more accidents and those accidents are more expensive. Over big numbers women tend to have fewer accidents and cheaper ones. There's no secret about it; young men are the highest risk.

As Damon Runyon put it: The race is not always to the swift, nor the battle to the strong, but that's the way to bet.

In Britain the publicity has focused on the insurance brand "Sheilas' Wheels.” There are other brands, but this is the best known one to pitch itself specifically to females. It isn't Australian and it isn't a company. Rather, it’s a line of insurance wrappers developed since 2005 from esure.

Men can take out policies with Sheilas' Wheels, and if they do the price will be based on a calculation of their statistical risks. It has spent five years attracting female customers and is a brand-leader. It has no problems with the ruling. As far as they are concerned, it is free publicity.

As the customer-base is overwhelmingly female they may be able to lay off some of the risks of the male customers after 2012 against the lower claims of the female customers, at least until the number of male customers rises and they can no longer offer preferential rates compared to the wider market.

From the end of 2012 the company can truthfully say it is unable to offer lower prices reflecting risk related to the sex of the person in front of them. Instead, they will then have to charge women the same price that they would to males which just happens to be more expensive.

You didn't really think any prices were going to come down, did you?

If you want prices to come down, there is a way.....

a useful index h/t City Unslicker
Gonna Get Along Without EU Now Concerned citizens plan a rally, indoors.


Electro-Kevin said...

Our problem is not so much EU law -much of the EU ignores it whilst we are steadfast in applying it.

We have a combinations of:

- the EU rulings from Europe

- Legal aided/no-win-no-fee lawyering from America

and a socialist 1960s establishment from Britain(both sides of the House) which throws its arms up in fake 'dismay' about EU law whilst loving every bit of it because it suits the liberal agenda perfectly.

Electro-Kevin said...

Cameron is as big a wanker as Blair. You'll realise that soon enough.

Woman on a Raft said...

True. It is interesting how Theresa May didn't get very far before she was paralized, that's even if she intended to make many repeals or cuts. A few good starts, then in under a year, she's been sprayed in quick-setting sticky-stuff and it's business as usual.

I'd have disbanded the Equalities Commission, repealed the Act, and quoted Protocol 7 of the Draft Treaty which gives the UK opt-outs of the Fundamental Rights agenda and only obliges it to act on what is already in UK law.

The point about the Equalities Act is that it smuggles in a huge chunk of EU law which would otherwise be excluded. It's an EU Trojan - it enables EU law to take direct effect the way the ECA72 did.

Dick the Prick said...

The knock on effects upon pensions also will give people nightmares if they're of a certain age. It's straight out of Blackadder and a case of 'if nothing else works, a total pig-headed unwillingness to look facts in the face will see us through'.

I bet some actuaries are creaming themselves tonight - trebles all round!! Pity the poor sods who live in rural places and need a car for work or something - 'bye, see ya, tara money, it's been fun'.

banned said...

All the insurance companies need do is charge all new drivers the same (with allowance for the type of car) and then use actual subsequent claims to adjust premiums thereafter on an individual basis. It's all computerised and wont cost much.

Apart from that this ruling is a foolish as Bill Clinton insisting that US Banks give mortgages to the "disadvantaged" (unemployed black women in Alabama) which was one reason for the current financial crisis.

Woman on a Raft said...

No doubt they'll fudge something up for motor insurance but the sting will be in the pensions, as Dick says.