ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00001752
Complaints for Resolution:
Complaint/Dispute Reference No.
Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under Section 21 Equal Status Act, 2000
Venue: WRC Tom Johnson House, Haddington Rd, Dublin 4.
Date of Adjudication Hearing: 13/05/2016
Workplace Relations Commission Adjudication Officer: Eugene Hanly
In accordance with Section 41(4) of the Workplace Relations Act, 2015 and Section 25 of the Equal Status Act, 2000 following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
The Complainant states that she was discriminated against because of her race when she sought a quote for car insurance.
Complainant’s Submission and Presentation:
The Applicant is a Polish national residing in Ireland since 2005. She holds a full Polish driving licence since 1994 valid for category B vehicles. She held a no claim discount of 5 years earned solely in Ireland.
The Applicant applied online for car insurance with the Respondent. The insurance policy was offered by the Respondent via the official website after providing number of details about the driver, subject car, date of issuing the first driving licence, length no claim bonus, etc. The application was made on 16th June 2015. The quote received online seemed a bit excessive when compared to the insurance premium paid at the time in another, not mentioned herein, insurer. Out of curiosity the Complainant amended the details provided to the Respondent to state that she holds a full Irish and UK driving licence. The new quote was cheaper than when the true and correct details were entered, i.e. when the driving licence was given as full EU driving licence (other than Irish or UK). The details of the quote was as follows:
- a full EU driving licence: the quote received was €601.00
- a Full Irish and UK driving licence: the quote was €510.08
None of the other parameters in the proposal i.e. the period of residence in Ireland, the length of no claim bonus, address or else differed. The Applicant took out a policy of insurance from a different insurer altogether, who did not quote different prices for the holders of Irish and the holders of other EU driving licences.
In the letter of 15th July 2015 the Respondent wrote that: “some time ago we established that EU licence holders in general perform more poorly than full Irish licence holders on our car and van products, hence the difference in premium”. The Respondent seems to wrongly connect poor driving performance with only one factor, this is the country issuing the licence, while, as it was clearly stated in the application form, the Claimant earned 5 years no claim bonus as a result of her good performance as a driver. There is no reason for applying a general assumption to the particular case if the circumstances of this case are clearly in contradiction to this assumption.
The difference seems to be caused solely by the fact that the issuing authority of the driving licence was outside Ireland. This was confirmed by three Respondents in their response to the Form ES.1 sent to the Respondent.
It is submitted that the actions of the Respondents are an act of at least an indirect discrimination of the Applicant on the grounds on race and was repugnant to the Freedom of Movement of People enshrined in all of the historic Treaties and the current Treaty on Functioning of the European Union.
The Tribunal now seems to be faced with a number of questions:
It is submitted that sec. 5(2) and Art. 5(2) of the Directive must be interpreted in light of the Test-Achats case (C-236/09) of the Court of Justice of the EU. The principles of the Test-Achats case applied to the race/nationality grounds give, in our respectful submission, an identical result at the Court of Justice reached in relation to discrimination on the grounds of sex.
Prior to the Test-Achats case it was argued that s. 5(2) allows different treatment of men and women based on actuarial data. The European Court of Justice basically held that such a variation in treatment not allowed under the Gender Equality Directive and, more importantly for the case at hand, under the Treaty of the Functioning of the EU.
The race, nationality and citizenship of a particular Member State, just like sex, cannot be a reason for a different treatment. Article 21 of the Charter of Fundamental Rights of the European Union are unambiguous regarding this. The same principles must be applied to the discrimination between the sexes as to the discrimination between nationals of Member States. The ground, on which discrimination is prohibited are recited in one breath in this Article.
The case at hand has additional element than the Test-Achats case (C-236/09). The actions of the Respondent are not only in breach of Art. 21 of the Charter of Fundamental Rights.
The actions of the Respondents are also repugnant to Art. 19, 20, 21 and 45 of the Treaty indirectly hindering the freedom of movement and freedom of movement of workers within the EU by discriminating non-nationals or citizens of the EU Member States from outside Ireland and the United Kingdom. Any acts of the European Union must be interpreted as aimed at combating “discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation”.
As such, the act of the European Union cannot be interpreted as allowing any of the discrimination that occurred in the instant case.
The Complainant is seeking that the Respondent stops this discrimination and/or compensation.
Respondent’s Submission and Presentation
At the outset and before identifying the specific legitimate and statistical risk rating factors upon which the Respondent relied in issuing the separate quotations to the Applicant when the Applicant represented that she was the holder of an EU license on one occasion and where she separately represented that she was the holder of the Irish license on another occasion, it is relevant to acknowledge the basis on which insurers provide insurance cover.
For an insurer, insurance is all about assessing the risk in respect of which insurance is being provided and/or is being sought. The provision of insurance services is fundamentally a commercial business and it has long since been accepted that insurers are permitted and entitled to assess the theoretical risks posed by different groups of people before setting premiums.
Whilst insurance is directed to providing an indemnity to an insured in respect of a risk which materialises and which is covered by the insurance policy, the insurer in providing such insurance cover is concerned to limit the risk exposure to what it is prepared to tolerate, relative to its own objective risk criteria and/or the level of risk which in turn is reflected in the insurance premium set by the insurer if the insured decides to cover the risk in the first instance.
In other words, it is valid and lawful for an insurer to have regard to objective factors, the detail of which may vary, in deciding whether to provide insurance cover at all and/or in deciding the level of premium to be set having regard to the insurer’s assessment of the theoretical and/or risk posed by the party seeking insurance cover. So long as the justification for the differential in the insurance quotation is not deemed to be arbitrary or frivolous, an insurer is entitled to rely on actual and actuarial statistical experience to justify differential pricing between different groups of people seeking insurance cover. An insurer which has regard to legitimate and objective risk rating factors which informs the setting of the insurance premia quoted to a party seeking insurance, is entirely legitimate and valid and cannot legally be impugned.
The Applicant in this referral claims that on the 16th June 2015 she applied online for car insurance with the Respondent. In her first application on the 16th June 2015 she represented that she was a holder of a full EU license and having provided a number of details requested by the Respondent was given an insurance quote of €601. It appears that later on the 16th June 2015 the Applicant sought a further quotation online from the Respondent and represented that she was the holder of a full Irish and UK driving license in respect of which the Respondent issued an insurance quotation of €510.08.
The Applicant submits that the differential in the insurance quotations issued by the Respondent where the Applicant initially represented that she was a holder a full EU driving license and where she subsequently represented that she was the holder of a full Irish and UK driving license amounts to indirect discrimination of the Applicant on the grounds of race and is contrary to section 5(2) of the Equal Status Acts 2000 to 2011. In addition, the Applicant also claims that the section 5(2) of the Equal Status Acts 2000 to 2011 must be interpreted in light of the Test-Achats Case (C-236-09) of the Court of Justice of the EU.
The Applicant also alleges that the differential insurance quotations issued by the Respondent to the Applicant are repugnant to Articles 19, 20, 21 and 45 of the Treaty on Functioning of the European Union.
The Respondent relies on the content of the Respondent’s solicitor’s letters containing the submissions previously submitted on behalf of the Respondent to refute the Applicant’s claim that the differential insurance quotes issued by the Respondent to the Applicant constitute indirect discrimination of the Applicant by the Respondent on the grounds of race and are repugnant to the freedom of movement of people enshrined in the Treaty on Functioning of the European Union.
As with other insurance service providers, the Respondent has regard to the objective factors/justifications identified in the Respondent’s solicitors separate letters in setting the appropriate level of premium for the particular individual seeking insurance cover. The objective fact and rating is that the holder of an EU license presents an entirely different risk profile and indeed a significantly greater risk profile to that of an individual who is the holder of a full Irish license. As the objective factors identified in the Respondent’s solicitors letters clearly impact on the level of risk which is being undertaken by the Respondent, it is entirely appropriate, reasonable and justified for the Respondent to reflect the increased risk presented by the holder of an EU license as against the holder of an Irish full license by way of charging a higher insurance premium to the holder of the EU license. The difference in treatment in such circumstances does not constitute direct or indirect discrimination as alleged by the Applicant.
Indeed, the difference in treatment is a common feature of the insurance industry and in a different context to the present case is underlined with regard to a higher insurance premia being paid by drivers who have not passed their Irish driving test, the holder of provisional Irish licenses, a lapsed full Irish license, and a foreign license whether it be an EU license or otherwise. In addition to these latter objective considerations, all of which increase the risk being faced by an insurer as against the risk presented by the holder of a full Irish license, there is statistical evidence supporting the Respondent’s different treatment of individuals who hold an EU license and individuals who hold a full Irish license.
As stated in the Respondent’s solicitors letters for the years 2012, 2013 and 2014 the position with regard to the frequency of claims and the costs of claims relating to holders of EU licenses are as follows:
Claims frequency for EU license holder was 38% more than full Irish license holders
Claim costs for EU license holders were 36% higher for the same period than compared to full Irish licenses holders.
To ignore the forgoing statistical evidence would involve the Respondent acting in an entirely irrational and uncommercial basis thereby undermining its commercial viability.
The foregoing represents staggering differences in risk profiling and clearly constitute an objective bases, together with the penalty point considerations identified, to justify the Respondent issuing different insurance quotations to the Applicant when she represented that she was the holder of an EU license and separately when she represented that she was the holder of a full Irish license.
The foregoing considerations clearly underline the fact that the differential in insurance quotation is not directed to the race or nationality of the license holder, but is in fact directed to addressing the different risk profile presented by the particular license holder and where the licence is issued all of which impact directly on the risk being assumed by the Respondent as insurer and which informs the level of insurance premium quoted by the Respondent in agreeing to accept the risk.
The misconceived nature of the Applicant’s complaint in this referral is further underlined by the fact that if an Irish person and a Polish person were to seek a quote from the Respondent and their details are identical to include the holding of full Irish licenses, then the insurance quotations issued by the Respondent would be identical, thereby clearly refuting that the Respondent’s pricing of insurance premia has regard to and factors in the race and/or nationality of the individual seeking the insurance quotation.
In addition to the above objective factors which clearly legitimatise and validate the differential quotations issued by the Respondent to the Applicant, there is also the further objective consideration of the penalty points system in this jurisdiction and the materiality and relevance of the penalty point system to the setting of insurance premina. The details of the relevance and materiality of the penalty points system will be outlined in evidence adduced at the hearing by the Respondent.
The Respondent in rejecting the Applicant’s reliance on the decision in the Test-Achats case which addressed the issue of discrimination on the basis of gender has absolutely no relevance to the present issue under consideration and does not at all assist the Applicant in respect of her claim that she has been indirectly discriminated against by the Respondent contrary to the provisions of Article 5(2) of the equal status acts 2000 to 2004
In addition to the foregoing, the Respondent also relies on previous decisions of adjudicators addressing this issue of alleged indirect discrimination by insurers contrary to Section 5(2) of the Equal Status Acts 2000 to 2004 to refute the Applicant’s claim that she has been discriminated against by the Respondent contrary to Section 5(1) of the Equal Status Acts 2000 to 2004.
As the Respondent has identified objective factors justifying the differential in the insurance quotations issued to the Applicant, it is submitted that it is not open to the Applicant to claim that the Respondent has acted in breach of either Equal Status Acts 2000 to 2004, or that Gender Directive (Council Directive 2004/113/EC, 13th December 2004) or the current Treaty on Functioning of the European Union.
It is also to be noted that Article 5(2) of the Gender Directive effectively acknowledged the principle that insurance undertakings can and are permitted to make proportionate differences in individual premiums and benefits underlining the fact that the existence of differential in insurance premia is not in itself evidence of discrimination and cannot in law constitute discrimination where objective factors justifying the differentiation in the insurance quotation.
The Respondent respectively submits that the Applicant’s claim should be dismissed.
I find that the Complainant properly notified the Respondent in good time and so it is appropriate for me to adjudicate upon this complaint.
This complaint referred for investigation depends upon whether or not the Complainant was discriminated against contrary to Section 3(1)(a) and 3(2)(h) of the Acts.
- “On any of the grounds specified... (in this case the race ground).... A person is treated less favourably than another person is, has been or would be treated.
Section 3(2) provides that: as between any two persons, thediscriminatory grounds ... are... (h) that they are of different race, colour, nationality or ethnic or national origins (the ”ground of race”),”
The Complainant based her complaint on the basis of different treatment due to the presentation of an EU versus an Irish driving licence. The Complainant is categorised by the respondent’s administrative system as an EU licence holder on the basis of her Polish licence.
I have a concern that the Complainant misrepresented her position on seeking a quote and alleged falsely that she had a full Irish/British licence.
I note that it is accepted that non Irish/British licence holders but of mainland Europe while deemed European are not necessarily of the same nationality.
There is a reasonable connection with nationality in this complaint and therefore I find that this complaint is on the ground of race.
- Section 5(1) provides that:
A person shall not discriminate in disposing of goods to the public generally or a section of the public or in providing a service, whether the disposal or provision is for consideration or otherwise and whether the service provided can be availed of only by a section of the public.
The burden of proof is set out in Section 38A which provides that: " Where in any proceedings facts are established by or on behalf of a person from which it may be presumed that prohibited conduct has occurred in relation to him or her, it is for the respondent to prove the contrary."
It is accepted that the Complainant obtained two different quotes for the same service. In this case Respondent has provided a higher quote based on the holder having an EU licence rather than an Irish or British one.
I am satisfied that the Complainant has established facts from which it may be presumed that prohibited conduct has occurred in relation to her and she has established a prima facie case of indirect discrimination on the ground of race.
However I find that the Respondent can successfully rebut this prima facie case if they can show that the neutral provision in question is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.
- Section 3(1)(c) of the Equal Status Acts provides:
(c) where an apparently neutral provision puts a person referred to in any paragraph
of section 3(2) at a particular disadvantage compared with other
persons, unless the provision is objectively justified by a legitimate aim and
the means of achieving that aim are appropriate and necessary.
I note that the Respondent replied to the Complainant stating “some time ago we established that EU licence holders in general perform more poorly than full Irish licence holders on our car and van products, hence the difference in premium”. I note that the Respondent provided the following statistical evidence to the hearing as follows:
Claims frequency for EU license holder was 38% more than full Irish license holders
Claim costs for EU license holders were 36% higher for the same period than compared to full Irish licenses holders.
Therefore the differential in the insurance quotation is not directed to the race or nationality of the license holder, but is in fact directed to addressing the different risk profiles presented by the particular license holder and where the licence is issued all of which impact directly on the risk being assumed by the Respondent as insurer and which informs the level of insurance premium quoted by the Respondent in agreeing to accept the risk.
So if indirect discrimination is alleged then it is not enough to look at then price quoted, it has to be in effect a subtle way of charging a particular national a higher price. The only reason for the higher price has to be nationality.
In this case nationality has not been identified other than that of an EU licence holder.
I note that had the Complainant a full Irish licence she would have been quoted a cheaper rate.
Therefore I find that the quote was based not on nationality.
I note the very clear evidence that EU licence holders place a far higher risk to the insurer than the holders of full Irish / British licence holders.
It must be accepted that it is in the insurer’s best interest to effectively manage that risk.
I find that it is clear that the price differential applied by the Respondent is objectively justified by a legitimate aim. There is no question but that it is legitimate for the Respondent to, for commercial reasons determine its premiums for car insurance on the basis of risk characteristics which are objectively justified by actuarial and statistical data.
Regarding the decision in the Test-Achats case, this addressed the issue of discrimination on the basis of gender and I find that it has no relevance to the present issue under consideration.
Section 41(4) of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 25 of the Equal Status Act, 200 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under section 27 of that Act.
I have considered all the submissions, written and oral that were made and in accordance with section 25(4) of the Equal Status Acts, I conclude this investigation and issue the following decision.
I find that the Complainant has established a prima facie case of indirect discrimination on the ground of race.
I have decided that the Respondent has established that there were objective grounds justifying their charges.
I have decided that this complaint was not well founded and that it fails.
Dated: 13th July 2016