Judgments - Regina v. Her Majesty's Commissioners of Inland Revenue (Respondents) ex parte Wilkinson (FC) (Appellant)

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    43.  I have had the advantage of reading in draft the speech of my noble and learned friend Lord Hoffmann and for the reasons he gives I agree that the appeal should be dismissed. In particular I agree, first, that the commissioners had no power under section 1 of the Taxes Management Act 1970 to make extra-statutory allowances to widowers to match those made to widows and, secondly, that the commissioners are therefore protected against this domestic law claim by section 6 (2) (a) of the Human Rights Act 1998. (For the reasons I have set out at some length in the parallel case of Hooper [2005] UKHL 29 I respectfully disagree with the reasoning in para 23 of my Lord's speech: had the commissioners' powers under section 1 of the 1970 Act been wider then I agree that they would still have been protected under section 6 (2) but rather because it would have been unlawful for them to exercise that power inconsistently with Parliament's manifest will that widows alone should benefit than because section 6 (1) simply "does not apply" to the allowances made to widows). I further agree with what Lord Hoffmann says at paras 24-28 of his speech with regard to just satisfaction, although on this particular issue I wish to add a few thoughts of my own.

    44.  Discrimination claims under article 14 of the European Convention on Human Rights seem to me to present particular difficulties when it comes to the requirements of just satisfaction (whether pursuant to article 41 of the Convention or section 8 of the 1998 Act). The principle of restitutio in integrum applies comparatively straightforwardly in non-discrimination cases: the claimant is prima facie entitled to recover whatever financial loss he can prove was directly consequent on the violation of his rights. The award of compensation to homosexuals discharged from the armed forces in breach of article 8 for the loss of earnings and pension rights are good examples of this—see Lustig-Prean & Beckett v United Kingdom (2000) 31 EHRR 601 and Smith and Grady v United Kingdom (2000) 31 EHRR 620. Discrimination claims, however, even those where the discrimination is purely as to financial benefit, by their very nature are different. Over the period complained of the applicant(s) (call him or them A) ex hypothesi will have been treated less favourably than another/others (B). The problem is not so much whether the court should level up or level down as it is sometimes put. There can be no question of levelling down: B cannot retrospectively be deprived of benefits already received. The problem is rather whether, in respect of the period complained of, just satisfaction requires that A should recover the same financial benefits as received by B. Sometimes it will be clear that he should; sometimes clear that he should not. The decisions of the European Court of Human Rights respectively in Darby v Sweden (1990) 13 EHRR 774 and in Van Raalte v The Netherlands (1997) 24 EHRR 503 conveniently illustrate each of these extremes. Other cases, however, will be less clear.

    45.  In Darby v Sweden the claim related to a two-year period during which A, a Finnish citizen, working in Sweden but only temporarily resident there, was liable for full municipal tax including a special tax payable to the Church of Sweden. Had he been formally registered as resident in Sweden, as a non-member of that Church, A would have been liable for only 30% of the special tax. Having found the distinction in treatment by reference to residence unlawful the court, perhaps unsurprisingly, found A entitled to repayment of the excess tax paid (70% of the special tax) together with interest.

    46.  In Van Raalte A was an unmarried childless man over 45 complaining of a law which exempted unmarried childless women over 45 from paying contributions under the General Child Benefits Act. Apart from the exempted women, the entire adult population was subject to the Act, both as contributors and as potential beneficiaries. The court concluded (para 44) that "irrespective of whether the desire to spare the feelings of childless women of a certain age can be regarded as a legitimate aim, such an objective cannot provide a justification for the gender-based difference of treatment in the present case". It was held, however, that A was not entitled to retrospective exemption from his contributions under the Act. Even without the unlawful discrimination he would still have been paying his contributions. He was therefore no worse off as a result of the discrimination (save, of course, to the very limited extent that his contributions, in common with those of every other contributor, had doubtless been marginally larger to compensate for the lack of contribution by the limited class of exempted women).

    47.  Looking just at these two cases it is tempting to draw a simple inference: where, as in Darby v Sweden, there clearly is a case for preferential treatment of a certain group and A falls into it, he should recover by way of just satisfaction the same benefit as the rest of the group. (In Darby v Sweden, of course, although non-members of the Church of Sweden were justifiably relieved of the bulk of the relevant tax, there was no case for treating non-members differently according to whether they were permanently or only temporarily resident in Sweden.) Where, however, as in Van Raalte, there is no case for treating anyone preferentially (ie group B has wrongly benefited) then A should not recover. This is tantamount to asking simply whether the real complaint is that one group has been wrongly advantaged over the general body of contributors or whether the complainant's group has been wrongly deprived of a legitimate advantage. On this approach the present appellant would clearly fail whereas the widowers in the parallel case of Hooper (where under the new legislative regime bereavement payments and bereaved parents allowances are now made to widows and widowers alike) would succeed.

    48.  On analysis, however, this seems perhaps too simplistic a view. In any claim against a public authority for financial compensation in respect of past discrimination it must be remembered that the general public (often the general body of taxpayers) will be footing the bill. In determining the requirements of just satisfaction, just as in the application of the Convention as a whole, regard should be had not only to the victim's rights but also to the interests of the public generally. Take a case where A establishes discrimination on the basis that he should have been placed in the same class as B, both of them advantaged financially over class C. To compensate A for his past financial disadvantage vis à vis B would be costly for C (the non-benefiting class of taxpayers)—disproportionately so if class A is large, classes B and C comparatively small. Whether this would be fair to C would depend upon the justification for advantaging A and B over C in the first place, and indeed for doing so to the extent that B was originally advantaged over A and C. It might well be fairer overall to leave A uncompensated in respect of the past discrimination against him. At the very least, bearing in mind that class A are taxpayers too, fairness to C might require that class A's compensation be reduced to reflect the fact that they too would have had to pay more tax to fund their own additional benefits. Just these considerations, indeed, may yet arise in the parallel case of Hooper were a claim for just satisfaction now to be advanced in Strasbourg.

    49.  Moreover, by the same token that it will not invariably be right to compensate the complainant even where there is a case for preferential treatment of one class and A falls into it, it will not invariably be inappropriate to compensate the complainant even though there was no case for anyone to be treated preferentially in the first place. Take, for example, the case of a public body unjustifiably paying its male employees more than women doing the same job. It could not then reasonably be argued that the men's excess wages represented an unjustified windfall which should not properly be paid to the women also. Such an argument, indeed, would almost certainly fail even if the employer proved that, had all employees been paid the same, this would have been at the women's (lower) rate—a plausible case if, say, the women employees substantially outnumbered the men. This example, I may say, formed the bedrock of Miss Rose's argument in respect of just satisfaction in the present appeal.

    50.  What, then, distinguishes the employee case from Van Raalte itself? The critical feature of the Van Raalte case which to my mind distinguishes it from the employee case is that the complainant in Van Raalte was in essentially the same position as all other contributors to the scheme (save only for the wrongly exempted group). Realistically the discrimination was no more against him than against the others: there was simply no case for exempting anyone. It would thus have been most unfair to the general body of contributors (category C) to have required them to subsidise not merely the exempted class of women but also the equivalent men. That, however, is not the position in employment cases. In the postulated employment case the discrimination can clearly be seen to have been against the less well-paid women. If the men doing the same work were thought to be worth the higher wage, so too were the women. There can be nothing unfair in making the employer compensate the women in respect of the past discrimination against them (although, of course, in the case of a public authority, the compensation will indirectly fall to be paid by the general public).

    51.  Into which category, then, does the present appeal fall? Is the situation here akin to that in Van Raalte or to the employment type of case? To my mind there can be only one answer to this question: the position here is just as it was in Van Raalte. The Court of Appeal rightly characterised the widows bereavement allowance as "an anachronistic relic of a tax regime abandoned by 1994" and rightly concluded that the discrimination "provided widows with an unjustified advantage not merely over widower taxpayers but over all taxpayers."

    52.  In a case like this, therefore, the past discrimination suffered by widowers is less (and less deserving of compensation) than would be the discrimination suffered by the general body of taxpayers were they now required to fund this unjustified benefit not only for qualifying widows but for widowers too.


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