The European Court of Human Rights upheld in part a complaint by four widowers that the refusal of their claims for widow's bereavement allowance was discriminatory, contrary to their rights under the European Convention on Human Rights (ECHR).

Facts

The taxpayers were all widowers whose wives had died between 1995 and 1998 when ICTA 1988, s. 262(1) governed widow's bereavement allowance (WBA). At that time, married couples were taxed as a single entity and a man was entitled to a married man's allowance (MMA) in respect of his wife's earnings which he could continue to claim in the year of his wife's death. The aim of the WBA was to enable widowed women to claim the equivalent of the MMA, rather than being restricted to the single person's allowance.

Following the introduction of independent taxation of spouses in 1990–91, each partner was entitled to claim a personal allowance but the husband retained the right to claim a married couple's allowance. From 1993–94, a married woman could share that allowance with her husband. The Finance Act 1999, s. 34 finally abolished WBA for deaths occurring on or after 6 April 2000. The taxpayers formally applied for WBA after the Human Rights Act 2000 came into force but each claim was rejected.

In R v IR Commrs, ex parte Wilkinson [2005] BTC 281, the House of Lords had concluded that a claimant who had been refused WBA could not have that decision overturned under the Human Rights Act. Their Lordships also refused to award just satisfaction in respect of pecuniary damage since Parliament would have abolished WBA if it had had proper regard to ECHR, art. 14. Accordingly, the taxpayers brought a complaint before the European Court of Human Rights.

Issue

Whether the difference in treatment between widows and widowers violated the taxpayers’ rights under the ECHR; and whether the taxpayers were entitled to just satisfaction in respect of pecuniary damage.

Decision

The European Court of Human Rights (holding that there had been a violation of the ECHR but dismissing the claims for just satisfaction) said that the Government accepted that WBA fell within the ambit of art. 1 of Protocol 1 and that art. 14 was, accordingly, engaged. They did not seek to argue that the continued availability of the allowance to widowed women only between 1994 and 2000 could be justified, but denied that that had been to the detriment of widowed men in particular. WBA had originally been introduced to compensate for the unfairness which would arise from the fact that, if a husband died early in a tax year, his widow would be entitled only to a single person's allowance, whereas a widowed husband would continue to receive the higher married man's allowance in the year of his wife's death. After the introduction of the new regime of independent taxation in 1990–91, the allowance became an anachronism and ceased to be objectively justified and a small group of taxpayers, widows, received an unjustified advantage over the wider population of taxpayers.

The taxpayers complained of a difference in treatment on the basis of sex, which fell within the non-exhaustive list of prohibited grounds of discrimination in art. 14. Article 14 did not prohibit a member state from treating groups differently in order to correct ‘factual inequalities’ between them; in certain circumstances a failure to attempt to correct inequality through different treatment might in itself give rise to a breach of the article. A difference of treatment was, however, discriminatory if it had no objective and reasonable justification; in other words, if it did not pursue a legitimate aim or if there was no reasonable relationship of proportionality between the means employed and the aim sought to be realised. WBA had been intended to rectify the inequality between widows and widowers, but became obsolete when independent taxation of married men and women was introduced from 1990–91 and spouses were given the choice, from 1993–94, as to how to share the married couple's allowance. The Government had not attempted to justify the availability of the WBA only to female widows from 1990–91 until its abolition in respect of deaths occurring after 6 April 2000. The court did not consider that, during the period when the taxpayers were denied the allowance, the difference in treatment between men and women as regards the WBA was reasonably and objectively justified. It followed, in all the circumstances, that there had been a violation of ECHR, art. 14 (which prohibited discrimination on grounds of sex), taken in conjunction with art. 1 of Protocol 1 (which provided for the peaceful enjoyment of possessions).

The taxpayers had argued that they were entitled to compensation for the discriminatory refusal to grant them WBA, in the amount that they would have received had they been widows, plus interest. Such an approach was in their view consistent with ECJ case law, which had on a number of occasions addressed the remedy for unlawful discrimination and concluded that it should be by way of ‘levelling up’ (i.e. treating the complainant in the same way as the favoured group) rather than ‘levelling down’ (giving no compensation on the basis that neither class should have received the benefit).

The principle underlying the provision of just satisfaction was that the applicant should as far as possible be put in the position he would have enjoyed had the violation found by the court not occurred. It did not inevitably follow from a finding of a violation of art. 14 that an award of just satisfaction had to be made to reflect any pecuniary damage allegedly suffered as a result of the differential treatment. Whether such an award was made would depend on all the circumstances of the case, including the field in which the discriminatory treatment arose; whether the applicant belonged to a similarly affected class of persons; the size of any such class; the nature of the legislative provision, if any, giving rise to the discriminatory treatment; and, where such discrimination had been eliminated as the result of an amendment of the relevant provisions, the nature of, and reasons underlying, the amendment.

The present case concerned the differential treatment of bereaved men and women in the years from 1994 to 1999 in respect of the grant of tax allowances under the 1988 Act. The taxpayers, as widowers, belonged to a large class of persons who were similarly denied the allowances granted to widows during that period. The allowances were originally introduced in 1980, when married couples were taxed as a single entity, to enable widows to claim the equivalent of the married man's allowance in the year of bereavement and thus to equate their position with that of widowers. However, when the independent taxation of married men and women was introduced, the underlying purpose of the WBA ceased to exist and the allowance was removed in the 1999 Act as being an anomalous feature of a tax regime abandoned in 1994, which had unduly favoured widows, not only over widowers, but also over other taxpayers.

In those circumstances, there was no reason to remedy the inequality of treatment by ‘levelling up’ and awarding the value of tax benefits which had been found to be unjustified. Accordingly no award would be made by way of just satisfaction in respect of the pecuniary loss alleged to have been suffered (SA Dangeville v France [2005] BTC 5,599 and Derby v Sweden (1990) 13 EHRR 774 considered).

Further claims had been made for anguish and loss of sleep caused by the discrimination over a period of years and for distress and frustration. However the taxpayers had produced no evidence to substantiate their claims. The court did not accept that they were caused real and serious emotional damage as a result of being denied a tax allowance of the relatively low value of the WBA. No award was accordingly made under that head.

European Court of Human Rights.
Judgment delivered 14 November 2006.