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ment, as well as to social assistance, in so far claims by judicial process, possibly after as it is intended to supplement or replace the recourse to other competent authorities'. abovementioned schemes.

6. The principle of equal treatment, as laid 9. Finally, Article 7(1 )(a) provides that the down in Article 4(1) of Directive 79/7 — directive is to be without prejudice to the which the Court of Justice has held to have right of Member States to exclude from its direct effect2 —, means that there is to be no scope 'the determination of pensionable age discrimination whatsoever on grounds of sex for the purposes of granting old-age and either directly,., _qr indirectly by reference retirement pensions and the possible conse- inter alia to marital or family status, in par- quences thereof for other benefits'. ticular as regards the scope of the schemes and the conditions of access thereto, the obligation to contribute and the calculation of contributions, the calculation of benefits and the conditions governing the duration and retention of entitlement to benefits. The national provisions

7. Article 5 places the Member States under an obligation to take the measures necessary 10. In the United Kingdom, section 37(1) of to ensure that any laws, regulations and the Social Security Act provides for the pos- administrative provisions contrary to the sibility of granting, subject to certain condi- principle of equal treatment are abolished. tions, an 'Invalid Care Allowance' (hereinaf- ter 'ICA') to a person who is not gainfully employed and is regularly and substantially engaged in caring for a severely disabled relative.

13. Although she had been engaged since 1968 in caring for her disabled daughter, she was over the retirement age when she sub- mitted her claim (she 'was then 63) and could not be treated as if she had been entitled to ICA before reaching that age. 17. That decision set aside the ruling of the Tribunal. Following the submission of new evidence proving that Mrs Sutton was in part-time employment when she began to care for her daughter, the Commissioner accepted that she was indeed part of the 'working population' within the meaning of 14. Mrs Sutton then appealed against that decision to the Social Security Appeal Tribu- nal (hereinafter 'the Tribunal'), claiming that 3 — Amongst which were Joined Cases 48/88, 106/88 and 107/88 section 37(5) of the Act unlawfully discrimi- Achterberg-te Riele and Others v Sociale Verzekeringsbank nated against her on grounds of sex, contrary [1989] ECR 1963, decided on 27 June 1989, and Case C-328/91 Secretary of State for Social Security v Thomas and to Directive 79/7, since it excluded a woman Others [1993] ECR 1-1247, decided on 30 March 1993. The first case concerns the concept of 'working population' in her situation from entitlement to ICA, in within the meaning of Article 2 of Directive 79/7. The sec- circumstances where a claim by a man of the ond case lays down that the conditions for refusing ICA as laid down in section 37(5) of the Social Security Act cannot same age would be granted. be justified under Article 7(l)(a) of Directive 79/7.

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Article 2 of Directive 79/7. Moreover, he 20. The grant of such interest was the acknowledged that, after the judgment in subject-matter of an application, made by the Thomas and Others,1 Article 7(l)(a) of Child Poverty Action Group on behalf of Directive 79/7 could not be relied upon as Mrs Sutton, which was rejected on 19 Febru- against Mrs Sutton in order to justify a ary 1994 by the Secretary of State for Social refusal to award ICA to women who, like Security on the ground that under national her, had reached the retirement age, namely law no interest was due on arrears of ICA. 60, when men of the same age who had not reached the retirement age, fixed at 65 in their case, were entitled to it.

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(iii) is interest to be calculated only on the the payment of 'interest' on arrears of social balance which falls due after off-setting, security benefit in the light of Directive 79/7. in accordance with national overlapping rules, any other benefit payments made for the same period?'

25. However, Mrs Sutton goes beyond the framework as so defined and relies 6 — in 22. Mrs Sutton, the United Kingdom Gov- the alternative, it would seem, should the ernment and the Commission have submit- Court not accept her line of argument, based ted written observations, as have the Swedish on Marshall II, concerning the grant of and German Governments. interest — on the application of the prin- ciples laid down in the judgment in Francov- ich and Others 7 concerning the liability of Member States for harm caused to individu- als by breaches of Community law for which they can be held responsible. She claims in Discussion that regard that the United Kingdom Gov- ernment infringed its obligations under the EC Treaty in that it failed properly to imple- ment Directive 79/7, as a result of which she is entitled to compensation in the form of the payment of damages.

23. In my view, it is necessary, first of all, to define the precise scope of the questions sub- mitted by the High Court. They require clarification in two respects.

26. As the Commission points out by way of a preliminary observation, 8 the High Exclusion of any discussion concerning the Court has not referred any question relating liability of the Member States to the award of damages in the light of Fran- covich.

Rejection of the argument based on Marshall That is inherent in the nature of the prelimi- II nary reference procedure established by Article 177 of the Treaty, by which those who drafted it intended to provide for '... direct cooperation between the Court of Jus- tice and the national courts based on a non- contentious procedure irrespective of any steps taken by the parties to the proceedings 30. Furthermore, as the main proceedings do and in the course of which such parties are not concern any other form of reparation, I merely invited to submit observations within am not at all swayed by the argument the legal framework set out by the court advanced by Mrs Sutton in support of her making the reference'. , 0 claims, to the effect that there is a parallel between her situation and that which gave

9 — Case 44/65 Hessische Knappschaft v Singer [1965] ECR 965, 970. 10 — Order of 18 October 1979 in Case 40/70 Sirena v Eda 11 — Opinion of Advocate General Gand in Case 44/65 Hessiche [1979] ECR 3169, third paragraph. Knappschaft v Singer, cited above (p. 975, sixth paragraph).

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for financial compensation in preference to two directives form part of the same pro- reinstatement, ensure that it is '... adequate, gramme for the implementation of the prin- in that it must enable the loss and damage ciple of equal treatment and the wording of actually sustained as a result of the discrimi- the two articles most immediately relevant natory dismissal to be made good in full in (Article 6 in both directives) is, for all prac- accordance with the applicable national tical purposes, identical. She considers that a rules'. ' 6 person making a social security claim on the basis of Directive 79/7 must be granted the same right to interest and the same degree of protection against infringements of the prin- ciple of equal treatment as a person who bases his claim for compensation on Direc- Consequently, and in reply to the two ques- tive 76/207. 19 tions submitted to it, the Court held that the fixing a priori of an upper limit on the amount of compensation cannot ensure adequate reparation for the loss and damage suffered u and that '... full compensation for the loss and damage sustained as a result of discriminatory dismissal cannot leave out of 37. However, it seems to me, a view shared account factors, such as the effluxion of time, by the United Kingdom Government, 20 that which may in fact reduce its value. The despite the undeniable link that exists award of interest, in accordance with the between Directive 76/207 and Directive 79/7, applicable national rules, must therefore be the subject-matter of this case differs signifi- regarded as an essential component of com- cantly from that of Marshall II. pensation for the purposes of restoring real equality of treatment.' l s

the form of financial compensation, that whatsoever to the award of compensation in compensation had to be appropriate and the form of damages. Unlike the abovemen- constitute full compensation which took into tioned cases, the present case is not con- account the effluxion of time when the cerned with a penalty system established by amount of damages to be paid by the national law. employer was assessed. In that regard, the Court applied the principle previously laid down in its judgment in Von Colson and Kamann 2i that '... if a Member State chooses to penalize breaches of [the prohibition of discrimination laid down in Directive 76/207] by the award of compensation, then 42. The arrears of ICA paid by the United in order to ensure that it is effective and that Kingdom to Mrs Sutton cannot be treated in it has a deterrent effect, that compensation the same way as damages granted as com- must in any event be adequate in relation to pensation for loss. Payment of those arrears the damage sustained ...'. 22 merely restored to Mrs Sutton her right to an award by an administrative authority of benefit to which she was entitled under a system of social protection intended to assist persons who satisfy the criteria conferring entitlement to such benefits. 40. In so doing, the Court of Justice in no way laid down a general principle to the effect that any restoration of equality of treatment presupposes payment of interest on account of the effluxion of time. The Court laid down such a requirement only when such restoration took the form of 43. Although it is true that, as a result of the financial compensation imposed as a penalty, initial refusal to grant ICA to her prior to and it emphasized that 'the particular cir- the outcome of her action, she was the sub- cumstances of each breach of the principle of ject of discrimination contrary to the prin- equal treatment should be taken into ciple laid down by Directive 79/7, that situ- account'. 23 ation was remedied in conformity with national rules. Unlike the case of discrimina- tory dismissal, that remedy did not take the form of compensation, but merely involved the restoration of her right to receive a social benefit. 41. The main proceedings in this case do not concern 'payment of compensation by way of reparation' for loss or damage and the High Court's question makes no reference

50. The first approach, which supports Mrs Sutton's contention, is based on the need to ensure the full effectiveness of the principle of equal treatment. It may be set out as follows. 47. As a result of these initial considerations, it is possible to define more precisely the subject-matter of the questions submitted by the High Court. There is no need either to consider whether there is any liability on the 51. Since the judgment in Defrenne III,26 part of the United Kingdom entailing the the Court has taken the view that generally award of damages pursuant to the Francov- '... the elimination of discrimination based on ich case or to apply Marshall II concerning sex forms part of [...] fundamental rights', 27 the award of interest, characterized by the observance of which the Court has a Advocate General Van Gerven as 'compensa- duty to ensure. tory', on a sum accorded by way of repara- tion for the loss suffered. 24

25 — Ibidem, footnote 45. 26 — Case 149/77 Defrenne v Sabena [1978] ECR 1365. 24 — Point 27 of the Opinion in Marshall IL 27 — Paragraph 27.

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57. It is said to follow from that reasoning that, in order to ensure that the principle of equal treatment is fully effective, it must be possible under Community law for an indi- vidual to claim interest on the amount paid by way of arrears of benefit where the delay in paying the benefit is the result of discrimi- nation prohibited by Directive 79/7.

54. However, besides conferral of the same right, that principle also requires that the amount of benefit so granted be the same, whether it is granted to a man or a women. 58. That would not entail laying down a general principle of Community law which 28 — Judgment in Thomas and Others (paragraph 8); sex also the systematically required the payment of inter- judgments in Marshall /, cited above (paragraph 36), and in Case 262/84 Beets-Proper [1986] ECR 773, paragraph 38. est on social security benefits paid after their

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due date and which would be binding on be regarded as having ensured the effective- national legal systems. The principle would ness of the principle in practice. In my view, merely have to be applied to situations in the question whether Mrs Sutton also has a which the delay in the payment of benefit right to interest on the amount of that ben- arose from an infringement of the principle efit cannot, in the absence of specific rules, of equal treatment. be answered by reference to Community law, but should be left to each Member State to be assessed in conformity with its national provisions.

59. However, I am not swayed by that approach.

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65. In general terms, the Court has also measures for applying the Community rules stated that 'according to the general prin- must be taken, in the context of the national ciples on which the institutional system of systems, by national institutions and in the Community is based and which govern accordance with the procedures and powers the relations between the Community and inherent in those systems. the Member States, it is for the Member States, by virtue of Article 5 of the Treaty, to ensure that Community regulations ... are implemented within their territory. In so far as Community law, including its general 68. The example, given in the course of the principles, does not include common rules to proceedings, of the provisions applicable in this effect, the national authorities when Germany and Sweden concerning the pay- implementing Community regulations act in ment of interest on arrears of social security accordance with the procedural and substan- benefits illustrates the diverse approaches tive rules of their own national law; however which may be adopted at national level when ... this rule must be reconciled with the need implementing the principle of equal treat- to apply Community law uniformly ...'. 31 ment laid down by Directive 79/7. Thus, in Sweden, as in the United Kingdom, it is not possible to obtain interest on such arrears. The Federal Republic of Germany, for its part, has instituted another system, which permits the grant of interest at a standard rate of 4% in respect of 30-day periods 66. Moreover, in the context of that general between the date on which the benefit is due obligation, the third paragraph of Article 189 and the date of payment. of the Treaty leaves to the Member States the choice of the ways and means of ensuring the implementation of directives. 32

71. Thus, national rules clearly may not be applied in such a way as to wholly negate the exercise of a right based on Community law. That is why, for example, the Court consid- ered that '... until such time as Directive 73. Those requirements seem to me to have [79/7] has been properly transposed, a been fulfilled in the present case. defaulting Member State may not rely on an individual's delay in initiating proceedings against it in order to protect rights conferred upon him by the provisions of the directive and that a period laid down by national law in which proceedings must be initiated can- not begin to run before that time'. 3 4 Simi- 74. As to the first requirement, the law of larly, the Court has observed that '... a Mem- the United Kingdom does not draw any dis- ber State may not maintain a [national tinction according to whether an individual's provision depriving women of the right to right to a social benefit is derived from pro- claim benefits which men in the same situa- visions of national law or Community law. tion continue to receive] which ... gives rise According to the evidence adduced during to discrimination within the meaning of the proceedings, social security benefits in Article 4(1) of Directive 79/7 between men the United Kingdom never include interest. and women'. 35 Whatever the situation of a person claiming a social security benefit, no adjustment is pro- vided for at national level to take account of inflation. A man, in a situation such as that of Mrs Sutton, who, because of an infringe- ment or misapplication of the national rules, has experienced a delay in the grant of the 72. Above all, however, the Court has laid social security benefits to which he was down two minimum requirements which the entitled, could not, any more than Mrs Sut- domestic legal system of each Member State ton, plead that delay so as to claim interest in must satisfy when, in the absence of Com- order to take account of the change over the munity rules, it introduces the procedural course of time in the value of the amount so conditions designed to ensure the protection granted.

75. As to the second requirement, Mrs Sut- interest, two parallel systems would exist ton's action tends to show that the national alongside one another. An individual •whose system does not render impossible in prac- right to benefit had been recognized in tice the exercise of the rights which she accordance with Community law could derives from Community law. The discrimi- obtain interest on the amount paid, if there natory situation in which she had been had been a delay in recognizing that right. placed at the outset and which arose from On the other hand, an individual who the original refusal to grant ICA to her, con- derived that right not from Community law trary to the principle of equal treatment but from his own national legal system applicable to her in accordance with Direc- would be refused payment of interest on the tive 79/7, was ultimately remedied since her sums awarded in those countries in which no right to the award of that benefit under such right is provided for. national rules has been recognized.

77. The conclusion which I have reached 76. A final remark, one already made at the renders devoid of purpose any examination hearing by the representative of the Swedish of the other three questions submitted by the Government: If my argument were not fol- High Court, which presuppose an affirma- lowed, and on the assumption that in a situ- tive answer to the first question. The date ation such as that of Mrs Sutton Community from which interest — if provided for under law requires interest to be paid on arrears of national law — must be paid, the rate of social security benefits, there would be a risk interest applicable and the basis for calculat- of 'reverse' discrimination. In Member States ing that rate are matters in respect of which such as the United Kingdom or Sweden, reference should be made to national provi- which do not provide for the grant of such sions.