Friday 24 July 2015

When all the people in a district are victims of race discrimination: CJEU ruling in CHEZ v Nikolova

Simon Cox, lawyer at the Open Society Justice Initiative* 

Last week’s CJEU judgment in C-83/14 CHEZ v Nikolova shows the important role of the CJEU to advance the struggle of Roma communities against systematic discrimination by businesses and Governments. Moreover, the Grand Chamber ruling on equal treatment establishes a powerful tool for districts marginalized by powerful actors.

The case is a great example of how the CJEU can empower lower national courts. The Bulgarian Anti-Discrimination Commission had repeatedly condemned as discriminatory the practice of electricity company CHEZ (aka CEZ) of placing meters out of reach of consumers only in Roma districts. But CHEZ – a powerful company in Bulgaria and Czech Republic - had persuaded the Supreme Court to reverse these rulings. To go over the head of the Supreme Court, the Anti-Discrimination Commission referred questions to the CJEU in Belov. But the CJEU ruled the Commission was not a court and rejected the reference as inadmissible. So the Sofia Administrative Court used the Nikolova case – an appeal by CHEZ already before it – to refer similar questions. This led to CHEZ judgment, in which the CJEU – though charged only with interpreting the law – helps the national court with a clear evidential and factual path to draft a judgment to survive further appeal.

Ms Nikolova is not Roma. Two arguments were made against her because of this. First, that a practice affecting a district could only be indirectly discriminatory on grounds of ethnic origin if everyone in the district had that ethnic origin. Second, that Ms Nikolova could not complain of discrimination. CHEZ accepted that the idea of ‘discrimination by association’ could extend the category of persons beyond those of Roma origin, but denied Ms Nikolova was sufficiently ‘associated’ with her Roma neighbours.

The Court rejected these arguments, ruling that the purpose of the Directive is to end discrimination on grounds of racial or ethnic origin, not only to protect individual members of groups who are targeted by discrimination (para 56). Accepting Ms Nikolova’s arguments, the CJEU repeated the passage from paragraph 50 of Coleman affirming that there is discrimination against any person who, on account of those grounds, suffers less favourable treatment or a particular disadvantage – regardless of the race or ethnic origin of that person. So, if a measure against a district is based on grounds of the Roma origin of the district’s majority, then the minority in that district are also victims of that discriminatory measure.

Through this approach, the CJEU affirms that the principle of equal treatment empowers every affected individual – and the courts - to end discrimination by all available means, urgently and effectively. Simplifying the law strengthens the ability of oppressed communities to combat discrimination. Challenges will surely continue to be made predominantly by people with the race or ethnicity on which the discrimination is based. But the court defeats CHEZ’s attempt to require that applicants ‘prove’ their own ethnicity and limits the enquiry to whether there is discrimination and if so whether this discrimination affects the claimant.

The Court ruled that CHEZ’s practice is direct discrimination, if the ethnicity of the majority is the reason for the practice, for example, if CHEZ selected the districts because of their Roma population (para 76).

The court made a fundamentally important ruling on indirect discrimination: this requires any measure disadvantaging a Roma majority district which is not applied to non-Roma majority districts to be objectively justified. CHEZ wanted a narrow interpretation of the comparator district, arguing that Ms Nikolova’s district could only be compared to districts with similar levels of interference with electricity meters. The Court rejected this, ruling that the appropriate comparators are other urban districts provided with electricity by CHEZ (para 90).

These rulings on ‘district discrimination’ are very powerful tools. Politically weak communities may be treated badly by government or business in areas like transport, power, schooling and other amenities. Where this differential treatment follows differences in ethnic make-up of districts, then groups or individuals in the district can use the ruling to bring discrimination claims. Courts can order disclosure of documents, to see if race was a factor in decision-making, as the CJEU affirmed at paragraph 78. Where it was not a factor, the CJEU ruling on comparators means authorities must show that the objective differences between the districts justify the differential treatment. They may struggle to justify denial of transport provision or electricity connection, or extortionate insurance or service charges.

The final important piece of the judgment is justification. The Court ruled that, even if race was no factor in CHEZ’s decisions, the practice was seen by others as effectively labelling a Roma community as electricity thieves, regardless of their payment history and behavior. In the context of anti-Roma stereotypes, the measure was seriously harmful. Agreeing with Ms Nikolova, the Court ruled that such a practice is incapable of justification. The community has a right under EU law to enjoy access to electricity “in conditions which are not of an offensive or stigmatising nature and which enable them to monitor their electricity consumption regularly”: para 128.

What happened to the notion of ‘discrimination by association’? The CJEU accepted Ms Nikolova’s argument that this is not part of EU law. It was the label attached by practitioners and academics to the Coleman judgment, but not one the Court had adopted. Like paragraph 50 of Coleman, which the court cites, the Nikolova judgment makes no mention of ‘by association’.  Dee Masters and Siȃn McKinley have argued that this approach makes indirect discrimination unworkable in certain situations. A coach reservation fee bears more heavily on people whose disability gives rise to a need to be accompanied. The concept of ‘association’ is needed, they argue, to limit the class of potential claimants to persons needed to accompany the disabled person. But this scenario is different from Nikolova, where the measure applied only to users in the majority-Roma districts, thereby putting all those users at a disadvantage when compared with users in a different district. In the coach scenario, the charging practice applies to all coach passengers. The differential disadvantage arises from the disability of the passenger, not their membership of the larger affected group. The passenger with a disability can complain about the negative impact of the fee for their seat and that for the companion. Indeed, the companion may also argue that the principle of equal treatment has been wronged as regards them. But a person who has neither a relevant disability nor is a companion of such a person is not affected by a differential impact on grounds of anyone’s disability. Ms Nikolova was – she had a disadvantage compared to users in non-Roma districts.

CHEZ has responded to the judgment by pointing to recent deaths by electrocution in other parts of Bulgaria of people attempting to make irregular connections: but it has not made meters inaccessible in these districts. EVN, a different Bulgarian electricity provider, contradicted CHEZ’s concerns about electricity theft. In the majority-Roma district in Stoliponovo – where EVN put the meters at a normal level some years ago - 95% of charges are paid. According to EVN, the real problem with electricity theft in Bulgaria is professionals and rich people running hotels, pubs and ski resorts.

The case now returns to the Sofia Administrative Court, where Ms Nikolova will seek an order that CHEZ restore the meters to their normal height for all users in her district.

*Simon Cox is a lawyer at the Open Society Justice Initiative and represented Ms Nikolova before the CJEU. The Open Society Justice Initiative works to make law a more effective tool against racial discrimination.

Barnard & Peers: chapter 20 
Photo: Bjorn Steinz, Open Society Foundation


  1. Steve,
    I know this is not relevant to this post, but I wonder if you can clear something up for me. I have seen some scaremongering on the web, and I am engaged in debate about this. Some uninformed people are saying that there is a "new Lisbon" treaty on the cards. I decided not to be pedantic and tell them that it would not be called the Lisbon Treaty, as the Lisbon treaty is only amendments to the TFEU. I have heard of no such plans for any new treaty changes. Also, I am under the impression that treaty changes take several years before they can be voted upon, as evidenced by the fact Mr. Cameron cannot get treaty change before the referendum. Please can you clear this up for me?

    1. There are no discussions on a Treaty amendment ongoing or imminent. There might be at some point in the next few years to deal with single currency issues, Cameron's proposals (after the referendum vote) or other issues (or a combination of these) but that is not certain at the moment. I can't believe that this would be called the 'New Lisbon Treaty'.

    2. Thanks, Steve.
      I was of the same opinion. I am certain that even with the EUs covert methods of operation and future Treaties would have been publicised.

    3. It's simply impossible to draft Treaty amendments covertly, there are too many formal steps to go through from the very start of the negotiation process. Starting with the Treaty of Nice negotiations most drafts circulated during Treaty negotiations are put online quickly. Ratification of Treaty amendments has to go through national parliaments; that can't be done covertly either.

  2. wonders in wonder7 August 2015 at 11:46

    I wonder if the national courts are really empowered by the EU court. Is it not so that they are empowered by the principle of state sovereignty since the peace in Westphalia. The states in turn has delegated certain powers to the EU institutions.
    The national courts therefore should only have the powers that their national constitutions gives them, but in certain legal acts (EU law) an additional court is added in the mix (the EU court) which only has powers to finally interpret the EU law in the light of the EU constitution. In national law matters the national courts have their old powers intact.
    I am afraid that saying "CJEU can empower lower national courts." risks confusing the matters (if you agree with me in the sources of power)

    1. But that is what the CJEU traditionally does, and lower national courts go along with it because it is a route to boosting their role within the national judicial system. Karen Alter has written about this process in detail.