OPINION OF MR ADVOCATE-GENERAL WARNER

DELIVERED ON 19 NOVEMBER 1975

My Lords,

On 18 January 1952 there was enacted in the Netherlands a statute, the ‘Wet Assurantiebemiddeling’ or ‘WAB’, concerning insurance brokers and others carrying on business as intermediaries in the insurance field. This case, which comes to the Court by way of a reference for a preliminary ruling by the College van Beroep voor het Bedrijfsleven, raises a question as to the compatibility of a provision of that statute with Community law, and in particular with Articles 59 and 60 of the EEC Treaty. The provision in question is one requiring persons who act as insurance intermediaries in the Netherlands to reside there.

Article 4 of the WAB forbids anyone (with immaterial exceptions) from acting as such an intermediary unless registered in one of the registers therein mentioned. There are four registers, A, B, C and D, the qualifications for entry into which differ. The registers are kept by the Sociaal-Economische Raad, which is the Respondent in the proceedings before the College.

Article 5 (1) provides that, in order to be entered in one of those registers, a person must show to the satisfaction of the Sociaal-Economische Raad that

(a) he does not carry on any business incompatible with that of an insurance intermediary;

(b) there is no reason to fear his bringing the profession into disrepute;

(c), (d) and (e) he is not a minor or otherwise under disability and has not been adjudicated bankrupt;

(f) he has an abode in the Netherlands.

The College states in its Order for Reference that Article 5 (1) (f) must, in the light of other provisions of the WAB, be interpreted as meaning that the person in question must be established in the Netherlands, in the sense of having an office there, and must also reside there.

Article 5 (5) of the WAB lays down the conditions that must be satisfied where the person wishing to carry on business as an insurance intermediary is other than a natural person. These include a requirement that the individuals in charge of its actual management should fulfil the requirements of Article 5 (1), with the exception of the requirement of not having been adjudicated bankrupt.

Article 9 provides, putting it broadly, for the deletion from the relevant register of the name of any person who ceases to fulfil the requirements of Article 5.

Article 12 (1) imposes on registered persons, and also on insurers, an obligation to supply to the Sociaal-Economische Raad any information that it may request for the purpose of ensuring the due observance of the provisions of the statute, and Article 12 (2) imposes on registered persons and on insurers an obligation, at the request of any person thereunto authorized by the Minister of Finance, at once to allow inspection of all such books and papers relating to their business as the Raad may consider desirable for the purpose of supervising and ensuring the due observance of those provisions.

Articles 13, 14, 15 and 16 impose on registered persons a number of restrictions, concerned with such matters as the use of names other than their registered names, the nature and level of their charges and the inducements that they may offer to customers. For breach of any of those restrictions a registered person may be prosecuted under the statute on economic offences, the ‘Wet op de economische delicten’.

Mr Coenen, the first appellant in the proceedings before the College, is a Netherlands national. He is an insurance intermediary or, to be more accurate, he is the Managing Director of two Netherlands private companies, the Second and third appellants, which carry on business as insurance intermediaries. In the Order for Reference these companies are recorded as having separate offices, in the Netherlands, but Mr Coenen told us at the hearing that they now share one of those offices, which is a small office in a suburb of The Hague. Mr Coenen, so he told us, is also a Director of a Belgian company.

The names of Mr Coenen and of the two appellant companies are entered in Register B kept under the WAB.

Until 1973 Mr Coenen resided in the Netherlands but, in that year, he moved his home to Brasschaat in Belgium. Thereupon the Sociaal-Economische Raad notified him and the two appellant companies that their names would be deleted from the Register, as far as Mr Coenen was concerned, because he had ceased to satisfy the requirements of Article 5 (1) (f) of the WAB and as far as the companies were concerned because they had consequently ceased to satisfy those of Article 5 (5). It is against this decision that Mr Coenen and the two companies appeal to the College.

The Order for Reference evinces that the College has doubts whether Article 5 (1) (f) is compatible with Articles 59 and 60 of the Treaty. It also evinces that, in the opinion of the College, the only reason why the WAB imposed the requirement of residence in the Netherlands was to enable effective supervision of registered intermediaries pursuant to Article 12 of that statute, in particular through inspection of their books and papers. The College considers, in this connexion, that the legislature clearly proceeded on the assumption that an intermediary who was a natural person would generally run his business from his home, and also took account of the fact that the authority of persons authorized by the Minister of Finance under Article 12 (2) would be limited to the territory of the Netherlands. The College rejects the view put forward on behalf of the Sociaal-Economische Raad that the imposition of that requirement could also be justified as facilitating the taking of criminal proceedings following any breach of the provisions of Articles 13 to 16 of the statute or the taking of appropriate steps in the event of conduct on the part of a registered intermediary to the prejudice of the reputation of the profession.

The actual question referred to this Court by the College is as follows:

‘Should the provisions of the Treaty establishing the European Economic Community, in particular those of Articles 59 and 60, be interpreted as meaning that there should be held incompatible with them a requirement such as that in Article 5 (1) (f) of the Wet Assurantiebemiddeling, which provides that, where a natural person wishes to be entitled to act as an intermediary within the meaning of that statute, he must reside in the Netherlands?’

Your Lordships will observe that, as framed by the College, the question is of limited scope. It is only about the compatibility with Community law of a provision, such as Article 5 (1) (f) of the WAB, concerning the residence of a natural person who wishes to act as an insurance intermediary in a Member State. It does not extend to the compatibility with Community law of a provision, such as Article 5 (5) of the WAB, concerning the residence of individuals in charge of the management of a company that wishes to act as such an intermediary in that State. Notwithstanding this, both Mr Coenen and the Commission have urged the Court to deal with this wider question, which, they submit, is raised by the facts of this case and involves the interpretation of other Articles of the Treaty than Articles 59 and 60, in particular Article 48, which may be in point if those in charge of the management of a company are to be regarded as employed by that company, and Article 52 which may be in point in so far as a restriction as to the residence of those persons may involve a restriction on the company's right of establishment.

In my opinion, my Lords, the Court has in the circumstances no jurisdiction to answer these wider questions. Its jurisdiction under Article 177 of the Treaty is limited to answering the question referred to it by the national Court or Tribunal concerned. In saying this, I do not of course overlook that, as has been pointed out by the College itself in its Order for Reference, it is a Court against whose decisions, at all events in this instance, there is no remedy under Netherlands law, so that it was bound under Article 177 to refer to this Court any question of Community law arising in the proceedings before it. But there may be any number of reasons, pertaining to Dutch procedural law, Dutch company law, or even the interpretation of the WAB, reasons into which this Court cannot enquire, why the College did not think fit to refer to this Court the wider questions to which, as is submitted by Mr Coenen and the Commission, the actual facts of the case do appear, at first sight, to give rise.

I therefore confine my attention to the question actually posed by the College.

In my opinion, the answer to that question, whilst not given, is clearly pointed to by what was said by this Court in Case 33/74, the Van Binsbergen case [1974] ECR 1299.

The Commission submits that, on the authority of that case as well as on principle, the Court should in this case declare without any sort of qualification that any requirement that a person should reside on the territory of a Member State where he is to provide services is incompatible with Articles 59 and 60. The Commission argues, as I understand it, that the only qualification of that rule accepted by the Court in the Van Binsbergen case related to a requirement that a person practising as an advocate before a particular Court should have an address for service within the jurisdiction of that Court. The Court did not accept, says the Commission, that a requirement as to residence relating to the whole territory of a Member State as such might be valid.

I do not think, my Lords, that this is a correct interpretation of the Judgment in the Van Binsbergen case.

In paragraphs 12 and 13 of that Judgment the Court stated certain general principles: first, that, having regard to the particular nature of the provision of services, it would be impossible to hold incompatible with the Treaty specific requirements imposed on a person providing a service where those requirements had as their purpose the application to that person of professional rules warranted in the interests of the public and binding upon anyone established in the State in which the service was provided — in particular rules as to organization, qualifications, professional ethics, supervision and liability — in so far as that person would escape those rules by being established in another Member State; and, second, that, likewise, it would be impossible to deny to a Member State the right to take measures to prevent a person who was providing services entirely or mainly in its territory from exercising the freedom conferred by Article 59 for the purpose of avoiding the professional rules that would be applicable to him if he were established within that State, such a situation being within the scope of the chapter of the Treaty relating to the right of establishment rather than within that of the chapter on the provision of services.

In stating those principles the Court was, I think, recognizing that which was recognized by the authors of the Treaty themselves in Article 57, namely that there are many professions and trades of such a kind that, unless rules are made and enforced to ensure that those carrying them on are persons of probity and adequate skill, observing appropriate standards, great harm may be suffered by members of the public who are their clients, patients or customers. The Treaty envisages of course that the rules applicable for those purposes in the various Member States should be coordinated. But it does not envisage that they should be abrogated or rendered incapable of enforcement. As Mr Advocate-General Mayras pointed out in the Van Binsbergen case [1974] ECR at p. 1316 the object of Articles 59 and 60 of the Treaty, as of Articles 7, 48 and 52, is to eliminate discrimination. It is not to eliminate rules that are needed for the protection of the public.

In paragraphs 14 to 17 of its Judgment in the Van Binsbergen case the Court, as is shown by the opening words of the first of those paragraphs, was applying to the circumstances of that case the general principles it had stated in paragraphs 12 and 13. The case was, Your Lordships remember, concerned with a rule of Netherlands law requiring an unqualified person appearing as an advocate before the Centrale Raad van Beroep to have an abode in the Netherlands, although he was subject to no professional rules. The Court held that, in accordance with those principles, it would not be incompatible with Articles 59 and 60 that those whose functions were to assist in the administration of justice should be required to have a permanent professional establishment within the jurisdiction of particular courts or tribunals, where that requirement was objectively necessary to ensure the observance of professional rules connected, in particular, with the administration of justice and with professional ethics. But, the Court held, it was otherwise where a person acting as an advocate was not required to have any particular qualification and was not subject to any professional rules. In such a case, a requirement that he should reside in the Member State in question could not be justified, when it was possible for the due functioning of the machinery of justice to be secured by less restrictive measures, such as the selection of an appropriate address for service.

There can be no doubt that, among the professions and trades that have to be regulated for the protection of the public, are those of insurers and insurance intermediaries. One need only instance, to illustrate that fact, the notorious series of cases that occurred in the United Kingdom in the 1960s, before the relevant British legislation was strengthened, of collapses of dishonestly, recklessly or incompetently managed insurance companies. These resulted in considerable hardship to thousands of policy-holders, and indeed of persons who had been deluded into thinking that they were policy-holders, not to mention third parties who had been the victims of accidents. Those insurance companies had, as often as not, operated hand in glove with rogue insurance brokers.

So I far prefer the approach suggested in this case by the French Government in its observations, the contents of which I need not rehearse.

In the result I am of the opinion that the question posed by the College should be answered by saying that a requirement that a person who wishes to provide services as an insurance intermediary in a Member State should reside in that State is incompatible with Articles 59 and 60 of the Treaty unless it is imposed and is necessary in order to ensure the observance by that person of rules as to the conduct of the business of insurance intermediaries that exist for the protection of the public.

All three of Mr Coenen, the Commission and the French Government, to a greater or lesser extent, invite the Court to go further and, in effect, to decide whether, in the present instance, the requirement was imposed and is necessary to secure observance of the relevant rules — which means in fact, on the findings of the College, to decide whether the requirement was imposed and was necessary to secure observance of the provisions of Article 12 of the WAB. But, in my opinion, my Lords, that is a matter for the College to determine. That this must be so is, I think, well brought out by the fact that the Commission rests its submissions as to the real purpose of the requirement, and as to the necessity for it, on an analysis of some expert evidence given before the College and of certain admissions made before that Court on behalf of the Respondent. In my opinion it must be for the College, and not for this Court in proceedings under Article 177 of the Treaty, to draw conclusions from that evidence and those admissions.

Lastly I must recall that, at the hearing, Mr Coenen made a submission about his costs. But of course, this being a reference for a preliminary ruling, this Court must leave all questions as to costs to be dealt with by the College.