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What is a “public authority”? – Case Law Update

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    What is a “public authority”? – Case Law Update

    Fish Legal (and another) v The Information Commissioner, United Utilities, Yorkshire Water and Southern Water - Case C-279/12 Judgment of European Court of Justice 19 December 2013.

    • When is a water company a “public authority” for the purposes of the Environmental Information Regulations 2004 (the EIRs)?

    • That was a question which has recently been considered by the Court of Justice of the European Union (the European Court) in the case of Fish Legal and Emily Shirley v Information Commissioner, United Utilities Water plc, Yorkshire Water Services Limited, Southern Water Services Limited (case C-279/12).

    • The judgment it has handed down has potentially significant implications for water companies and other privatised companies operating in regulated industries such as utilities and transport - and not just in the context of the EIRs.

    The background

    • The applicants in the Fish Legal case had made various disclosure requests under the EIRs from the three water companies.   There was no issue that the information requested related to “environmental” matters and covered by the EIRs.  The question was whether or not they were “public authorities” and required to abide by them.  They took the view that they were not and declined the requests (although subsequently they provided disclosure on a voluntary basis).

    • The case before the European Court was a referral by the Upper Tribunal (the highest UK tribunal for determining issues relating to the EIRs) seeking guidance on how the EIRs ought to be interpreted in the light of EU Law.

    • The disclosure obligation is established by EU Directive 2003/4/ EC which is then implemented into UK law by the EIRs (and their Scottish equivalent).

    • The EU Directive imposes the obligations of disclosure upon a “public authority” - which Article 2 (2) defines as:

    (a) government or other public administration...

    (b) any natural or legal person performing public administrative functions under national Law, [including specific duties, activities or services in relation to the environment];

    (c) any natural or legal person having public responsibilities or functions, or providing public services [relating to the environment] under the control of a body or person falling within (a) or (b).

    The decision:

    • The key points which emerge from the European Court's judgement are summarised below.

    • The question of whether a body falls within the definition of "public authority" for the purposes of access to environmental information should be subject to the same conditions throughout the European Union. The concept should not therefore vary according to the individual laws of Member States. However, when considering whether such bodies perform ‘public administrative functions’, applicable national law should be examined to assess whether the bodies are vested with “special powers beyond those which result from the normal rules applicable” to private companies.  

    • Entities are "under control" of a government body (etc) for the purposes of limb (c) of the "public authority" test, "if they do not determine in a genuinely autonomous manner the way in which they provide [their public] services since a public authority [covered by limbs (a) or (b) of the public authority test] is in a position to exert decisive influence on their action..."

    • The judgement confirms that the manner in which that influence is exercised is irrelevant.  The Court does however cite a number of examples of potential influence including: the power to issue directions (whether or not in exercise of shareholder rights); the power to intervene in decisions - before or after the event; the power to appoint or remove board members.

    • The Court goes on to say "The mere fact that the entity in questions is, like the water companies concerned, a commercial company subject to a specific system of regulation for the sector in question cannot exclude control within the meaning of [the relevant article of the EU directive]", providing the other limbs of the test are met.

    • The judgement also includes a determination on what is meant by "a natural or legal person performing "public administration functions" under national law" (Article 2 (2) (b)).  It concludes that a body will be performing those functions if it has vested in it (under national law) "special powers beyond those which result from the normal rules applicable in relations between persons governed by private law".

    • The comments are made specifically in the context of the EIRs and water companies.  It is now for the UK Upper Tribunal (which makes determinations in relation to the EIRs) to decide whether the test is met in the particular circumstances of the Fish Legal case.

    • The potential for this rationale to be tested more widely is, however, clear. There is an obvious analogy between the private water companies in this case who are regulated by OFWAT and other privatised companies operating in regulated industries such as utilities and transport, especially since the judgment refers to "undertakings, such as the water companies concerned". There are clearly therefore also potential ramifications of this judgment (and the judgement of the UK Upper Tribunal which will follow) for those organisations in the exercise of their regulated functions.

    • The rationale behind the decision also has potential application in cases involving the Human Rights Act 1998 which has implications for "public authorities" including those carrying out "functions of a public nature" (s6(3)).

    • Finally the Fish Legal case could have implications for the extent of activities which could be regarded as public functions capable of being challenged by way of judicial review. 

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