European Court Rules On Meaning Of Public Authority

The recent ruling on 19 December 2013 by the Court of Justice of the European Union may bring the water companies in England and Wales closer to being subject to information requests from members of the public. The Court of Justice was asked by the Upper Tribunal in England to make a “preliminary ruling” to help interpret the European Directive 2003/4/EC On Public Access to Environmental Information which requires “public authorities” to provide environmental information on request.

Although the Freedom of Information Act 2000 lists public bodies which are subject to the Act, the Regulations are less clear and simply rely on defining characteristics such as the degree to which the bodies carry out “functions of public administration” or are “under the control” of other public authorities.

The Regulations and Directive are derived from the Aarhus Convention - to which the UK and the European Union are signatories – and which combines environmental rights with human rights. One of the Convention’s key “pillars” is the right to environmental information which sits alongside “public participation” in environmental decision making and “access to justice”.

Since the Regulations came into effect in 2004, a number of disparate decisions on what is considered to be a “public authority” has added to the inconsistency and uncertainty over how the phrase is defined. For instance, the Port of London Authority, the Mersey Docks and Harbour Company, Housing Associations and even a consumer protection organisation called Phonepay Plus are public authorities for the purposes of the Environmental Information Regulations - but Network Rail (now Railtrack) and the water companies have been held not to be.

In the late 1980s, the water companies along with other utilities were privatised by the Conservative government. Since then, questions have often arisen over whether privatised bodies which continue to perform public services or functions are still public authorities and therefore subject to requests for information by members of the public.

In the earlier decision of the Upper Tribunal in the case of Smartsource v the Information Commissioner (2010) UKUT 415 (AAC), water utilities were held not to be public authorities and consequently had no obligation to provide information to the public pursuant to the Environmental Information Regulations 2004 which implement the Directive into English and Welsh Law.

Article 2 (2) Of The Directive And The Meaning Of “Public Authority”

Article 2(2) of Directive 2003/4 defines ‘public authority’ as follows:
‘...
(a) government or other public administration, including public advisory bodies, at national, regional or local level;
(b) any natural or legal person performing public administrative functions under national law, including specific duties, activities or services in relation to the environment; and
(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).
2 (2) (a) covers the most obvious cases where bodies are clearly part of government or agencies of government at a local or national level. However, a “ natural legal person performing public administrative functions . . .in relation to the environment ” under 2 (2) (b) defines public authority in relation to the kind of activity rather than the status of the body performing it.

Furthermore, Article 2(2)(c) broadens the application of the term public authority to cover a “ natural legal person . . .under the control of a body or persons falling within the categories of government body or one performing public administrative functions ”.

Water Companies

In 1989 the water companies were privatised and the responsibilities, powers and other functions of the Water Boards were split up into the provider of the water service and the regulator (the water companies and the National Rivers Authority – subsequently the Environment Agency).

The current water companies are “appointed” by Ofwat and have various obligations and duties as well as powers under the Water Industry Act including the ability to make bylaws of their own, compulsorily purchase property to discharge water including into private watercourses, the right to impose temporary bans on water usage such as temporary hosepipe bans and even to cut off water supply.

However, in the case of Smartsource v The Information Commissioner (2010) UKUT 415 (AAC), it was decided by the Upper Tribunal that water companies were not public authorities because, primarily, they had autonomy as private companies.

Fish Legal and Emily Shirley, who were related parties in the case of Smartsource, appealed to the Upper Tribunal, requesting that a referral of the question of how “public authority” should be defined under Articles 2 (2) (b) and (c) of the Directive should be made to the Court of Justice of the European Union.

Fish Legal And Emily Shirley v ICO And Southern Water, United Utilities And Yorkshire Water Case C 279/12 - The Ruling Of The Court Of Justice Of The European Union

The ruling from the Court of Justice of the European Union goes into an unexpected amount of detail over the characteristics of the water companies themselves and reduces the questions put to it by the Upper Tribunal to three points of clarification on “functions of public authority”, “control” and the degree to which there may be a case for hybridity where a body can have functions caught by the regulations but may itself have other non-related functions which are not caught and are therefore free from obligations to provide environmental information to the public.

Special Powers

The Court ruled that in order to determine whether a body is covered by article 2 (2) (b) “it should be examined whether they have “special powers beyond those which result from the normal rules applicable in relations between persons governed by private law.” The court looked at the specific characteristics of water companies under the Water Industry Act 1991 – including the ability to make bylaws of their own, compulsorily purchase property to discharge water including into private watercourses and the power to cut off water supply. The Court then left the decision on whether such “special powers” apply to water companies to the Upper Tribunal.

“Under The Control Of. . .”

The Court added that “Undertakings, such as United Utilities Water plc, Yorkshire Water Services Ltd and Southern Water Services Ltd, which provide public services relating to the environment are under the control of a body or person falling within Article 2(2)(a) or (b) . . .if they do not determine in a genuinely autonomous manner the way in which they provide those services since a public authority covered by Article 2(2)(a) or (b) of the directive is in a position to exert decisive influence on their action in the environmental field. .” The test to apply to determine whether a body is under the control of a public authority is therefore whether it can show that the services it provides are autonomous.

The Upper Tribunal will therefore need to establish if the water companies in England and Wales supply services in an autonomous manner, or whether, for instance, Ofwat “exerts decisive influence on their action in the environmental field.”

Hybridity Compromise

Interestingly, the Court of Justice considered that bodies which fell under Article 2 (2) (b) would be public authorities with regard to all the environmental information which they held. They could not then argue that as hybrid organisations with both functions of public authority and separate commercial functions that not all of their environmental information fell within their activities of public administration.

However, a body under the control of a public authority under (b) or (c), would not be required to provide environmental information which did not relate to the provision of its administrative service or functions. Where a water company, for instance, is thought to be under the control of, say, Ofwat, only that environmental information relating to its public function would need to be provided.

Broad Application

This ruling – although not yet implemented or applied to the case of Fish Legal by the Upper Tribunal – suggests that there may need to be a degree of reconsideration in the future by the Information Commissioner and the Upper Tribunal in determining what or who is covered by the Directive and the Regulations.

Even if the Upper Tribunal in the end does not decide that water companies are caught by the Directive/ Regulations, then it is likely that other privatised utilities and companies will be, as the European ruling could form a template for decisions by the ICO and the UT on existing and newly privatised bodies.

One only has to think of the energy producing industries or indeed Railtrack which has been ruled not to be subject to Environmental Information Regulations in the Network Rail Ltd v Information Commissioner (EA/2006/0061 and 0062) decision of 2006. It may well be that if that case had been heard after the Court of Justice’s decision, the outcome could have been different – and further consideration may now be given to Railtrack’s status.

With a coalition government committed to further privatisation of public functions, it is likely that there will be more cases on whether these bodies will be subject to information requests. British Waterways recently transformed into the charitable body the Canal and Rivers Trust – but retained its obligations under the Regulations and Directive. Defra has just launched a “market sounding exercise” with the possibility of privatising the Food and Environment Research Agency (FERA) and some of its functions.

It is therefore likely that the utilities should begin to consider how far their businesses can be split between activities which are purely business orientated and ones which relate to their public service functions and which could be subject to public scrutiny and to enable them to have access to that kind of data as of right.

This article was written by Justin Neal, one of our environmental law experts. It was originally published in Environmental Law Monthly and is reproduced here with their permission.

Call one of our experts free on

0800 028 1943