Fish Legal and Emily Shirley v Information Commissioner, United Utilities Water Ltd, Yorkshire Water Services Ltd, Southern Water Services Ltd and the Secretary of State for the Environment, Food and Rural Affairs  UKUT (AAC)
The February 2014 issue of ELM reported on the ruling of the Court of Justice of the European Union following a request 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. Since then, there has been some complicated manoeuvring by the parties but a final decision of the Upper Tribunal (UT) was handed down in February this year.
The Environmental NGO Fish Legal and Emily Shirley had requested information from water companies but the water companies had argued that they were not subject to information requests as they were not “public authorities”.
Whereas many organisations and government bodies and agencies are listed in the Freedom of Information Act 2000, the Environmental Information Regulations 2004 which implement the European Directive and part of the Aarhus Convention 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. So the answer as to whether a water company is a public authority is left to interpretation and, ultimately, the courts and tribunals.
In 1989 the water companies were privatised and are now “appointed” by the regulator OFWAT. They have various obligations and duties as well as powers under the Water Industry Act including access to third party land, the ability to make byelaws of their own, compulsorily purchase property, 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 earlier 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 (CJEU).
The ruling of the Court of Justice of the European Union
The CJEU in Fish Legal and Emily Shirley v ICO and Southern Water, United Utilities and
Yorkshire Water Case C 279/12 clarified the tests for what is a public authority based on “functions of public authority” and “control”.
The Court ruled that in order to determine whether a body is caught by the Directive 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 test to apply to determine whether a body is under the control of a public authority is whether it can show that the services it provides are autonomous.
Fish Legal and Emily Shirley at the Upper Tribunal
However, upon being remitted to the Upper Tribunal and before these issues could be considered, the Secretary of State for the Environment, Food and Rural Affairs intervened and began a judicial review of the Upper Tribunal on the basis that neither the Information Commissioner nor the First Tier Tribunal had the jurisdiction to decide on what is a public authority for the purposes of the EIR and FOIA. This was a surprising move given that the EIR requires interpretation in order for decisions to be made on what is and isn’t subject to information requests.
The Tribunal then sat to hear this issue and the substantive issues with a High Court judge heading a panel of three (Charles J (Chamber President), Edward Jacobs and Paula Gray). They disagreed with the Secretary of State regarding jurisdiction and then proceeded to give judgment on the issues of whether water companies are public authorities for the purposes of the Environmental Information Regulations.
Application of CJEU tests: Special Powers/ Control
On the substantive issues, after a long discussion of the various powers of the water companies and its relationship to other bodies such as Ofwat, the UT applied the tests set out by the CJEU.
Firstly, the UT looked at the “special powers” criterion.
This was described in the CJEU ruling as
Whether those entities are vested, under the national law which is applicable to them, with special powers beyond those which result from the normal rules applicable in relations between persons governed by private law.
In applying the test, they found that water companies do have special powers (for instance in compulsory purchase – including the power to “compel” and wide powers of access ) and that therefore, they carry out the functions of public authorities and were public authorities for the purposes of the Convention, the Directive and the Regulations
However, on the “Control” test, applying it very strictly, they found that it
is a demanding one that few commercial enterprises will satisfy. The companies’ functions may be fixed by law and by their Licences, but the test is concerned with the way in which they exercise those functions. They are subject to stringent regulation an oversight and there is the potential for extensive involvement and influence over the way in which they perform their services. But the evidence falls far short of showing that the Secretary of State, OFWAT and the EA influence their performance, individually or collectively, whether by actual intervention or by more subtle forms of influence, to such an extent that the companies have no genuine autonomy of action [para 155]
The water companies had argued that “bringing the companies within the scope of EIR would impose considerable, indeed intolerable, burdens [para 111].
But the Upper Tribunal was unsympathetic:
This is not our concern. The issue for us is whether or not the companies are public authorities. Moreover, as Mr McCracken pointed out, the water industries in Scotland and Northern Ireland have not been privatised and are, accordingly, public authorities, but there was no evidence presented that they were facing problems providing environmental information.” [para 111]
The water companies had reportedly requested that the Upper Tribunal provide comment on a list of powers and to indicate for each whether it is “special”, for the purpose of seeking legislative change to “divest themselves” of those powers. The judges “declined to sit an examination set by a party.”
The consequences of this decision are wide ranging. Judge Jacobs at an earlier stage in proceedings and in the reference to the CJEU had said that the question of definition and application of “public authority” may catch other industries concerned with the provision of services – including rail, electricity, gas and telecoms.
The decision of the Upper Tribunal and indeed the template test from the CJEU will no doubt be revisited in the near future and applied elsewhere to privatised utilities and those others with “special powers”.
The parties have one month to appeal the decision and it is not yet known if there will be an appeal.
Justin Neal, Irwin Mitchell
Justin Neal acted for Fish Legal in the initial complaints to the Information Commissioner and the subsequent Upper Tribunal appeal and reference to the European Court of Justice.
This article first appeared in the March edition of Environmental Law Monthly and has been reproduced with the kind permission of the publisher.