Just When You Thought it was Safe to Go Back into the Water – The CJEU Gives Judgment in Fish Legal

Earlier this year, a video went viral. It was a clip of the Ellen DeGeneres talk show in the US, on which she announced – after years of campaigning – that there would be a Finding Nemo 2. The world rejoiced. In an entirely dissimilar way, there is likely to be a strong clamour for the CJEU to produce Fish Legal 2 (although it is likely to be less fun, let alone involve a shark named Bruce). One Fish Legal judgment will not be enough, not for those pesky pescatarians who like judgments to provide answers.

If Julie Andrews has taught us anything, it is that the beginning is a very good place to start. The history of the Fish Legal case, and the AG’s Opinion in it, are covered in my Socratic post here. In short form, the question for the CJEU was whether or not privatised water companies are public authorities such that they owe obligations under the Environmental Information Regulations 2004 (implementing Directive 2003/4).

In its judgment of 19 December 2013, the Grand Chamber of the Court in Case C-279/12 Fish Legal v Information Commissioner opined on this topic. It readily dismissed the suggestions of the case being hypothetical and resolved to deal with the referred questions. At [48] it held that “only entities which, by virtue of a legal basis specifically defined in the national legislation which is applicable to them, are empowered to perform public administrative functions are capable of falling within the category of public authorities that is referred to in Article 2(2)(b) of Directive 2003/4.” It recognised that that did not answer what “public administrative functions” were. In classic CJEU style it set out the tests in the Directive and the facts:

51        Entities which, organically, are administrative authorities, namely those which form part of the public administration or the executive of the State at whatever level, are public authorities for the purposes of Article 2(2)(a) of Directive 2003/4. This first category includes all legal persons governed by public law which have been set up by the State and which it alone can decide to dissolve.

52      The second category of public authorities, defined in Article 2(2)(b) of Directive 2003/4, concerns administrative authorities defined in functional terms, namely entities, be they legal persons governed by public law or by private law, which are entrusted, under the legal regime which is applicable to them, with the performance of services of public interest, inter alia in the environmental field, and which are, for this purpose, vested with special powers beyond those which result from the normal rules applicable in relations between persons governed by private law.

53      In the present instance, it is not in dispute that the water companies concerned are entrusted, under the applicable national law, in particular the WIA 1991, with services of public interest, namely the maintenance and development of water and sewerage infrastructure as well as water supply and sewage treatment, activities in relation to which, as the European Commission has observed, a number of environmental directives relating to water protection must indeed be complied with.

54      It is also clear from the information provided by the referring tribunal that, in order to perform those functions and provide those services, the water companies concerned have certain powers under the applicable national law, such as the power of compulsory purchase, the power to make byelaws relating to waterways and land in their ownership, the power to discharge water in certain circumstances, including into private watercourses, the right to impose temporary hosepipe bans and the power to decide, in relation to certain customers and subject to strict conditions, to cut off the supply of water.”

It then declined to provide any sort of answer, leaving it to the Upper Tribunal to determine on the case’s return from the stratosphere: at [55]. The key question, at [56], is whether the body is vested under national law with “special powers“. This will not be an easy test to apply. Spiderman and Superman obviously have special powers. Batman does not; he just has a lot of money. Which comic-book hero do privatised industries more closely resemble, and is there a difference of principle between them? Answer came there none.

The second stage of the analysis was whether, because water companies are regulated by Ofwat and the Secretary of State, they are under the control of bodies which are subject to the EIR and so themselves subject. Is an ‘emanation of the State’ in EU law terms (as water companies are) necessarily caught by Article 2(2)(c) of Directive 2003/4? The CJEU gave a fairly strong hint that it normally would be (at [60]), but in the light of the Aarhus Convention basis of the Directive reformulated its analysis:

68      Those factors lead to the adoption of an interpretation of ‘control’, within the meaning of Article 2(2)(c) of Directive 2003/4, under which this third, residual, category of public authorities covers any entity which does not determine in a genuinely autonomous manner the way in which it performs the functions in the environmental field which are vested in it, since a public authority covered by Article 2(2)(a) or (b) of the directive is in a position to exert decisive influence on the entity’s action in that field.

69      The manner in which such a public authority may exert decisive influence pursuant to the powers which it has been allotted by the national legislature is irrelevant in this regard. It may take the form of, inter alia, a power to issue directions to the entities concerned, whether or not by exercising rights as a shareholder, the power to suspend, annul after the event or require prior authorisation for decisions taken by those entities, the power to appoint or remove from office the members of their management bodies or the majority of them, or the power wholly or partly to deny the entities financing to an extent that jeopardises their existence.

70      The mere fact that the entity in question 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 Article 2(2)(c) of Directive 2003/4 in so far as the conditions laid down in paragraph 68 of the present judgment are met in the case of that entity.

71      If the system concerned involves a particularly precise legal framework which lays down a set of rules determining the way in which such companies must perform the public functions related to environmental management with which they are entrusted, and which, as the case may be, includes administrative supervision intended to ensure that those rules are in fact complied with, where appropriate by means of the issuing of orders or the imposition of fines, it may follow that those entities do not have genuine autonomy vis-à-vis the State, even if the latter is no longer in a position, following privatisation of the sector in question, to determine their day-to-day management.

On this topic at least the CJEU may not have answered the question – it again left it for the Upper Tribunal to determine – but it made its feelings as to the likely outcome pretty clear.

In relation to hybrid public authorities, the CJEU was distinctly unkeen on the importation of such an uncertain test: at [76]. The rejection of hybridity in Smartsource is therefore approved. Instead, it concluded that “Article 2(2)(b) of Directive 2003/4 must be interpreted as meaning that a person falling within that provision constitutes a public authority in respect of all the environmental information which it holds. Commercial companies, such as the water companies concerned, which are capable of being a public authority by virtue of Article 2(2)(c) of the directive only in so far as, when they provide public services in the environmental field, they are under the control of a body or person falling within Article 2(2)(a) or (b) of the directive are not required to provide environmental information if it is not disputed that the information does not relate to the provision of such services“: at [83]. So there can be limits in particular types of case (control cases), but otherwise all environmental information is accessible.

Quite what the result of the judgment is going to be is unclear. Hybridity is dead, and there is some greater clarity on when a body can be said to be under the control of a public authority, but the more general test of when public administrative functions are being exercised remains distinctly murky. It is not likely to be very long before a further reference is sought from somewhere, although it probably will not be announced on the Ellen show.

11KBW’s Anya Proops appeared for the Commissioner in the CJEU, and Rachel Kamm did the same before the Upper Tribunal.

A Merry Christmas to all Panopticon’s readers, and may your 2014 bring you boundless information law litigation.

Christopher Knight