Upper Tribunal (Administrative Appeals Chamber)
You are here: BAILII >> Databases >> Upper Tribunal (Administrative Appeals Chamber) >> Fish Legal v IC & Ors (Information rights : Information rights: practice and procedure) [2015] UKUT 52 (AAC) (19 February 2015)
URL: http://www.bailii.org/uk/cases/UKUT/AAC/2015/52.html
Cite as: [2015] UKUT 52 (AAC), [2015] AACR 33
[New search] [Printable RTF version] [Help]
The
Upper Tribunal
(Administrative Appeals Chamber)
Upper
Tribunal Case No: GIA/0979/2011
Fish Legal
v
Information Commissioner
United Utilities plc
Yorkshire Water Services Ltd
and
the Secretary of State for the Environment, Food and Rural Affairs
Upper
Tribunal Case No: GIA/0980/2011
Emily Shirley
v
Information Commissioner
Southern Water Services Ltd
and
the Secretary of State for the Environment, Food and Rural Affairs
[2015] UKUT 52 (AAC)
Decisions on Appeals against Decisions of a Tribunal
Chamber President: Charles J
Upper Tribunal Judges: Edward Jacobs and Paula Gray
The
Upper Tribunal
(Administrative Appeals Chamber)
Fish Legal
and
Emily Shirley
v
Information
Commissioner,
United Utilities Water plc,
Yorkshire Water Services Ltd,
Southern Water Services Ltd
and
the Secretary of State for the Environment, Food and Rural Affairs
[2015] UKUT 52 (AAC)
TABLE OF CONTENTS
In Westlaw electronic copies of this decision, CTRL-left click on any entry in this Table will jump to the relevant section.
Decisions of the Upper Tribunal (Administrative Appeals Chamber)
C. The proceedings and their history
D. The First-tier Tribunal’s jurisdiction
E. The Commissioner’s jurisdiction
Why we reject the Secretary of State’s argument
III THE PUBLIC AUTHORITY ISSUE
A. The protection of the environment in the EU
B. The legal structure of the water industry
The companies’ corporate structure and governance
Duties of Water and Sewage Undertakers
Powers of Water and Sewage Undertakers
C. The definition of public authority
D. The proper role of the Upper Tribunal
E. The application of the CJEU’s tests
Susceptible to judicial review
The case against the companies
Parts IV and V of FOIA as Modified by EIR
Relevant Paragraphs in the CJEU Judgment
Decisions
of the Upper Tribunal
(Administrative Appeals Chamber)
Fish Legal v Information Commissioner, United Utilities Water plc, Yorkshire Water Services Ltd and the Secretary of State for the Environment, Food and Rural Affairs
As the decision of the First-tier Tribunal (made on 14 February 2011 under reference EA/2010/0069) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007 and the decision is RE-MADE.
The decision is: United Utilities plc and Yorkshire Water Services Ltd are public authorities and their responses to Fish Legal’s requests were late. No further steps are required of the companies.
Emily Shirley v Information Commissioner, Southern Water Services Ltd and the Secretary of State for the Environment, Food and Rural Affairs
As the decision of the First-tier Tribunal (made on 14 February 2011 under reference EA/2010/0076) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007 and the decision is RE-MADE.
The decision is: Southern Water Services Ltd is a public authority and its response to Mrs Shirley’s request was late. No further steps are required of the company.
Reasons for Decision
1. These are our reasons for allowing these two appeals. We have given our short, formal reasons in the related judicial review proceedings under references JR/5347/2014 (the Secretary of State’s application) and JR/5348/2014 (Fish Legal’s application). Mrs Shirley reserved the right to apply for permission to being judicial review proceedings, but did not do so.
I PRELIMINARY MATTERS
A. Abbreviations
2. We use the following abbreviations:
Aarhus: Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters done at Aarhus on 25 June 1998
CJEU: Court of Justice of the European Union and its predecessor the European Court of Justice
Commissioner Information Commissioner
Companies: United Utilities plc, Yorkshire Water Services Ltd and Southern Water Services Ltd, all of which are water and sewerage undertakers
EA: Environment Agency
EID: Directive 2003/4/EC on public access to environmental information
EIR: Environmental Information Regulations 2004 (SI No 3391)
Foster: the decision of the House of Lords in Foster v British Gas plc [1991] 2 AC 306, following the decision in CJEU Case C-188/89 [1991] 1 QB 405
FOIA: Freedom of Information Act 2000
Guide: Aarhus Convention Implementation Guide
Licence: Instrument of Appointment as a water and/or sewage undertaker
OFWAT: Water Services Regulation Authority
Smartsource: the decision of the Upper Tribunal in Smartsource Drainage and Water Reports Ltd v the Information Commissioner and a Group of 19 Water Companies [2010] UKUT 415 (AAC)
Sugar: the decision of the House of Lords in British Broadcasting Corporation v Sugar [2009] 1 WLR 430, also reported in the Court of Appeal at [2008] 1 WLR 2289 and in the High Court at [2007] 1 WLR 2583
TFEU: Treaty on the Functioning of the European Union
WIA: Water Industry Act 1991
B. The issues
3. These appeals raise two issues.
4. One issue is a matter of substance. It is whether the respondent companies are public authorities for the purposes of EIR. We call this the public authority issue.
5. The other issue is a matter of jurisdiction. It is whether the public authority issue is one that can be decided by the First-tier Tribunal or whether it has to be the subject of a judicial review. We call this the jurisdiction issue. It was raised late in the proceedings by the Secretary of State, but logically it has to be dealt with first.
6. To anticipate, we have decided that the public authority issue is within the jurisdiction of the First-tier Tribunal and that the companies are public authorities for the purposes of EIR by virtue of their special powers but not by virtue of being under State control.
C. The proceedings and their history
7. This is complicated.
8. Fish Legal is the legal arm of the Angling Trust. On 12 August 2009, it asked United Utilities Water plc and Yorkshire Water Services Ltd for information relating to discharges, clean-up operations, and emergency overflow. Mrs Shirley is a private individual. On 19 August 2009, she asked Southern Water Services Ltd for information relating to sewerage capacity for a planning proposal in her village. All three companies denied that they were under a duty to provide the information under EIR. Both Fish Legal and Mrs Shirley complained to the Commissioner. By letters dated 12 March 2010, the Commissioner replied, explaining that as the companies were not public authorities for the purposes of EIR, he had no power to adjudicate the complaints. The letters concluded:
Nevertheless, should either party wish to pursue this matter further and, should the Information Tribunal be approached with a view to adjudicating on the matter, the Commissioner would not seek to take issue with the Tribunal’s jurisdiction to consider whether a body is a public authority for EIR.
9. On appeal to the First-tier Tribunal, which had replaced the Information Tribunal, the tribunal dismissed the appeals, relying on the Smartsource decision, but gave permission to appeal to the Upper Tribunal.
10. In both cases the information requested was provided, so by the time the case came before Judge Jacobs in the Upper Tribunal the only issue was whether the information had been provided within the time allowed by regulation 5(2) of EIR, which depended on whether the companies were public authorities. Judge Jacobs heard the cases together and, as they were in effect a challenge to the reasoning of the Upper Tribunal in Smartsource, he decided to refer the following questions to the CJEU under Article 267 of TFEU:
Article 2.2(b) of Directive 2003/4/EC
1. In considering whether a natural or legal person is one ‘performing public administrative functions under national law’, is the applicable law and analysis purely a national one?
2. If it is not, what EU law criteria may or may not be used to determine whether:
(i) the function in question is in substance a ‘public administrative’ one;
(ii) national law has in substance vested such function in that person?
Article 2.2(c) of Directive 2003/4/EC
3. What is meant by a person being ‘under the control of’ a body or person falling within Article 2.2(a) or (b)? In particular, what is the nature, form and degree of control required and what criteria may or may not be used to identify such control?
4. Is an ‘emanation of the State’ (under paragraph 20 of the judgment in Foster v British Gas plc (Case C-188/89)) necessarily a person caught by Article 2.2(c)?
Article 2.2(b) and (c)
5. Where a person falls within either provision in respect of some of its functions, responsibilities or services, are its obligations to provide environmental information confined to the information relevant to those functions, responsibilities or services or do they extend to all environmental information held for any purpose?
The Court answered those questions under reference Case C-279/12. Its answers and the relevant passages of its judgment are in Appendix D.
11. It remained for the national court to apply the tests set out in the judgment. At this stage, the Secretary of State for the Environment, Food and Rural Affairs was joined as a party in order to make submissions on the general nature of the tests, which would have to be applied to a range of different bodies. The Secretary of State also argued, for the first time, that the First-tier Tribunal did not have jurisdiction over the issue whether a body was a public authority under FOIA and EIR, and that the proper route of challenge was by way of judicial review proceedings.
12. The Chamber President decided to appoint a three-judge panel to hear the appeals. Moreover, in order to avoid repetition of argument in other cases that were before the Upper Tribunal, the parties in those cases were invited to attend the hearing and to make any submissions they wished on the general nature of the test. Those cases are GIA/0158/2012 (Duchy of Cornwall and HRH the Prince of Wales v Information Commissioner and Mr Bruton) and GI/2187/2013 (Miss Cross v Information Commissioner and the Royal Household).
13. At a directions hearing, it was agreed by all concerned that the correct route of challenge should not prevent the public authority issue being decided at this stage. Accordingly, the Secretary of State began judicial review proceedings in the Administrative Court challenging the decisions of the First-tier Tribunal and the Upper Tribunal, with all others involved joined as interested parties. The Chamber President, as a judge of the High Court, transferred those proceedings to the Upper Tribunal and assigned them to this panel. This is case JR/5347/2014.
14. Fish Legal also began judicial review proceedings in the Administrative Court challenging the decision of the Commissioner in its case, with all others involved joined as interested parties. Cobb J transferred those proceedings to the Upper Tribunal and they have been assigned to this panel. This is case JR/5348/2014.
15. Accordingly, on 24-27 November 2014, we heard the appeals in Fish Legal and Shirley along with the two transferred judicial review cases, with all parties involved attending and making submissions. As the Cross case has been transferred to the Upper Tribunal by the First-tier Tribunal, it will have to be heard by a panel containing a member. That is why Dr Henry Fitzhugh sat with us so that he would be familiar with all the arguments relevant to the issue he will have to decide in that case.
16. We are grateful to all counsel whose written and oral arguments we received:
|
Party |
Counsel |
|
Fish Legal |
David Wolfe QC, instructed by William Rundle |
|
Mrs Shirley |
Robert McCracken QC with Meyric Lewis of counsel, both acting pro bono |
|
Commissioner |
Anya Proops of counsel |
|
United Utilities plc |
Thomas de la Mare QC with Jacqueline Lean of counsel, both instructed by Osborne Clarke |
|
Secretary of State |
Julian Milford of counsel. James Eadie QC also contributed to the written argument and appeared at the directions hearing |
|
Mr Bruton |
Karen Steyn QC, who spoke on the public authority issue, with Joseph Barrett of counsel, who spoke on the jurisdiction issue, instructed by Harrison Grant |
|
The
Duchy of Cornwall |
Amy Rogers of counsel, instructed by Farrer and Co. Jonathan Crow QC also contributed to the written argument and appeared at the directions hearing |
17. We also wish to thank Miss Cross, who despite not having any legal training made some pertinent points that had been missed by counsel.
II THE JURISDICTION ISSUE
A. Introduction
18. We have to deal with this issue. Jurisdiction is fundamental to the operation of a statutory tribunal, because it has no power to act outside its jurisdiction. A party is entitled to raise an issue of jurisdiction at any stage, as the Secretary of State did: Carter v Ahsan [2005] ICR 1817 at [82]. The parties cannot confer jurisdiction on a tribunal by consent, as the Commissioner purported to do in his letters of 12 March 2010: Essex County Council v Essex Incorporated Congregational Church Union [1963] AC 808 at 820-821 and 828.
B. The legislation
19. The relevant provisions of FOIA are set out in Appendix A. We are concerned with those provisions as modified by regulation 18 of EIR; they are set out in Appendix B. Our reasoning applies to both.
C. The arguments
20. In summary, the Secretary of State’s argument was that: (i) pursuant to section 57 of FOIA the First-tier Tribunal only has jurisdiction over a decision notice issued by the Commissioner under section 50(3)(b); and (ii) the Commissioner had no jurisdiction to serve such a decision notice on the issue whether a body was a public authority. It is set out in more detail in paragraph 24. We call this the Secretary of State’s argument, although the Commissioner adopted it. We accept (i), but we reject (ii).
21. The arguments against the Secretary of State’s position were varied and included references to the access to justice provisions of Aarhus and EID. We do not find it necessary to refer to those provisions. Our reasoning, like that underlying the Secretary of State’s argument, is based on statutory interpretation.
D. The First-tier Tribunal’s jurisdiction
22. Section 57 of FOIA is clear. It provides that the complainant or the public authority may appeal to the First-tier Tribunal ‘Where a decision notice has been served’. For the purposes of this case, that means a decision notice under section 50(3)(b).
E. The Commissioner’s jurisdiction
23. We follow the parties in referring to the Commissioner’s jurisdiction. We would prefer to confine that word to judicial bodies and instead refer to the Commissioner’s powers and duties, but that is merely a matter of terminology.
The argument
Why we reject the Secretary of State’s argument
25. We begin by considering how the legislation operates in a straightforward case. Assume that a person has requested information from a local authority, is met with the response that the information is not held, and applies to the Commissioner for a decision under section 50. There is no dispute that the person, referred to in section 50 as the complainant, made a request for information from a public authority. The choices open to the Commissioner on that application are set out in mandatory terms. If it appears to the Commissioner that section 50(2) applies, he has to notify the complainant under section 50(3)(a) that he is not making a decision. If the complainant is dissatisfied with that response, the remedy lies in judicial review. If the Commissioner does not rely on section 50(2), section 50(3)(b) imposes a duty to serve a decision notice. This obliges the Commissioner to come to a decision on whether the request was dealt with in accordance with the requirements of Part I of FOIA. If the complainant is dissatisfied with the decision notice, the remedy lies on appeal under section 57.
26. The same applies in more complicated cases. Assume that a person has requested information from a local authority, is met with the response that the request is vexatious, and applies to the Commissioner for a decision under section 50. Vexatious requests are governed by section 14(1):
(1) Section 1(1) does not oblige a public authority to comply with a request for information if the request is vexatious.
The way that section operates is to relieve the local authority of the duty that would otherwise apply under section 1(1). The request does not cease to be a request just because it is vexatious. Accordingly, when the Commissioner considers the request under section 50, there will be no dispute that the person made a request for information from a public authority. Unless the Commissioner relies on section 50(2) – for example on the ground that the application (as opposed to the request) was vexatious - section 50(3)(b) imposes a duty to serve a decision notice. This obliges the Commissioner to come to a decision on whether the request was dealt with in accordance with the requirements of Part I of FOIA. Assuming the Commissioner agrees that the request was vexatious, the decision notice will say that the local authority was not under a duty under section 1(1) and had acted in accordance with the requirements of Part I. If the complainant is dissatisfied with the decision notice, the remedy lies on appeal under section 57.
· whether there was a request;
· whether that request related to information;
· whether the person making the request and the complainant were the same person; and
· whether the body from whom the information was sought was a public authority.
The reasoning also applies to section 51: see our discussion in paragraph 41 below.
28. This raises the question: what is it that makes the proper classification of the body and the other issues mentioned in paragraph 27 different from, say, the issue whether the information is held or the request is vexatious? The Secretary of State’s argument at the hearing relied (i) on the structure and language of the legislation and (ii) on Sugar. We reject his argument on (i) for the following reasons.
29. First, the Secretary of State accepts that the Commissioner has to come to a conclusion on the proper classification of a body, but inevitably does not identify the legislative basis on which the Commissioner would have either a power or a duty to make a decision on that issue. This leaves the Commissioner’s position in relation to the fundamental concepts on which the legislation is based and which form the conditions precedent to his jurisdiction to be dealt with only outside the express statutory structure of sections 50 and 57. If that is the correct reading of the legislation, it would be, in our view, surprising.
30. Second, the argument overlooks the way in which legislation is regularly drafted. Legislation is often based on concepts, which are then assumed to exist for the purposes of jurisdictional provisions. So an appeal ‘from any decision of an appeal tribunal … on the ground that the decision of the tribunal was erroneous in point of law’ appears to require as conditions precedent both that a decision has been made and that it was made by a body that would constitute a tribunal. Nevertheless, there would be an error in point of law if the ‘tribunal’ were not properly constituted as a tribunal: Gillies v Secretary of State for Work and Pensions [2006] 1 WLR 781 at [6]. Likewise, on an appeal against ‘any decision of the Secretary of State’, a tribunal would be entitled to decide that ‘the decisions under appeal have so little coherence or connection to legal powers that they do not amount to decisions at all’: R(IB) 2/04 at [72].
31. Take as an example our basic jurisdiction under section 11 of the Tribunals, Courts and Enforcement Act 2007. This provides for ‘a right to appeal to the Upper Tribunal on any point of law arising from a decision made by the First-tier Tribunal’. That assumes both that there is a decision and that it was made by the First-tier Tribunal. That does not deprive the Upper Tribunal of jurisdiction over either of those issues on an appeal. Applying Gillies and R(IB) 2/04, in effect the section provides for a right of appeal to the Upper Tribunal on any point of law arising from what purports to be a decision made by a body holding itself out as properly constituted to be the First-tier Tribunal.
32. Those authorities deal with the right to challenge decisions before a judicial body. We can see no reason why the principle of interpretation is not equally applicable to an administrative decision-maker such as the Commissioner. FOIA is based on three key concepts: (i) a request (ii) for information (iii) held by a public authority. When in sections 50 and 51 the legislation refers to public authorities as it does, it is merely a convenient way of referring back to a request made under section 1 that is the trigger to the application of FOIA.
33. Third, the Secretary of State’s argument is based on a flawed analysis of the validity of administrative decisions and leads to anomalies. On the argument:
· If the Commissioner decides that a body is not a public authority – call this a negative decision - there is no power to issue a decision notice under section 50(3)(b).
· If the Commissioner decides that a body is a public authority – call this a positive decision – the Commissioner is under a duty to issue a decision notice under section 50(3)(b).
The Secretary of State argued that judicial review was the appropriate way to challenge both a negative decision that the body was not a public authority and a positive decision that it was, despite the fact that a positive decision would be embodied in a document called a decision notice.
34. The argument was based on the assertion that the question whether the request had been made to a public authority was a condition precedent to, or anterior to, the jurisdiction of the Commissioner, with the result that it could not be determined by him in performing his duties under FOIA and, therefore, in making the decisions he is required to make by section 50.
35. This cannot be correct in respect of a positive decision. It assumes that the conditions set out in section 50 must be satisfied before the Commissioner can exercise his jurisdiction over an application under that section. That is not the correct analysis. As the Privy Council decided in Calvin v Carr [1980] AC 574 at 590:
… where the question is whether an appeal lies, the impugned decision cannot be considered as totally void, in the sense of being legally non-existent. So to hold would be wholly unreal. The decision of the stewards resulted in disqualification, an effect with immediate and serious consequences for the plaintiff. … An analogous situation in the law exists with regard to criminal proceedings. In Crane v Director of Public Prosecutions [1921] 2 AC 299 there were irregularities at the trial which had the effect that the trial was 'a nullity,' Nevertheless an appeal was held to lie to the Court of Criminal Appeal. …
…
Passing from this analogy to authorities directly relevant in the field of civil proceedings their Lordships consider that these support the proposition that a decision of an administrative or domestic tribunal, reached in breach of natural justice, though it may be called indeed may be, for certain purposes 'void' is nevertheless susceptible of an appeal. …
In other words, what is or purports to be a decision that is the subject of an appeal and has consequences that remain in existence until they are challenged has sufficient validity to be the subject of that appeal. Applying this approach to a positive decision produces this result. The Commissioner would have served what he considers to be a decision notice under section 50(3)(b) and that notice would have consequences that give it sufficient existence in law to allow an appeal. This accords with the view expressed by Baroness Hale one of the minority in Sugar at [67]. In written submissions provided at our request after the hearing, the Secretary of State unsurprisingly accepted that on an appeal to it the First-tier Tribunal can decide the limits of its jurisdiction and helpfully referred to a number of cases that establish that proposition starting with Bunbury v Fuller (1853) 9 Ex 111. So the Secretary of State accepted that the First-tier Tribunal (and the Upper Tribunal on a voluntary transfer) can decide whether a notice given under section 50(3)(b) has sufficient effect to found an appeal. This engages an assessment of whether the Commissioner was right to make a positive decision and so to serve such a notice.
36. A negative decision may not be framed as a decision notice under section 50(3)(b), but its effect is to dismiss a complainant’s application for a decision by the Commissioner on whether a request he made has been dealt with in accordance with Part 1 of FOIA and so unless and until it is challenged it has that consequence.
37. The Secretary of State’s position that a negative decision is not a decision under section 50(3)(b) and so can only be challenged by judicial review produces the anomaly that the same issue would be challenged differently according to whether it was decided positively or negatively. That in turn would produce a further anomaly. A negative decision would have to be challenged by the person making the request and that would go by way of judicial review to the Administrative Court, while a positive decision would have to be challenged by the body and that would go to the First-tier Tribunal. So the individual requester would have to take the more complicated and potentially expensive procedure, while the body would have the easier and potentially cheaper procedure before the tribunal. If the body were to apply for a judicial review, it could be met by the answer that there was an alternative remedy available, by way of appeal, although Baroness Hale took a different view in Sugar at [67].
38. We have not overlooked the possibility of the Administrative Court transferring the judicial review proceedings to the Upper Tribunal under section 31A of the Senior Courts Act 1981. That would merely add to the complexity of the proceedings for an individual requester, thereby reinforcing our argument. Nor have we overlooked that judicial review is the only remedy available if the Commissioner decides that one of the heads in section 50(2) applies. He is then prevented by section 50(3)(a) from giving a decision notice, which is a condition precedent to an appeal under section 57. The availability of a remedy does not mean that it will be exercised. So, since heads (a) and (d) in section 50(2) are unlikely to be contentious, they will not generate a challenge. Heads (b) and (c) might be more contentious, but it is a rational legislative policy to leave these matters to the jurisdiction of judicial review, which is discretionary, and exclude them from the jurisdiction of the Commissioner and the First-tier Tribunal, which is as of right.
39. These anomalies and problems would be avoided if a negative decision was also a decision within section 50(3)(b). Although they cannot found that result on a literal interpretation, they can and do provide support for the view that such a conclusion would accord with the underlying intention of FOIA. In our view, the mandatory requirements of section 50 found the view that any decision on an application made to the Commissioner that is not based on section 50(2) is a decision on that application within section 50(3)(b). So, in our view, a negative decision is a decision within section 50(3)(b) that, like a positive decision, has consequences that give it sufficient existence in law and validity to allow an appeal.
40. Fourth, the Secretary of State’s interpretation is capable of generating a multiplicity of proceedings on relatively minor issues. An example of a recent case that came before this Chamber serves as an example of the extent of the Secretary of State’s reasoning. There was, in that case, no doubt that the body in question was a public authority. The complainant had sent a series of emails and letters to the authority, which had replied in various terms on each occasion. He complained to the Commissioner that the authority had responded outside the time allowed by section 10. Whether that argument was correct depended on which of the emails and letters amounted to requests and on the scope of each request. If the Secretary of State is correct, the classification of the correspondence should have been brought before the Administrative Court in judicial review proceedings before the First-tier Tribunal could decide whether the authority had replied in time. We are not just making a point that minor matters would potentially come before the Administrative Court; that is also the case for the matters listed in section 50(2), which we have dealt with in paragraph 37 above. Rather, the point is that the resolution of what on its face seems a straightforward composite issue would require multiplicity of proceedings. This is a convenient point to deal with Ms Proops’ argument that jurisdiction is never a minor matter. That is correct, but it is relevant to take account of the practical importance of an issue in deciding whether, as a matter of interpretation, it is an issue of jurisdiction.
In a case such as this, that issue turns on whether the information held is public or excluded information. If the commissioner’s jurisdiction turns on precisely the same question, how is he to set about resolving it if, as is likely to be the case, he lacks the necessary information? Section 51 is designed to enable him to require the production of information that he needs to perform his duties, but that section will not apply if the commissioner has no jurisdiction.
Sugar
43. The Secretary of State relied on the decision of the House of Lords in this case. It is, with respect, not an easy case to analyse. It was decided by a majority consisting of Lords Phillips, Hope and Neuberger, but each gave their own reasons; and all the judges, including Lord Hoffmann and Baroness Hale who dissented, made comments relevant to the jurisdictional issue.
44. The best place to start is with the decision and, in order to understand that, it is necessary to set out the history of the proceedings. Mr Sugar asked the BBC for a copy of the Balen Report on its reporting of Middle Eastern affairs. The BBC was listed as a public authority under FOIA, but only in respect of information held for purposes other than journalism, art and literature. It refused to provide a copy of the report, saying that it held it for the purposes of journalism (the journalism issue). Mr Sugar complained to the Commissioner, who agreed with the BBC and so made, in our terminology, a negative decision. Mr Sugar then lodged an appeal with the Information Tribunal, which has now been replaced by the First-tier Tribunal. It decided that it had jurisdiction. The BBC appealed against that decision to the High Court. It also sought judicial review of the tribunal’s decision. Mr Sugar in turn sought judicial review of the Commissioner’s decision. At first instance, Davis J decided that the Commissioner had determined on the journalism issue that the BBC was not a public authority with the results that (a) section 1 of FOIA had no application and he had no jurisdiction, and (b) the Commissioner had made no decision that was susceptible to an appeal to the tribunal under FOIA: [2007] 1 WLR 2583. The Court of Appeal dismissed Mr Sugar’s appeal against Davis J’s decision that the tribunal had no jurisdiction: [2008] 1 WLR 2289. The House of Lords allowed Mr Sugar’s further appeal, remitting the case to Davis J: [2009] 1 WLR 430. So, in the result, the House accepted that the Commissioner had jurisdiction, thereby giving the tribunal jurisdiction. The issue in that case was different from that before us, but the outcome of the case is consistent with our analysis.
45. We now take the speeches in the order they were delivered.
46. Lord Phillips identified two issues: (i) whether the Commissioner was correct to conclude that he had jurisdiction under FOIA and (ii) whether the Commissioner had made a decision that was susceptible to an appeal to the tribunal. On (i), he considered at [25] that the seminal question was whether Mr Sugar had made a request of a public authority under section 1 and concluded on alternative approaches that he had. The first of those approaches was that he made the request of the BBC in its capacity as a public authority(at [26]); the second was that a ‘public authority’ embraced a hybrid authority (at [28]). He concluded at [31] that whichever approach to the construction of ‘public authority’ was correct:
the request for information made by Mr Sugar to the BBC was made to a public authority and section 1 of the Act applied to it. What was the BBC's obligation on receipt of the request? That depends upon the answer to the journalism issue. If Mr Sugar is correct on this issue, the BBC was under an obligation under section 1(1)(b) to communicate the Balen Report to him. What if the BBC is correct, and the Balen Report was excluded information?
Accordingly he concluded that the Commissioner had been wrong to conclude that he had no jurisdiction under FOIA and that, as Mr Sugar had made a request under section 1, the journalism issue and thus the determinative issue on whether the BBC was a public authority fell to be decided in determining whether that request had been dealt with by the BBC in accordance with Part 1 of FOIA. On (ii), he concluded at [37] that the tribunal had been correct to conclude that the substance of the Commissioner’s (in our terms, negative) decision on the public authority question in that case was a decision under section 50 that Mr Sugar was entitled to challenge before the tribunal on appeal. So his speech favours our conclusion that a negative (and necessarily a positive) decision by the Commissioner on the public authority issue is a decision within section 50(3)(b).
47. Lord Hoffmann dissented. He said at [42] that ‘Everyone agrees that section 50 does not allow the commissioner to confer jurisdiction on himself by a finding that a body is a public authority … It is either a public body or it is not. If that question is disputed, it must be decided by a court.’ The first part of that quotation is, with respect, obviously correct. On our analysis, the Commissioner’s decision is subject to control by the First-tier Tribunal and the Upper Tribunal on appeal, just as on the Secretary of State’s analysis it would be subject to control by the Administrative Court on judicial review. The second part of that quotation was picked up by Lord Hope, but there is nothing in the report to show what argument, if any, the House heard on this point.
48. At [46] to [48], Lord Hoffmann disagreed with the alternative analyses of Lord Phillips on his issue (i) and concluded that the public authority issue is anterior to the jurisdiction of the Commissioner; and he agreed with the conclusions of Davis J and the Court of Appeal [49] and [50]. This minority speech supports the argument of the Secretary of State and its reasoning applies to both a positive and a negative decision.
49. Lord Hope accepted that the appeal could be allowed on the grounds identified by Lord Phillip and Lord Neuberger, but preferred (at [58]) to base his agreement primarily on the fact that the BBC was a public authority as it was listed in FOIA, which mirrors Lord Phillips’ approach at [28]. He agreed at [52] (and at [57]) with Lord Hoffmann that a challenge to the proper classification of a body ‘must be decided by a court. But this assumes that the question whether the body is or is not a public authority is genuinely open to dispute.’ With respect this seems to avoid the issue whether the decision made by the Commissioner was within section 50(3)(b) and so founded an appeal to the tribunal as it goes straight to the substantive result on the public authority issue. But his agreement in the majority result means that he accepted that the Commissioner’s decision was an appealable decision under section 50 for the reasons given by Lords Phillips and Neuberger.
50. Baroness Hale says plainly at [60] that the Commissioner ‘does not have power to issue a formal decision if he concludes … that the person or body to whom the request for information was made is not a public authority within the meaning of the Act …’ However, she noted at [67] that ‘if the commissioner concludes that the body, person or office holder concerned is a public authority, then … there will be a decision within the meaning of section 50(1) which can be appealed to the tribunal. It would also be susceptible to judicial review on the ground that the Commissioner had exceeded his jurisdiction.’ She went on (at [68]) to note the comparative advantages of proceedings in the tribunal over those in the Administrative Court. At [69], she identified the question as being whether the statutory language applied to the document in question (i.e. the negative decision in that case) and concluded that it did not. Accordingly, her speech provides support for the Secretary of State’s argument on a negative decision but support for our conclusion on a positive decision.
51. Lord Neuberger gave his own reasons, although he also agreed with the reasons of Lord Phillips and Lord Hope: see [96]. He said at [84] that:
A court, acting under the judicial review procedure, would be a significantly less appropriate forum for such a determination [whether information was or was not excluded] than the tribunal and the commissioner, with all their accumulated expertise, their statutory powers to order disclosure, and their inquiries being essentially confidential in nature.
The core of his reasoning is founded on the overall purpose of FOIA at [89], [90] and [91]. He said:
90. … The applicant has treated it as a public authority by making a request under section 1 of the Act, and, at least until he accepts, or it is conclusively determined, that the information he seeks is excluded, it appears not only sensible, but not in conflict with those provisions, that the authority should be treated as a public authority subject to the provisions of the Act.
91. Once a hybrid authority honestly concludes that the requested information is excluded, then it would appear to follow that it should also be able to contend that it need not comply with the obligations in section 1. That seems to me to be consistent with the policy of the Act: a hybrid authority should not have to search for and give details of, information which it honestly believes is excluded, unless and until it is held not to be excluded. However, just as the authority can proceed on the basis that it is right in such a case, so can the applicant proceed on the basis that he is right. Accordingly, if the applicant considers that the information is not excluded, he can apply to the commissioner for a decision under section 50. That is because he contends that he has made ‘a request for information … to a public authority’ which has not ‘been dealt with in accordance with the requirements of Part I’. The commissioner can then proceed to deal with the application under sections 50 to 53, and if either party is dissatisfied with his decision, they can appeal to the tribunal under section 57.
52. This approach overlaps with the reasoning of Lord Phillips based on his first approach that the request was made to a body as a public authority and his conclusion at [37]. So both Lord Phillips and Lord Neuberger reason that because, on an application to the Commissioner, the complainant contends that he has made ‘a request for information … to a public authority’ which has not ‘been dealt with in accordance with Part 1’, the Commissioner can proceed to deal with that application under sections 50 to 53 and if either party is dissatisfied with is decision, they have the right to appeal under section 57. This must mean that, like Lord Phillips, Lord Neuberger was of the view that a negative decision on the public authority issue was a decision under section 50(3)(b). Accordingly, his speech provides support for our conclusions on a negative (and necessarily a positive) decision.
53. Our conclusions on Sugar are that the support given to Lord Hoffmann by Lord Hope and Baroness Hale does not mean that the reasoning in the speeches read together provides authority in favour of the Secretary of State’s argument. Rather, the decision of the majority that the negative decision in that case was a decision made under section 50 supports the view we have come to. We acknowledge that parts of the reasoning relate to the position of the BBC as a hybrid authority, but we consider that the reasoning read as a whole provides support for our conclusion that a positive and a negative decision on whether the request has been made to a public authority is a decision within section 50(3)(b), because (i) the person making the request has made it on the basis that it is directed to a public authority (and so is founded on one of FOIA’s key concepts), (ii) the complainant’s application under section 50 empowers the Commissioner to consider that public authority issue on that application, and (iii) his decision on that point is one that both parties can challenge on appeal under section 57 as it is the decision or part of the decision on that application.
54. So, to revert to our provisional position set out in paragraph 42 above, there is nothing in Sugar that compels us to a different conclusion from our analysis of the legislation. Indeed, it supports it.
Conclusion
55. In summary, the Commissioner has jurisdiction both to investigate and decide whether a body is a public authority. That decision is one made on the application under section 50 of FOIA and so the document giving notice of that decision is a decision notice served under section 50(3)(b). Sections 50 and 51 are predicated upon the existence of the three key concepts of request, information and public authority on which the legislation is based. But that does not deprive the First-tier Tribunal of jurisdiction to deal with those issues. As Mr Barrett put it at the hearing, section 50(1) merely describes the matters that may be the subject of an application under that section and so a complaint about the way the specific request has been dealt with; it does not prescribe conditions that must be met before an application can be made and determined by the Commissioner. When that section and section 51 refer to an application, they refer to a complaint to the Commissioner that any requirement of the legislation has not been met and the Commissioner can address all the reasons advanced as to why this has not occurred, including the assertion that FOIA does not apply because the request was not made to a public authority.
III THE PUBLIC AUTHORITY ISSUE
F. The protection of the environment in the EU
56. The protection of the environment is part of the constitution of the EU. Article 191 of TFEU provides:
TITLE XX
ENVIRONMENT
Article 191
(ex Article 174 TEC)
1. Union policy on the environment shall contribute to pursuit of the following objectives:
· preserving, protecting and improving the quality of the environment,
· protecting human health,
· prudent and rational utilisation of natural resources,
· promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change.
2. Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.
In this context, harmonisation measures answering environmental protection requirements shall include, where appropriate, a safeguard clause allowing Member States to take provisional measures, for non-economic environmental reasons, subject to a procedure of inspection by the Union.
3. In preparing its policy on the environment, the Union shall take account of:
· available scientific and technical data,
· environmental conditions in the various regions of the Union,
· the potential benefits and costs of action or lack of action,
· the economic and social development of the Union as a whole and the balanced development of its regions.
4. Within their respective spheres of competence, the Union and the Member States shall cooperate with third countries and with the competent international organisations. The arrangements for Union cooperation may be the subject of agreements between the Union and the third parties concerned.
The previous subparagraph shall be without prejudice to Member States’ competence to negotiate in international bodies and to conclude international agreements.
Consistently with this, the EU is party to Aarhus and has implemented its provisions in EID.
57. The Guide explains something of the innovative nature of Aarhus in its Introduction under the heading A new kind of environmental convention:
The Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention) was adopted at the Fourth Ministerial Conference ‘Environment for Europe’ in Aarhus, Denmark, on 25 June 1998. Thirty-nine countries and the European Community have since signed it.
The Aarhus Convention is a new kind of environmental agreement. It links environmental rights and human rights. It acknowledges that we owe an obligation to future generations. It establishes that sustainable development can be achieved only through the involvement of all stakeholders. It links government accountability and environmental protection. It focuses on interactions between the public and public authorities in a democratic context and it is forging a new process for public participation in the negotiation and implementation of international agreements.
The subject of the Aarhus Convention goes to the heart of the relationship between people and governments. The Convention is not only an environmental agreement, it is also a Convention about government accountability, transparency, and responsiveness.
The Aarhus Convention grants the public rights and imposes on Parties and public authorities obligations regarding access to information and public participation. It backs up these rights with access-to-justice provisions that go some way towards putting teeth into the Convention. In fact, the preamble immediately links environmental protection to human rights norms and raises environmental rights to the level of other human rights.
Whereas most multilateral environmental agreements cover obligations that Parties have to each other, the Aarhus Convention covers obligations that Parties have to the public. It goes further than any other convention in imposing clear obligations on Parties and public authorities towards the public as far as access to information, public participation and access to justice are concerned.
G. The legal structure of the water industry
58. We base what follows on Judge Jacobs’ reference to the CJEU, which was written with the help of the representatives of Fish Legal, Mrs Shirley and the companies. The Secretary of State was not then a party to the proceedings.
Background
59. It is not necessary to begin sooner than the middle of the 20th century, when the majority of water and sewerage services were in public ownership with provision by local government authorities (often acting cooperatively through ‘Joint Boards’) under the Public Health Act 1936.
60. The Water Act 1973 transferred, in general, responsibility for these services to regional water authorities. Some services were provided by statutory companies acting on their behalf.
61. The Water Act 1989 privatised the water industry in England and Wales with effect from 1 September 1989, introducing largely the structure which applies today. At privatisation the functions, powers, property and other assets of the regional water authorities were divided between the National Rivers Authority (now, after the Environment Act 1995, the EA) and the new privatised companies, which were in future to provide water and sewerage services. The Authority became the principal water quality regulator, and received the water authorities’ environmental regulatory functions, including the management and licensing of water resources and pollution control and prevention. The companies received inter alia the networks of pipes and reservoirs, sewers and sewage treatment works which formed the relevant physical systems. Shares in the companies were then made available on the open market in a public offering.
62. The water authorities in Scotland and Northern Ireland remain in public ownership, answerable to central (Northern Ireland) or devolved (Scotland) government and with directors appointed by the relevant government. The Scottish and Northern Irish water authorities are not regulated by OFWAT.
WIA
63. The legislation governing water management in England and Wales was consolidated and amended in 1991. WIA is, for the purposes of these appeals, the principal Act that now provides the statutory framework for the water industry. It is split into eight parts, each addressing different aspects of the organization of water and sewerage services.
· Part I establishes OFWAT with primary responsibility for supervising water and sewerage undertakers, replacing the Director General for Water Services. It is described on its website as ‘a non-ministerial government department… independent of government and the [companies], although ... directly accountable to Parliament …’
· Part II provides for the appointment and supervision of water and sewerage undertakers. Appointment on appropriate conditions is a function undertaken solely by the Secretary of State, but with supervision often jointly undertaken by the Secretary of State and OFWAT.
· Part III provides the framework for the supply of water by water undertakers and licensed suppliers, including the rights and duties of water undertakers.
· Part IV provides the framework for the provision of sewerage services by sewerage undertakers.
· Part V contains the financial provisions. Specifically, it addresses the charges that can be made by water and sewerage undertakers for their services.
· Part VI relates to powers and works, and to the statutory protection enjoyed by water and sewerage undertakers’ works and apparatus. It sets out the statutory powers available to water or sewerage undertakers.
· Part VII contains the ‘information provisions’ applying, variously, to OFWAT, water and sewerage undertakers and others.
· Part VIII contains miscellaneous provisions.
64. Only companies appointed by the Secretary of State or (now) OFWAT as the water supply and/or sewerage undertaker for an area of England and Wales may provide these services.
The companies’ corporate structure and governance
65. The companies have been appointed as water and sewerage undertakers in their respective areas. They were, following privatisation, set up as limited liability companies (with shares either held privately or listed on a stock exchange). Only a limited company may be appointed as a water or sewerage undertaker. The companies are run by boards of directors, responsible to the companies’ shareholders. They operate on normal commercial principles, as set out in their memoranda and articles of association, with the aim of generating profits for distribution to shareholders as dividends and to allow reinvestment in the business.
66. The companies are subject to the rules that bind all other public limited companies or limited companies (Licence condition F6A.5A), including compliance with the Combined Code on Corporate Governance contained within the Listing Rules of the Financial Services Authority.
67. The companies receive no public subsidy, whether in the form of capital or income. Neither borrowing nor investment decisions are directly dictated by government or any other public body. Nor is any of the companies’ borrowing backed by the State. Accordingly, each company’s funds derive from these sources:
· charges to customers;
· sale of shares and other rights issues;
· borrowing through the capital markets at normal commercial rates (either through direct loans or the issue of corporate bonds); and
· other commercial activities such as sale of land and other assets.
68. Each company has a Licence running from 1 September 1989, which contains the terms of the appointment of each company as a water and/or sewerage undertaker. It not only imposes the general statutory duties and grants the general statutory powers but also includes other conditions. These may include the payment of sums of money to the Secretary of State. Some of the important conditions are summarized in the judgment of Blackburne J in Griffin v South West Water Services Ltd [1995] IRLR 15 at paragraphs 95-112.
69. The Licence can be terminated only on 25 years’ notice (Licence condition O as amended), with reasons. The Licence may only be modified by OFWAT (i) with the relevant company’s consent, or (ii), without consent, after a Competition Commission report. It may be amended to replace an outgoing company with a new one under what are known as ‘inset appointments’.
70. Compliance with the terms of the Licence is enforced by the Secretary of State or OFWAT, who may require that an undertaker carries out specific actions or measures. Part II Chapter III now also provides for financial penalties. Part II also restricts the operation of the ordinary provisions for the dissolution of the companies.
Functions of OFWAT
71. The companies are effectively monopoly suppliers to most users of their services in their areas of appointment. Therefore, the regulatory system seeks to scrutinise such monopoly prices through what is widely called (by OFWAT and industry operators) ‘comparative competition’, that is a system under which the prices of the companies are benchmarked against each other to assess how each company's performance compares with that of the most efficient companies. This occurs during the five yearly price reviews. On the basis of this assessment, the maximum which each company can charge customers and the means by which their charges are levied is determined by OFWAT for five year periods. The current one is the fifth such period and covers 2010 to 2015.
72. Every five years the companies submit draft asset management plans (also known as ‘business plans’) which set out details of their desired outputs such as capital investment programmes. The plan must be one which, according to the OFWAT website, ‘optimises and exposes the costs and benefits of the plan at the overall and component level’. OFWAT provisionally determines which elements of the plans are in its view appropriate and produces drafts of what it will approve for the relevant period. After consultation, the companies submit final business plans and OFWAT determines the maximum charges that may be levied on the basis of its final judgement on matters such as the appropriate capital investment programme. This final determination sets the maximum that the companies may charge their customers to finance the desired outputs contained in their business plans. The companies are at liberty to seek to achieve additional outputs. However, these would have to be self-funded as the companies are not permitted to charge more than the maximum set by OFWAT.
73. OFWAT is required to exercise its regulatory functions so as to ensure that the companies are able (in particular, by ensuring reasonable returns on their capital) to finance the proper carrying out of their functions as water and sewerage undertakers. This requires that OFWAT assesses whether the companies’ return on capital is reasonable and whether they have sufficient commercial freedom to be able to access, in the marketplace, sufficient finance (in terms of quantity and price) to carry out their functions.
Duties of Water and Sewage Undertakers
74. Water undertakers have duties under WIA:
· ‘to develop and maintain an efficient and economical system of water supply within its area, and to ensure that that all such arrangements have been made -
(i) for providing supplies of water to premises in that area and for making such supplies available to persons who demand them; and
(ii) for maintaining, improving and extending the water undertaker’s water mains and other pipes,
as are necessary for securing that the undertaker is and continues to be able to meet its obligations under this Part’ (section 37(1));
· in addition, the legislation imposes a range of duties in relation to the provision and maintenance of the water supply and the water supply system.
· The ability of these undertakers to disconnect customers from the water supply is limited and subject to strict procedural requirements breach of which is a criminal offence.
· The Water Act 2003 imposed a duty to produce Water Resource Management Plans and Drought Plans. The former are documents providing details, over a 25 year forward period, of the undertakers’ plans for managing and developing its water resources, so as to enable it to continue to meet its supply and other obligations under WIA.
75. Sewerage undertakers have duties under WIA:
· ‘(a) to provide, improve and extend such a system of public sewers (whether inside its area or elsewhere) and so to cleanse and maintain those sewers… as to ensure that that area is and continues to be effectually drained; and
(b) to make provision for the emptying of those sewers and such further provision (whether inside its area or elsewhere) as is necessary from time to time for effectually dealing, by means of sewage disposal works or otherwise, with the contents of those sewers’ (section 94(1));
· to attain certain standards of performance in accordance with regulations: see the Water Supply and Sewerage Services (Customer Service Standards) Regulations 2008 (as amended). These include regulations in relation to the flooding of third party land. There are related obligations under WIA to furnish both the OFWAT and customers with information about levels of performance;
· to provide sewers in certain locations where there are, or are likely to be, adverse effects on the environment or amenity if a public sewer is not provided; and
· to accept communication with its public sewers from the drains and private sewers of premises, although this duty is qualified and subject to the companies recovering their costs of allowing any connection from those wishing to connect. All sewerage services delivered to the customer through that communication are then charged for by the sewerage undertaker in the usual way.
Powers of Water and Sewage Undertakers
76. Water and sewerage undertakers are given by statute a range of powers, some of them shared with others. They are the powers that were the subject of discussion before us and they were given to them by Parliament to enable and assist them to perform their duties. They include these powers:
· Compulsory purchase of land, and rights in and over land (including by the creation of new rights) (sections 155, 168 and 171);
· Byelaw making over waterways (and land held with them) in their ownership (section 157 and Schedule 10) for the purposes of preserving order and preventing damage on, or undue interference with, that land (section 157 and Schedule 10);
· Placing, altering and maintaining pipes in both streets and other land (sections 158 and 159);
· Discharging water (subject to certain reasonable restrictions) into any available watercourses, including those owned by others where such discharge might normally constitute a trespass, wherever exercising the powers specified (section 165);
· (In the case of water undertakers) to impose temporary hosepipe bans restricting usage of the water supply by the public (section 76), and either to cut off supply to premises or serve a notice requiring a person to take steps to ensure suspected damage, contamination, waste, misuse or undue consumption that might be caused to an undertaker’s property and/or the water supply ceases or does not occur (section 76); and
· Entry over third party land for purposes related to the carrying out of works (section 168, subject potentially to the payment of compensation under Schedule 6 Part II paragraph 11) and for sewerage purposes (section 171, in respect of which no compensation is available under Schedule 6 Part I).
77. And sewerage undertakers have these powers:
· Adoption of all or part of sewers, lateral drains and sewage disposal works in its area (save those completed before 1 October 1937, that is, before the Public Health Act 1936) (section 102).
· To alter the drainage system of its area in the event that drainage from any premises is not adapted to the general system or is otherwise objectionable, by the provision of new drains/sewers and the closure/filling up of the existing drain, sewer or cesspool (section 113); and
· To close or restrict the use of public sewers (section 116).
78. Water and sewerage undertakers may not dispose of any operational land without the consent of the Secretary of State (sections 156 and 219).
Other Sources of Information
79. The companies provide some information on a voluntary basis.
80. The companies must also provide some information through other legislation, for example to comply with their data protection requirements and corporate reporting requirements. Those companies that are publicly listed make Stock Exchange announcements in the normal manner. Those companies that are not publicly listed public limited companies must under Licence Condition F publish accounting information about their interim and final results as if they were listed. As with other holders of licences to extract and discharge water to/from watercourses, the companies provide information to the EA if the EA requires them so to do.
81. The companies must, as sewerage undertakers, keep a public register with details of trade effluent discharge consents and agreements.
82. OFWAT must keep a register of all appointments as undertakers and conditions attached thereto.
83. The Secretary of State may publish such information as he chooses about the operations of water undertakers. OFWAT has powers to publish such information to customers.
84. It is, in general, a criminal offence, punishable by 2 years imprisonment, to disclose information obtained under WIA about the operations of particular undertakers if they do not consent (section 206).
85. The EA must also maintain a public register of details of applications and consents for abstraction and impounding licences.
86. Public registers must be kept by the EA of all applications for discharge permits, grants of permit, and conditions attached thereto (regulation 46 of, and Schedule 24 to, the Environmental Permitting (England and Wales) Regulations 2010 (SI No 675)), and water quality objectives. Details of samples, and analysis thereof, taken by the EA of discharges and receiving waters must be included, as must any such information actually supplied by the companies to the EA. Information about samples must be placed on the register within two months. Information may not be included without the consent of the companies if it is considered commercially confidential.
87. FOIA requires much information actually held by public bodies, such as the EA, OFWAT and the Secretary of State, to be made available on request. It does not purport to transpose EID. It is in some respects narrower in scope. It does not, for example, exclude from exemption information about emissions (as EID and EIR do). Information may be refused on grounds of commercial confidentiality. There is no right to information which has been supplied on a voluntary basis to the public body.
88. The Kiev Protocol to Aarhus requires the establishment of a pollution release and transfer register (maintained by the EA), accessible to the public, containing information on the release to air, water or land of 86 substances by eight industry sectors (including wastewater treatment).
The Water Act 2014
89. This Act makes additional detailed provision for the water industry, but we were not concerned with its provisions.
H. The definition of public authority
90. Aarhus is based on three pillars: access to information, public participation in decision-making, and access to justice. It applies to public authorities as defined in Article 2(2):
‘Public authority’ means:
(a) Government at national, regional and other level;
(b) Natural or legal persons performing public administrative functions under national law, including specific duties, activities or services in relation to the environment;
(c) Any other natural or legal persons having public responsibilities or functions, or providing public services, in relation to the environment, under the control of a body or person falling within subparagraphs (a) or (b) above;
(d) The institutions of any regional economic integration organization referred to in article 17 which is a Party to this Convention.
91. This definition was transposed into Article 2(2) of EID:
‘Public authority’ shall mean:
(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).
92. The definition of ‘public authority’ in regulation 2(2) of EIR is differently arranged:
Subject to paragraph (3), ‘public authority’ means—
(a) government departments;
(b) any other public authority as defined in section 3(1) of the Act, disregarding for this purpose the exceptions in paragraph 6 of Schedule 1 to the Act, but excluding—
(i) any body or office-holder listed in Schedule 1 to the Act only in relation to information of a specified description; or
(ii) any person designated by Order under section 5 of the Act;
(c) any other body or other person, that carries out functions of public administration; or
(d) any other body or other person, that is under the control of a person falling within sub-paragraphs (a), (b) or (c) and—
(i) has public responsibilities relating to the environment;
(ii) exercises functions of a public nature relating to the environment; or
(iii) provides public services relating to the environment.
This differs from the definitions in Aarhus and EID in one respect, and perhaps in two.
93. It certainly differs in adopting different numbering, so that Article 2(2)(b) in Aarhus and EID are the equivalent of regulation 2(2)(c), while Article 2(2)(c) of Aarhus and EID are the equivalent of regulation 2(2)(d).
94. Mr McCracken argued that there was another difference. In regulation 2(2)(d), control qualifies body, whereas in Aarhus and EID it is at least ambiguous and could be read as qualifying services rather than body. The answer for us lies in the second paragraph of the CJEU’s order, which states that the body is a public authority if, to paraphrase, it does not provide its services in a genuinely autonomous manner.
I. The proper role of the Upper Tribunal
95. Ms Proops invited us to set out the principles on which the classification of a body could be made. We understand and sympathise with the Commissioner’s desire to obtain such guidance. The CJEU has laid down tests that are general in their terms and uncertain in their application to particular cases. The Commissioner has to train his staff, publish guidance on his website, and decide what arguments to present on appeals; most importantly of all, he wants to get his decisions right.
96. The Upper Tribunal’s duty is to decide the cases that come before it. But it is not limited to that. It has a proper role in ensuring, or at least contributing to, the coherent development of the law within its jurisdiction. This Chamber has, like the Social Security Commissioners before it and on whose practices the Upper Tribunal was based, given guidance for the benefit of decision-makers and the First-tier Tribunal. That guidance is also, we trust, helpful to parties and their advisers. The Immigration and Asylum Chamber takes a similar approach, notably in its Country Guidance cases, discussed in Januzi v Secretary of State for the Home Department [2006] 2 AC 426.
97. We have, therefore, tried to be as helpful to the Commissioner and the First-tier Tribunal as we can through our reasons on the public authority issue. We cannot, however, lay down broad, general principles in quite the way that Ms Proops requested for these reasons. First, because the nature of the issue does not permit that. Second, because we have to act in the context of a case. We should not write a treatise on a particular issue, however interesting and useful that might be. Third, because useful guidance must be based either on a wide range of experience, such as the judges of this Chamber have in social security matters, or on detailed evidence covering the scope of the guidance, such as the Immigration and Asylum Chamber receives in its Country Guidance cases. We do not yet have the accumulated experience of other bodies than the companies and we did not have evidence on other types of body.
98. Mr de la Mare invited us to indicate with precision which of the companies’ powers we considered were special powers and which were not. He told us that the potential consequences of being classified as a public authority under EIR were such that the companies would need to consider whether to seek legislative change in order to divest themselves of the powers that had produced that effect. He provided us with a detailed, classified list of powers for our convenience. We decline to sit an examination set by a party, especially one that is headed by the rubric requiring candidates to answer all questions. We have to decide the public authority issue and to give our reasons for doing so. We have not found it necessary to deal with every power that was discussed in written submissions or during the hearing. Although we accept in principle that we should give such guidance as we can to decision-makers and the First-tier Tribunal, the position of other parties is different. It is not part of this Tribunal’s function to assist them in seeking legislative reform of their governing legislation.
J. The application of the CJEU’s tests
99. The CJEU recognises the division of function inherent in a reference under Article 267 of TFEU. It is the Court’s role to answer the questions referred and the national court’s role to apply the answers it receives to the case before it. There have, though, been cases in which the CJEU has applied the law to the case before it. Stewart v Secretary of State for Work and Pensions Case C-503/09 [2012] PTSR 1 is an example. It did not do so in this case. We heard a number of arguments that sought to draw conclusions from its failure to do so. Given the domestic legal material that was mentioned by the Court, so the arguments went, it is surely significant that it did, or did not, treat the case as so clear as not to require the national court to have to answer the questions.
100. We reject that method of argument. In a case like Stewart, the Court had all the relevant legal material and it could be sure that it had the necessary factual information, which was limited. Despite the amount of material included in the reference in these cases, the Court could not be sure that it had all the relevant details from the complicated legislation before it. And given the different ways that the water industry may be structured in different countries, it may have considered it unwise to venture into the application of the tests. We do not consider it safe to draw any conclusions from the fact that the CJEU left it to the national court to apply the tests it identified.
K. Special Powers
101. The only issue for us was whether each of the companies was a ‘legal person performing public administrative functions under national law’ within Article 2(2)(b) of EID. There was no dispute that they were performing ‘specific duties, activities or services in relation to the environment’.
The CJEU judgment
102. The CJEU explained in the first paragraph of its Order how to decide whether a person was performing ‘public administrative functions’:
… it should be examined 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.
For convenience, we refer to this as the special powers test. This is merely a shorthand for being vested with ‘special powers beyond those which result from the normal rules applicable in relations between persons governed by private law.’ We consider that that phrase has to be read and applied as a whole. We also refer to the rules of private law, which again is a convenient shorthand for ‘the normal rules applicable in relations between persons governed by private law.’
103. Mr Milford argued that special had to be given a meaning. We do not accept that approach. We do not read special as adding some additional element that would otherwise be absent. Rather, we read it as part of the composite phrase that captures the contrast between the powers vested in the bodies in question and those that result from the rules of private law. We note that the other language versions of the judgment that we have consulted do not use any equivalent term to special. We find in this confirmation for our view that the phrase has to be read as a whole.
Powers
104. The CJEU did not define powers. We accept Mr McCracken’s argument that it was not using the word in the precise Hohfeldian sense of the ability to alter legal relations: see Wesley Hohfeld’s Fundamental Legal Conceptions as Applied in Judicial Reasoning (edited by David Campbell and Philip Thomas). Rather, it was used in the more general sense of an ability to do something that is conferred by law.
105. Mr Wolfe argued, at least in his written argument, that the test would be satisfied if we identified just one special power. As we have found that the companies have a number of such powers, we do not need to deal with that issue.
106. Mr de la Mare’s argument was that EU law looks to the substance rather than the form. We accept that argument. This accords with our interpretation of powers. The issue is a practical one. Do the powers give the body an ability that confers on it a practical advantage relative to the rules of private law?
107. We can illustrate the application of this practical approach by referring to the power of compulsory purchase. Section 155(1) of WIA provides:
A relevant undertaker may be authorised by the Secretary of State to purchase compulsorily any land anywhere in England and Wales which is required by the undertaker for the purposes of, or in connection with, the carrying out of its functions.
Section 155 is supplemented by Schedule 11, which deals with the process by which the companies may apply to the Secretary of State for authorisation, the Secretary of State’s powers, and compensation. Mr de la Mare called such powers contingent powers, whilst Ms Proops preferred tandem powers, but labels do not matter. What matters are the practical benefits that this power gives to the companies. There are at least two. One is what Mr Wolfe called the power to promote the exercise of the power. The formal process confers an advantage that is not generally available. In addition to the formal process, it provides the opportunity, which any sensible company would surely take, of checking first with officials on the likely response to an application, thereby conferring privileged access to those who will advise the Secretary of State. The other benefit is the leverage that the power confers in commercial negotiations. The evidence showed that section 155 is little used. It is, however, always present as a fall back if a company is unable to secure agreement by negotiation. We were not given evidence that this occurs, but it is a fact of commercial life that these purchases take place ‘under the shadow of compulsion’ (Megarry and Wade, The Law of Real Property 6th edition at 22-056). For these reasons, we reject Mr de la Mare’s argument that the Secretary of State’s involvement prevents the compulsory powers under section 155 being special powers.
108. Ms Proops argued that we should ignore powers that had fallen into disuse. We accept that argument as an aspect of the practical approach we have adopted. It is, though, necessary to be sure that the power does not have a value in one of the ways we consider in this decision. Powers may have a force even when they are not deployed.
109. Mr de la Mare pointed out that the powers conferred on the companies merely allowed them to undertake activities that any landowner might engage in. He made this point in relation to the companies’ power under section 157 of WIA to make byelaws in respect of the public use of their land or waterways. Section 157(3)(d) provides that byelaws can provide for a contravention to constitute a criminal offence. As Mr de la Mare pointed out, this power is subject to Schedule 10, which provides that byelaws have to be confirmed by the Secretary of State. He argued that the section merely gave the companies power to do what any private landowner might want to do – to provide access on terms that protect the land itself and other users of it. The criminal sanction, he went on, merely ensures that the companies are not left without effective powers of enforcement. We do not accept that. We leave aside the value of the opportunity to promote the exercise of the Secretary of State’s power; we have already dealt with that point. The point we wish to make here is that Mr de la Mare’s argument misunderstands the nature of powers under the CJEU’s judgment. The characterisation of the powers to which the CJEU referred (special – beyond the rules of private law) is not limited to activities or outcomes, but includes the means by which they may be secured. The power not only to promote the making of a byelaw, but the making of a byelaw breach of which constitutes a criminal offence, is not a power that is available under private law. It is not comparable to the private landowner’s power to enforce a licence to enter on and enjoy land through the civil law.
110. The power need not be unique to a particular body, sector or industry. Mr de la Mare repeatedly referred to other bodies or industries that had the same or similar powers. That does not show that the power cannot satisfy the special powers test. The extent to which the CJEU’s judgment will result in bodies being classified as public authorities is unclear and undecided, but potentially wide. As Judge Jacobs noted in his reference, the reasoning in these cases is potentially relevant to other privatised, regulated industries that deliver a once publicly owned service: electricity, gas, rail and telecoms. It will have to be applied to those and other bodies as and when cases arise. The outcome cannot be assumed for the purposes of deciding the cases before us.
111. Related to this was Mr de la Mare’s argument that bringing the companies within the scope of EIR would impose considerable, indeed intolerable, burdens. 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.
112. We do, though, accept Mr de la Mare’s argument, with which Mr McCracken agreed, that it was necessary to distinguish a power from a limitation or qualification on a duty. Mr de la Mare gave the example of the duty under section 45 of WIA to provide a connection. Section 45 provides for a number of conditions that can be imposed for complying with that duty. Looked at in isolation, section 45 appears to confer a range of powers that would not be available under private law. Seen in their full context, however, these are not powers but part and parcel of the duty to connect. They operate together to create a qualified duty.
Hunting the Snark
113. Ms Proops argued that we should analyse the companies’ powers to see if they were by their nature State powers. We cannot adopt that approach, because there are no exhaustive criteria by which we could classify powers as being by their nature exclusively State powers. That is because the nature of the State is not sufficiently clear. Take the last century. In 1900, there would have been a clear view of what did not constitute State powers. There was no national health service, no social security provision and no nationalised industries. Fast forward to 1950 and the position was different. There was a national health service, a fully developed welfare system, and recently nationalised industries. Fast forward now to 2000 and the position was again changed. The national health service was still there, the social security system had changed significantly, and industries and utilities had been privatised. The boundaries between business and the State had changed. The State was operating in more business-like ways, and was contracting out activities to the private sector. The boundaries between State and the private sector are less clear cut, varying from Administration to Administration, from Department to Department, and from country to country. We read the CJEU’s judgment as identifying an autonomous test of public authority for the whole of the EU that can achieve broadly consistent results across the various industry structures and across the varying views of the proper role of the State over time. This reading reinforces and is reflected in the practical approach we have adopted to the application of the Court’s test.
114. There has, of course, been continuity of some State powers across and beyond the previous century: the power to levy general taxes, to maintain a standing army, to exercise criminal powers, including powers of imprisonment, to conduct international negotiations, and so on. But, for the most part, these are not the types of power that will have to be classified.
115. Judge Jacobs had these difficulties in mind when he referred the questions to the CJEU. The Advocate General may have been trying to address those concerns in his Opinion when he wrote:
81. If ‘public authority’ is characterised by anything, it is the capacity of persons who wield it to impose their will unilaterally. While a public authority may impose its will unilaterally – that is, without the need for the consent of the person under the relevant obligation – an individual, on the other hand, may impose his will only if such consent is forthcoming.
82. Clearly, that consideration must always be viewed in the context of a State under the rule of law, governed by the democratic principle and subject to the jurisdiction of the courts. However, what is important for present purposes is that acts of public authority, while subject to review, are endowed per se with immediate and autonomous executive power, by contrast with the acts of individuals, which always require the intervention of the public authorities in order to take effect where the consent of those affected by such acts is not forthcoming.
83. On that basis, I believe that, for the purposes of the present proceedings, it can be concluded that, in the context of Directive 2003/4, ‘public administrative functions’, as an equivalent of public authority and save for possible legislative and judicial exceptions – which are not relevant in the present case – are functions by virtue of which individuals have imposed on them a will [sic] the immediate effectiveness of which, albeit subject to review, does not require their consent.
84. It is for the referring tribunal to establish whether the companies concerned exercise authority of that kind, that is to say, whether, in the course of managing water and sewerage services, the companies concerned are entitled to impose on individuals obligations for which they do not require the consent of those individuals, even though the individuals concerned may contest those obligations before the courts. In other words, the referring tribunal must determine whether the companies concerned are in a position substantially equivalent to that of the administrative authorities.
85. However, in order to offer the referring tribunal some guidance which may be helpful to it, it should be pointed out that it is important to establish, in particular, whether the companies concerned have, to some extent, powers of expropriation, powers of access to private property, powers to impose penalties and, in general, powers of enforcement vis-à-vis individuals, regardless of the fact that, when exercising those powers, they are also subject to judicial review, as public authorities stricto sensu always are.
116. That was not how the Court approached it. It did not seek to classify powers as State power or other powers. The judgment directs the national courts to compare the powers in question with those that arise from the rules of private law. That is a different exercise, with a different point of reference. For this reason, we do not consider it safe to rely on the reasoning of the Advocate General in the passages we have cited.
117. We do, though, find Ms Proops’ argument helpful as a check. We accept that the activities of Government are covered by head (a) in all the definitions. We also accept that Government can operate through the rules of private law. It is useful to ask whether duties, activities and services, and the means by which they are promoted, carried out and provided, would have been considered as public administrative functions if undertaken directly by Government. Applying this check, if Mr de la Mare’s argument were correct, it would remove from the comparison set by the CJEU (see paragraph 119 below) vast tracts of powers that would, if undertaken by Government, have been properly considered as public administrative functions. That would, in our view, be surprising.
The rules of private law
118. The proper interpretation of this part of the special powers test is important, because it explains the difference of approach between the parties. Mr de la Mare interpreted it to mean the powers that could be obtained by the exercise of the rules of private law. Take as an example section 159 of WIA, which authorises the laying of pipes in land other than a street:
(1) Subject to the following provisions of this section, to section 162(9) below and to the provisions of Chapter III of this Part, every relevant undertaker shall, for the purpose of carrying out its functions, have power—
(a) to lay a relevant pipe (whether above or below the surface) in any land which is not in, under or over a street and to keep that pipe there;
(b) to inspect, maintain, adjust, repair or alter any relevant pipe which is in any such land;
(c) to carry out any works requisite for, or incidental to, the purposes of any works falling within paragraph (a) or (b) above.
(2) Nothing in subsection (1) above shall authorise a water undertaker to lay a service pipe in, on or over any land except where—
(a) there is already a service pipe where that pipe is to be laid; or
(b) the undertaker is required to lay the pipe in, on or over that land by virtue of any of subsections (3) to (5) of section 46 above.
Mr de la Mare argued that that power is subject to limitations and safeguards set out in Schedule 6 and that the same powers could be acquired under private law through an easement or a licence. We accept both those arguments, but they do not show that the powers exemplified by section 159 cannot be special powers. The flaw in the argument lies in the comparator used by Mr de la Mare. He has chosen the powers that can be obtained by the exercise of the rules of private law. That is not correct for two reasons.
120. Second, if Mr de la Mare’s argument were right, the Court would have set a requirement that would effectively prevent the special powers test being satisfied in all but the most exceptional case. That would be surprising given the constitutional significance of the environment in the EU Constitution, and all the more so in respect of legislation that the Advocate General described in paragraph 92 of his Opinion as ‘pushing EU authority to its limits’.
121. The rules of private law include those of contract and property. They are essentially facilitative, allowing the parties to fix the terms on which they are willing to enter into a relationship. They are able to fix the terms of their contracts and to choose which rights of property to create from those recognised by law. They give the parties the power to negotiate and agree. The correlative is that they give a party the power to refuse to engage and to obstruct. Mr de la Mare’s argument overlooks that important difference. The companies have the power to compel or, in the case of a tandem power (to adopt Ms Proops’ phrase), effectively to compel. It may be that they do not have to use that power often, but it confers an important benefit that saves the need for the companies to negotiate in appropriate cases and, even if they were minded to do so, it could have an overweening effect on the course of the negotiations.
122. The law of property does recognise some rights that have not arisen from consent. For example: an easement may arise by implication or by prescription. The techniques by which it does so are instructive. Despite the fact that the court is imposing an analysis on the parties, the rules operate on the basis of assumed consent or acquiescence. Often, these are ways in which the law regularises activity for which no legal basis can be identified. As such, they arise only after an activity has become an established usage.
123. Moreover, Mr de la Mare’s argument only works because of the level of generality with which it is presented. It fails to take account of the personal equation. At what price would a landowner be prepared to allow pipes to be laid? Over what route? When would access be allowed for the work or for repairs – only at weekends, during school holidays or after the harvest is safely gathered in? The element of compulsion allows the companies effectively to override the individuality that can be a feature of the exercise of private law powers.
124. The rules of private law are not merely facilitative. They can also regulate what the parties may and may not do within a relationship. There are rules of public policy, rules about the validity and interpretation of exclusion clauses, and so on. They may be stated in the most general terms, but they usually operate within existing relationships. They may also operate where no legal relationship exists. For a common law example, take the right of self-help allowing access to another’s land in order to abate a nuisance. For a statutory example, take the Access to Neighbouring Land Act 1992. This allows landowners to gain access to neighbouring land in order to preserve their property. But even in these examples, the operation of the rule is narrowly confined by reference to the existing proximity of the land.
125. In contrast, some of the powers given to the companies operate outside any existing relationship and without any practical limit. Take section 168, which allows the companies access to land:
(1) Any person designated in writing for the purpose by a relevant undertaker may enter any premises for any of the purposes specified in subsection (2) below.
(2) The purposes mentioned in subsection (1) above are—
(a) the carrying out of any survey or tests for the purpose of determining—
(i) whether it is appropriate and practicable for the undertaker to exercise any relevant works power; or
(ii) how any such power should be exercised; or
(b) the exercise of any such power.
(3) The power, by virtue of subsection (1) above, of a person designated by a relevant undertaker to enter any premises for the purposes of carrying out any survey or tests shall include power—
(a) to carry out experimental borings or other works for the purpose of ascertaining the nature of the sub-soil; and
(b) to take away and analyse such samples of water or effluent or of any land or articles as the undertaker—
(i) considers necessary for the purpose of determining either of the matters mentioned in subsection (2)(a) above; and
(ii) has authorised that person to take away and analyse.
This is subject to Schedule 6 and may require a JP’s warrant. And, like the Access to Neighbouring Land Act 1992, it operates as between the company and an individual landowner. But in reality the power is wide and of a different nature. Given the company’s effective monopoly within its area, this is in effect a general power, operating against the whole world within the geographical area of its Licence. Section 168 is a particularly good example, because of two features. First, the conditions in which it applies: there need be no existing relationship with the landowner; it applies even if the company is not providing services to that particular land. Second, because of the extent of the power: it allows not only access, but surveying and even boring. This is unlike any rules of private law. It is more akin to general legislative powers that might be conferred on central or local government.
126. Section 76 is another example of a power that is not available under the normal rules of private law. At the time of the requests, the section provided as follows:
(1) If a water undertaker is of the opinion that a serious deficiency of water available for distribution by that undertaker exists or is threatened, that undertaker may, for such period as it thinks necessary, prohibit or restrict, as respects the whole or any part of its area, the use for the purpose of—
(a) watering private gardens; or
(b) washing private motor cars,
of any water supplied by that undertaker or a licensed water supplier and drawn through a hosepipe or similar apparatus.
(2) A water undertaker imposing a prohibition or restriction under this section shall, before it comes into force, give public notice of it, and of the date on which it will come into force, in two or more newspapers circulating in the locality affected by the prohibition or restriction.
(3) Any person who, at a time when a prohibition or restriction under this section is in force, contravenes its provisions shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 3 on the standard scale.
(4) Where a prohibition or restriction is imposed by a water undertaker under this section, charges made by the undertaker for the use of a hosepipe or similar apparatus shall be subject to a reasonable reduction and, in the case of a charge paid in advance, the undertaker shall make any necessary repayment or adjustment.
(5) In this section ‘private motor car’ means any mechanically propelled vehicle intended or adapted for use on roads other than—
(a) a public service vehicle, within the meaning of the Public Passenger Vehicles Act 1981; or
(b) a goods vehicle within the meaning of the Road Traffic Act 1988,
and includes any vehicle drawn by a private motor car.
The section has now been repealed and new sections 76-76C substituted by the Flood and Water Management Act 2010. Despite the substantial changes, the same point applies to both versions. The section authorises the companies to impose what were conveniently called at the hearing ‘hosepipe bans’. Section 76(3) (now section 76(5)) provides that a person who contravenes a prohibition is guilty of an offence and liable to a fine. That sets the power apart from any normal rules of private law. The definition of a criminal offence is a classic use of State power that has survived the changes in the role of the State over the previous century.
Susceptible to judicial review
127. In his closing remarks, Mr McCracken introduced the idea that the powers on which he relied were susceptible to challenge by way of judicial review and, as such, special powers. This is an attractive argument, and the companies can be subject to judicial review in respect of some of their powers: R v Northumbrian Water [1999] Env LR 715. There is, though, a danger of circularity in this argument. As we did not hear argument on this from the other parties, we have not relied on it.
Foster
128. Mr de la Mare referred us to this case, which was the decision of the House of Lords following the decision of the CJEU on the reference in that case. The House decided that British Gas’s monopoly on the supply of gas was a special power. Mr de la Mare argued that (i) this was the only example of a special power that had been identified and (ii) the House had provided a definition of a special power. We reject his argument on (ii). Lord Templeman set out section 29 of the Gas Act 1972, which confers the monopoly, and said (at 314):
This section conferred on the B.G.C. ‘special powers beyond those which result from the normal rules applicable in relations between individuals.’
Later (at 315) he said:
Similarly, I see no justification for a narrow or strained construction of the ruling of the European Court of Justice which applies to a body which has ‘special powers beyond those which result from the normal rules applicable in relations between individuals.’ The Act of 1972 conferred on the B.G.C. an express power to prevent anyone else from supplying gas in the United Kingdom. That power was a special power which could not have resulted from transactions between individuals.
129. There is nothing in Lord Templeman’s speech to support Mr de la Mare’s argument. The House was not attempting to provide a definition of special powers; it was merely explaining why the monopoly power was a special power. The case provides an example of a special power, nothing more.
Conclusion
130. For these reasons, we have decided that the companies have special powers. The powers we have mentioned are sufficient, collectively in themselves and as examples of powers of the same type, to satisfy the test laid down by the CJEU. As such, the companies are public authorities for the purposes of Aarhus, EID and EIR.
L. Control
The CJEU judgment
131. The CJEU explained in the second paragraph of its Order that a person was under another’s ‘control’:
… 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.
For convenience, we call this the control test. As in the case of the special powers test, this is merely a shorthand for the passage we have just quoted. The Court discussed this test at paragraphs 57 to 73 of its judgment.
132. The CJEU referred in its discussion to the functions that the companies perform (paragraphs 68 and 71), but in its formal answer it referred to the services they provide. We take those terms to be synonymous and use them accordingly. Other language versions use similar language.
133. The control test distinguishes between the functions that a body performs and the manner in which it performs them. It has to be applied to the manner of performance, not to the functions themselves. It is, therefore, irrelevant that the companies are by statute and their Licences required to perform specified functions. This includes the most basic functions allocated to the companies, such as the duty ‘to develop and maintain an efficient and economical system of water supply’ (section 37(1) of WIA) and ‘to provide, improve and extend such a system of public sewers … and so to cleanse and maintain those sewers … as to ensure that the area is and continues to be effectually drained’ (section 94(1) of WIA). In applying the control test, we are only concerned with the manner in which the companies perform those and other functions, although not at the lowest level of day-to-day management: see paragraph 71 of the CJEU’s judgment. This distinction between functions or services and the manner in which they are performed was not maintained in the arguments that were deployed against Mr de la Mare. To the extent that those arguments related to functions rather than performance, we reject them.
134. We read the judgment as laying down a single test with two elements that identify cause and effect: is a body performing its functions in ‘a genuinely autonomous manner’ (the effect) ‘since a public authority … is in a position to exert decisive influence on their action in the environmental field’ (the cause)?
135. The language of the cause element reflects the subtlety with which influence may be exerted. As we have said in the context of the special powers test, powers may have a value even when they are not exercised. All powers, whether special or not, may exert their value through influence. The existence of the power may be sufficient to direct the manner in which a company performs its functions. This may make it difficult to prove that influence is in fact operating, but that is essential under the cause element. It is not sufficient merely to show the potential for influence. It is necessary to show that it has had an actual impact on the companies’ decision-making. The test is only satisfied if they ‘do not determine in a genuinely autonomous manner’ how they provide their services.
136. As we read the control test, we have to take an overall view of whether in practice the companies operate in a genuinely autonomous manner in the provision of the services that relate to the environment. It is not sufficient to show that they do not do so in one or two marginal aspects of their business. Nor is it necessary to show that they do not do so in almost every aspect of their business. The CJEU has stated the test in a general way that excludes those extreme positions and requires an overview of the position in relation to environmental services. Although the Advocate General’s reasoning is different in its concepts from that adopted by the Court, one passage seems to be broadly consistent with its overall approach:
107. That being so, a body will be ‘under the control’ of the State where that body itself is a creation of the public authorities to enable the State to participate in private affairs in a private capacity or where, since it is formally a body independent of the public authorities, it is required to participate in private affairs subject to conditions imposed by the public authorities which make it impossible for it to act with substantive autonomy in relation to fundamental aspects of its corporate activities.
Authorities
137. We heard a variety of arguments on the status of Smartsource and the validity of its reasoning. They ranged from an argument that the decision on the control issue was to all intents and purposes binding on us to an argument that its reasoning was so fundamentally flawed that it could not be safely relied on. We consider it unnecessary and unhelpful to engage in an analysis of these arguments. We are not hearing an appeal against that decision. The appropriate course for a three-judge panel convened to apply the answers provided by the CJEU is to consider the issue afresh. That is what we have done.
138. We were referred to the decision of the House of Lords in Marcic v Thames Water Utilities Ltd [2004] 2 AC 42, in which the House referred at [11] to the ‘supervision and control’ exercised by the regulator. We do not find that helpful. The House was not applying the test we have to apply and the context was not comparable.
139. We were referred to two decisions in which the courts applied a control test. One was Foster, in which the CJEU had laid down a test whether a body was ‘performing a service under the control of the state and has for that purpose special powers …’ The other was Griffin v South West Water Services Ltd [1995] IRLR 15, in which Blackburne J applied that test. In his reference, Judge Jacobs asked about the relevance of the ‘emanation of the State’ test in Foster. The CJEU said, at paragraph 64 of its judgment, that satisfying that test was an ‘indication’ that the control test under Aarhus and EID was satisfied. It is, therefore, not decisive. There are, moreover, two reasons why we do not find these authorities helpful in applying the control test to the companies in these cases. First, the Court in Foster did not draw a distinction between functions and performance. Second, its test did not explicitly include a cause element, although this may be implied.
Corporate control
140. The CJEU referred, in paragraph 69 of its judgment, to the possibility of what could be called corporate control. It gave a number of examples, which are remarkably similar to the statutory provisions that applied in Foster, which was before the Court. The companies are not subject to this sort of control. As the Court in paragraph 69 made clear, these are but examples of the ways in which control might be exercised. They are not exhaustive, as the manner in which control is exercised is irrelevant.
Autonomy and influence
141. No legitimate business has complete freedom of action. All businesses are constrained by the law, by competition and market forces, and by the realities of business life. We need only provide a few examples of these self-evident truths. As to the law, businesses are limited by what is permissible under planning law and are required to comply with health and safety legislation, the Equality Act 2010 and employment law. Some are subject to forms of regulation, such as that exercised by Ofsted over child-minders. As to competition and market forces, no business can make customers buy products they do not want or at a price that is excessive compared to their competitors. As to the realities of business life, all businesses are subject to those who provide their finance. A corner shop is no less subject to the goodwill of its bank than a major public company depends on the continuing approval of the pension fund managers who invest in its shares. Constraints like these are always present as the background to, and set the limits within which, every business has to operate. But that does not prevent a business having genuine autonomy. In other words, autonomy has to be judged not by reference to absolute liberty, but against the normal background radiation of the constraints that limit the freedom of action for every business.
142. When influence becomes more than mere background, it may take various forms. Take a small family business that is financed by the directors and its bank. So long as business is going well, the bank’s potential power is in the background providing at most the outer limits of the company’s actions. When things are going wrong, the bank may take increasing interest. This might begin with a discussion that leads the directors to abandon their plans for expansion, followed by some advice or guidance that leads them to institute new methods of budgetary control, which may eventually lead to demands for redundancies to which they must accede rather than lose the company’s funding, which may now be made dependent on the bank having a seat on the board and perhaps special voting rights. So far, the management is still the responsibility of the board. A next step may be the appointment of a receiver or a liquidator. This simple but realistic example shows that circumstances may change the degree and extent of the influence that the bank can bring to bear on the company. Somewhere along the way, the line may have been crossed at which the company ceased to have genuine autonomy.
143. In other circumstances, there may be less scope for such a graduated flow of influence into a business. Take the example of a child-minder who is subject to regulation by Ofsted and required to comply with the standards it sets. It may take only a single incident for the regulator to intervene in the business and suspend the owner’s registration. To that extent, the freedom of action of all conscientious child-minders is constrained, as they wish to remain in business. But, despite the regulatory scheme, they retain such a degree of freedom to decide on the nature of their business and how they conduct it that they retain genuine autonomy.
144. These examples show that there are influences that operate in most businesses. Being subject to a degree of influence is not incompatible with a company having genuine autonomy in its decision-making. It is not just a case of taking account of the potential extent for intervention. That potential for influence can vary from being merely a background consideration that sets the limits of the company’s freedom for action to micromanaging all aspects of the company’s business, and every stage in between. It can vary from time to time and from one aspect of the company’s business to another. The more complex the company’s business, the more complex will be the varying pattern of control that can be exerted at any time and over time, and the greater the difficulty in showing that overall the business has no genuine autonomy of action.
The case against the companies
145. The case presented against the companies proceeded in two ways. First, by way of specific instances of actual involvement in the companies’ business. Second, by way of inference from the existence of the potential for such involvement. We take those in turn, beginning with the specific instances.
146. Mr McCracken referred us to the 328 page Report of the Inquiry into the Thames Water Revised Draft Water Resources Management Plan 2010-2015, in which the Inspector made a series of 25 recommendations, and to the Secretary of State conclusions following that Report. These Plans are governed by sections 37A-37D of WIA. Their purpose is to provide a long term plan to show how each company will be able to meet its obligation to maintain a water supply system. It is undoubtedly the case that this Report is an instance of strategic oversight of, and interference with, the planned delivery by Thames Water of its services.
147. If the Thames Water Report might be termed an example of macro involvement, Mr Wolfe referred us to an example of micro involvement. He showed us a final enforcement notice issued by OFWAT under section 18(1) of WIA, requiring United Utilities plc within 19 months to remedy its failure to deal with the risk of sewer flooding in respect of a small number of properties in the Penketh area. This is undoubtedly an instance of detailed oversight of the company to ensure that it complied with its statutory duty, but it is concerned with the manner in which the company has to carry out that duty only to the extent of having set a timetable for compliance.
148. To conclude on these specific instances, they do show involvement by the Secretary of State and OFWAT in the way the companies perform their duties and we accept that these are but examples of such instances. But they have to be kept in perspective. They show increased intensity of oversight at particular times and in respect of particular activities. The companies do not attract such intervention, whether at the macro or micro level, in respect of most of their activities. As a proposition of general experience, enforcement is only an effective tool if it is exceptional. There comes a point at which enforcement is so frequent that it ceases to be a viable option. At this point, the management of the business or activity has to be taken over or the business or activity has to be closed down. No one argued that that point was in prospect, or likely to be in prospect, in respect of any of the companies.
149. We now turn from specific instances of involvement in the companies’ business to the extent to which there is potential for influence. Mr Wolfe’s argument is indicative of the approach. He provided 12 pages of instances in which public authorities had the power to exert decisive influence over the companies. Just to take one example at random, he referred to section 115 of WIA, which deals with the use of highway drains as sewers and vice versa. He described the control or influence as:
Cannot
unreasonably refuse request or insist on unreasonable terms
SoS binding/final determination of disputes over reasonableness (S115(5) WIA)
Must accept if use is in accordance with system approved pursuant to Flood and
Water Management Act Immigration (European Economic Area) Regulations 2000
He then set out the way that decisive influence was exerted:
Public authority can suspend, annul after the event or requires prior authorisation of decisions
150. It is possible to analyse each of the powers listed by Mr Wolfe individually. Just to take an example, Mr de la Mare argued that the power of direction in respect of fluoridation of water under section 87 of WIA is very limited. We do not follow that approach. Instead we reject the method of argument that section 115 of WIA illustrates for three reasons.
151. First, some of the potential for influence arises from the need to provide a substitute for the competition and market forces that operate generally. Those forces are absent because of the companies’ effective monopoly. Regulation seeks to remedy that by providing a substitute. To take one example from Mr McCracken’s argument, OFWAT has power under section 143(6) of WIA to withhold approval of a company’s charging scheme. As we have said, competition and market forces are part of the background radiation against which business operates. To the extent that regulation is a substitute for those forces, it is merely part of the background against which the companies perform their services and consistent with the exercise of genuine autonomy.
152. Second, this method of argument proceeds from cynicism. In effect, the argument is that the companies only perform their obligations because of the powers available to the Secretary of State, OFWAT and the EA. We reject that basis of argument. It is insufficient to satisfy the effect element of the control test. Parties do not generally honour their obligations just because they will be subject to enforcement if they don’t. Contracting parties perform their contracts because they want what they have contracted for, motorists keep to the speed limit (more or less) because it is the safe and responsible thing to do, and child-minders refrain from abusing the children in their care because it is wrong to mistreat children. The risk of enforcement is at most only a marginal consideration for a reputable party, and no one argued that the companies are not reputable.
153. Third, the argument lacks balance. It presents the extent to which influence is possible, but fails to present the other side, which is the extent to which the companies in practice retain freedom over the way in which they provide their services. That overall view is essential to apply the CJEU’s control test. The companies are commercial companies. We accept that this does not prevent them being subject to control, as the CJEU said in paragraph 70 of its judgment, but there is more. Each is run by an independent board of directors that is answerable to the shareholders and subject to the usual controls that operate under company law. If the companies were subject to sufficient control to deprive them of genuine autonomy of action in the way they deliver their services, they would in effect be run by shadow directors within the meaning of section 251(2) of the Companies Act 2006. An important reason for privatisation of the water industry was to allow the companies access to private funding and the fact that they are able to attract it is evidence that they are able to operate freely in a manner acceptable to the capital markets. The extent of their freedom is apparent from our statement of the legal structure of the water industry. Despite the extent to which there is scope to influence the companies’ decision-making on the way it delivers its services, the evidence does not show that that influence is actually exerted to such an extent that overall the companies lack genuine autonomy. Influence is undoubtedly exerted and can be extensive, but it is relatively marginal compared to the extent of the actual freedom exercised.
154. There is much merit in Mr de la Mare’s detailed criticisms of the other parties’ arguments on the control test. We have not adopted them, in whole or in part, because we consider that those arguments are flawed in the more fundamental ways that we have just set out. It is not necessary to descend to his level of detail. The evidence is not sufficient to show that the control test is satisfied.
Conclusion
155. The control test 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 and 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.
IV OVERALL CONCLUSIONS
156. For these reasons, we have decided that:
· the Upper Tribunal has jurisdiction on appeal over the public authority issue;
· the companies are public authorities under the special powers test, but not under the control test;
· they provided the information requested by Fish Legal and Mrs Shirley late; but
· no further steps are required of them;
· the decisions of the First-tier Tribunal are re-made to that effect.
|
Signed on original |
Mr Justice Charles
Edward Jacobs Paula Gray |
APPENDIX A
Relevant Provisions of FOIA
PART
IV
ENFORCEMENT
50 Application for decision by Commissioner
(1) Any person (in this section referred to as ‘the complainant’) may apply to the Commissioner for a decision whether, in any specified respect, a request for information made by the complainant to a public authority has been dealt with in accordance with the requirements of Part I.
(2) On receiving an application under this section, the Commissioner shall make a decision unless it appears to him—
(a) that the complainant has not exhausted any complaints procedure which is provided by the public authority in conformity with the code of practice under section 45,
(b) that there has been undue delay in making the application,
(c) that the application is frivolous or vexatious, or
(d) that the application has been withdrawn or abandoned.
(3) Where the Commissioner has received an application under this section, he shall either—
(a) notify the complainant that he has not made any decision under this section as a result of the application and of his grounds for not doing so, or
(b) serve notice of his decision (in this Act referred to as a ‘decision notice’) on the complainant and the public authority.
(4) Where the Commissioner decides that a public authority—
(a) has failed to communicate information, or to provide confirmation or denial, in a case where it is required to do so by section 1(1), or
(b) has failed to comply with any of the requirements of sections 11 and 17,
the decision notice must specify the steps which must be taken by the authority for complying with that requirement and the period within which they must be taken.
(5) A decision notice must contain particulars of the right of appeal conferred by section 57.
(6) Where a decision notice requires steps to be taken by the public authority within a specified period, the time specified in the notice must not expire before the end of the period within which an appeal can be brought against the notice and, if such an appeal is brought, no step which is affected by the appeal need be taken pending the determination or withdrawal of the appeal.
(7) This section has effect subject to section 53.
51 Information notices
(1) If the Commissioner—
(a) has received an application under section 50, or
(b) reasonably requires any information—
(i) for the purpose of determining whether a public authority has complied or is complying with any of the requirements of Part I, or
(ii) for the purpose of determining whether the practice of a public authority in relation to the exercise of its functions under this Act conforms with that proposed in the codes of practice under sections 45 and 46,
he may serve the authority with a notice (in this Act referred to as ‘an information notice’) requiring it, within such time as is specified in the notice, to furnish the Commissioner, in such form as may be so specified, with such information relating to the application, to compliance with Part I or to conformity with the code of practice as is so specified.
(2) An information notice must contain—
(a) in a case falling within subsection (1)(a), a statement that the Commissioner has received an application under section 50, or
(b) in a case falling within subsection (1)(b), a statement—
(i) that the Commissioner regards the specified information as relevant for either of the purposes referred to in subsection (1)(b), and
(ii) of his reasons for regarding that information as relevant for that purpose.
(3) An information notice must also contain particulars of the right of appeal conferred by section 57.
(4) The time specified in an information notice must not expire before the end of the period within which an appeal can be brought against the notice and, if such an appeal is brought, the information need not be furnished pending the determination or withdrawal of the appeal.
(5) An authority shall not be required by virtue of this section to furnish the Commissioner with any information in respect of—
(a) any communication between a professional legal adviser and his client in connection with the giving of legal advice to the client with respect to his obligations, liabilities or rights under this Act, or
(b) any communication between a professional legal adviser and his client, or between such an adviser or his client and any other person, made in connection with or in contemplation of proceedings under or arising out of this Act (including proceedings before the Tribunal) and for the purposes of such proceedings.
(6) In subsection (5) references to the client of a professional legal adviser include references to any person representing such a client.
(7) The Commissioner may cancel an information notice by written notice to the authority on which it was served.
(8) In this section ‘information’ includes unrecorded information.
PART
V
APPEALS
57 Appeal against notice served under Part IV.
(1) Where a decision notice has been served, the complainant or the public authority may appeal to the Tribunal against the notice.
(2) A public authority on which an information notice or an enforcement notice has been served by the Commissioner may appeal to the Tribunal against the notice.
(3) In relation to a decision notice or enforcement notice which relates—
(a) to information to which section 66 applies, and
(b) to a matter which by virtue of subsection (3) or (4) of that section falls to be determined by the responsible authority instead of the appropriate records authority,
subsections (1) and (2) shall have effect as if the reference to the public authority were a reference to the public authority or the responsible authority.
58 Determination of appeals
(1) If on an appeal under section 57 the Tribunal considers—
(a) that the notice against which the appeal is brought is not in accordance with the law, or
(b) to the extent that the notice involved an exercise of discretion by the Commissioner, that he ought to have exercised his discretion differently,
the Tribunal shall allow the appeal or substitute such other notice as could have been served by the Commissioner; and in any other case the Tribunal shall dismiss the appeal.
(2) On such an appeal, the Tribunal may review any finding of fact on which the notice in question was based.
APPENDIX B
Parts IV and V of FOIA as Modified by EIR
PART
IV
ENFORCEMENT
50 Application for decision by Commissioner
(1) Any person (in this section referred to as ‘the complainant’) may apply to the Commissioner for a decision whether, in any specified respect, a request for information made by the complainant to a public authority has been dealt with in accordance with the requirements of Parts 2 and 3 of these Regulations.
(2) On receiving an application under this section, the Commissioner shall make a decision unless it appears to him—
(a) that the complainant has not exhausted any complaints procedure which is provided by the public authority in conformity with the code of practice under regulation 16(1),
(b) that there has been undue delay in making the application,
(c) that the application is frivolous or vexatious, or
(d) that the application has been withdrawn or abandoned.
(3) Where the Commissioner has received an application under this section, he shall either—
(a) notify the complainant that he has not made any decision under this section as a result of the application and of his grounds for not doing so, or
(b) serve notice of his decision (in these Regulations referred to as a ‘decision notice’) on the complainant and the public authority.
(4) Where the Commissioner decides that a public authority—
(a) has failed to communicate information, or to provide confirmation or denial [under regulation 12(6) or 13(5)], in a case where it is required to do so by regulation 5(1), or
(b) has failed to comply with any of the requirements of regulations 6, 11 or 14,
the decision notice must specify the steps which must be taken by the authority for complying with that requirement and the period within which they must be taken.
(5) A decision notice must contain particulars of the right of appeal conferred by section 57.
(6) Where a decision notice requires steps to be taken by the public authority within a specified period, the time specified in the notice must not expire before the end of the period within which an appeal can be brought against the notice and, if such an appeal is brought, no step which is affected by the appeal need be taken pending the determination or withdrawal of the appeal.
(7) This section has effect subject to section 53.
51 Information notices
(1) If the Commissioner—
(a) has received an application under section 50, or
(b) reasonably requires any information—
(i) for the purpose of determining whether a public authority has complied or is complying with any of the requirements of Parts 2 and 3 of these Regulations, or
(ii) for the purpose of determining whether the practice of a public authority in relation to the exercise of its functions under these Regulations conforms with that proposed in the codes of practice under sections 45 and 46,
he may serve the authority with a notice (in these Regulations referred to as ‘an information notice’) requiring it, within such time as is specified in the notice, to furnish the Commissioner, in such form as may be so specified, with such information relating to the application, to compliance with Parts 2 and 3 of these Regulations or to conformity with the code of practice as is so specified.
(2) An information notice must contain—
(a) in a case falling within subsection (1)(a), a statement that the Commissioner has received an application under section 50, or
(b) in a case falling within subsection (1)(b), a statement—
(i) that the Commissioner regards the specified information as relevant for either of the purposes referred to in subsection (1)(b), and
(ii) of his reasons for regarding that information as relevant for that purpose.
(3) An information notice must also contain particulars of the right of appeal conferred by section 57.
(4) The time specified in an information notice must not expire before the end of the period within which an appeal can be brought against the notice and, if such an appeal is brought, the information need not be furnished pending the determination or withdrawal of the appeal.
(5) An authority shall not be required by virtue of this section to furnish the Commissioner with any information in respect of—
(a) any communication between a professional legal adviser and his client in connection with the giving of legal advice to the client with respect to his obligations, liabilities or rights under these Regulations, or
(b) any communication between a professional legal adviser and his client, or between such an adviser or his client and any other person, made in connection with or in contemplation of proceedings under or arising out of these Regulations (including proceedings before the Tribunal) and for the purposes of such proceedings.
(6) In subsection (5) references to the client of a professional legal adviser include references to any person representing such a client.
(7) The Commissioner may cancel an information notice by written notice to the authority on which it was served.
(8) In this section ‘information’ includes unrecorded information.
PART
V
APPEALS
57 Appeal against notice served under Part IV.
(1) Where a decision notice has been served, the complainant or the public authority may appeal to the Tribunal against the notice.
(2) A public authority on which an information notice or an enforcement notice has been served by the Commissioner may appeal to the Tribunal against the notice.
(3) In relation to a decision notice or enforcement notice which relates—
(a) to information to which regulations 17(2) to (5) apply, and
(b) to a matter which by virtue of subsection (3) or (4) of that section falls to be determined by the responsible authority instead of the appropriate records authority,
subsections (1) and (2) shall have effect as if the reference to the public authority were a reference to the public authority or the responsible authority.
58 Determination of appeals
(1) If on an appeal under section 57 the Tribunal considers—
(a) that the notice against which the appeal is brought is not in accordance with the law, or
(b) to the extent that the notice involved an exercise of discretion by the Commissioner, that he ought to have exercised his discretion differently,
the Tribunal shall allow the appeal or substitute such other notice as could have been served by the Commissioner; and in any other case the Tribunal shall dismiss the appeal.
(2) On such an appeal, the Tribunal may review any finding of fact on which the notice in question was based.
APPENDIX C
Relevant Paragraphs in the CJEU Judgment
Fish Legal and Emily
Shirley v Information Commissioner, United Utilities Water plc, Yorkshire Water
Services Ltd and Southern Water Services Ltd
Case C-279/12
[2014] QB 521
Introductory observations
35 First of all, it should be recalled that, by becoming a party to the Aarhus Convention, the European Union undertook to ensure, within the scope of EU law, a general principle of access to environmental information held by or for public authorities: see Ville de Lyon v Caisse des dépôts et consignations (Case C-524/09) [2010] ECR I-14115, para 36 and Flachglas Torgau GmbH v Federal Republic of Germany (Case C-204/09) [2013] QB 212, para 30.
36 As recital (5) in the Preamble to Directive 2003/4 confirms, in adopting that Directive the EU legislature intended to ensure the consistency of EU law with the Aarhus Convention with a view to its conclusion by the Community, by providing for a general scheme to ensure that any natural or legal person in a member state has a right of access to environmental information held by or on behalf of public authorities, without that person having to state an interest: see the Flachglas Torgau case, para 31.
37 It follows that, for the purposes of interpreting Directive 2003/4, account is to be taken of the wording and aim of the Aarhus Convention, which that Directive is designed to implement in EU law: see the Flachglas Torgau case, para 40.
38 In addition, the court has already held that, while the Aarhus Convention Implementation Guide may be regarded as an explanatory document, capable of being taken into consideration, if appropriate, among other relevant material for the purpose of interpreting the convention, the observations in the guide have no binding force and do not have the normative effect of the provisions of the Aarhus Convention: see Solvay v Région Wallonne (Case C-182/10) [2012] Env LR 545, para 27.
39 Finally, it should also be noted that the right of access guaranteed by Directive 2003/4 applies only to the extent that the information requested satisfies the requirements for public access laid down by that Directive, which means inter alia that the information must be ‘environmental information’ within the meaning of article 2(1) of the Directive, a matter which is for the referring tribunal to determine in the main proceedings: see the Flachglas Torgau case, para 32.
Questions (1) and (2)
40 By its first two questions, which it is appropriate to deal with together, the referring tribunal seeks in essence to ascertain the criteria for determining whether entities such as the water companies concerned can be classified as legal persons which perform ‘public administrative functions’ under national law, within the meaning of article 2(2)(b) of Directive 2003/4.
41 Under article 2(2)(b) of Directive 2003/4, a provision essentially identical to article 2(2)(b) of the Aarhus Convention, the term ‘public authority’ covers ‘any natural or legal person performing public administrative functions under national law, including specific duties, activities or services in relation to the environment’.
42 According to settled case law, the need for the uniform application of EU law and the principle of equality require that the terms of a provision of EU law which makes no express reference to the law of the member states for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union, which must take into account the context of that provision and the purpose of the legislation in question: see, inter alia, the Flachglas Torgau case, para 37.
43 In the present case, it must, firstly, be determined whether the phrase ‘under national law’ is to be understood as an express reference to national law—here, to United Kingdom law—for the purpose of interpreting the concept of ‘public administrative functions’.
44 In this regard, there is a disparity between the English and French versions of article 2(2)(b) of Directive 2003/4 corresponding to the divergence between the versions in the same languages of article 2(2)(b) of the Aarhus Convention, the authentic texts of which include the French and English versions. In the French version of article 2(2)(b) of Directive 2003/4, the phrase ‘under national law’ is linked to the verb ‘perform’, so that, in this version, the provision's terms cannot be understood as making express reference to national law as regards the definition of ‘public administrative functions’. In the English version of the same provision, that phrase is, by contrast, placed after the words ‘public administrative functions’ and is consequently not linked to that verb.
45 Recital (7) in the Preamble to Directive 2003/4 sets out the objective of preventing disparities between the laws in force concerning access to environmental information from creating inequality within the European Union as regards access to such information or as regards conditions of competition. This objective requires that determination of the persons obliged to grant access to environmental information to the public be subject to the same conditions throughout the European Union, and therefore the concept of ‘public administrative functions’, within the meaning of article 2(2)(b) of Directive 2003/4, cannot vary according to the applicable national law.
46 This interpretation is supported by the Aarhus Convention Implementation Guide, according to which the phrase ‘under national law’ means ‘that there needs to be a legal basis for the performance of the functions under [article 2(2)(b)]’, this sub-paragraph covering ‘any person authorised by law to perform a public function’. That cannot be called into question by the fact that the guide adds that ‘what is considered a public function under national law may differ from country to country’.
47 In this context, contrary to what the Information Commissioner and the water companies concerned submitted at the hearing, if that phrase were to be interpreted as referring to the need for a legal basis to exist, it would not be superfluous since it confirms that performance of the public administrative functions must be based on national law.
48 It follows 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. On the other hand, the question whether the functions vested in such entities under national law constitute ‘public administrative functions’ within the meaning of that provision must be examined in the light of EU law and of the relevant interpretative criteria provided by the Aarhus Convention for establishing an autonomous and uniform definition of that concept.
49 Secondly, as regards the criteria that must be taken into account in order to determine whether functions performed under national law by the entity concerned are ‘public administrative functions’ within the meaning of article 2(2)(b) of Directive 2003/4, the court has already stated that it is apparent from both the Aarhus Convention itself and Directive 2003/4 that in referring to ‘public authorities’ the authors intended to refer to administrative authorities, since within states it is those authorities which are usually required to hold environmental information in the performance of their functions: see Flachglas Torgau GmbH v Federal Republic of Germany (Case C-204/09) [2013] QB 212, para 40.
50 In addition, the Aarhus Convention Implementation Guide explains that ‘a function normally performed by governmental authorities as determined according to national law’ is involved but it does not necessarily have to relate to the environmental field as that field was mentioned only by way of an example of a public administrative function.
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 1991 Act, 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.
55 It is for the referring tribunal to determine whether, having regard to the specific rules attaching to them in the applicable national legislation, these rights and powers accorded to the water companies concerned can be classified as special powers.
56 In the light of the foregoing, the answer to the first two questions referred is that, in order to determine whether entities such as the water companies concerned can be classified as legal persons which perform ‘public administrative functions’ under national law, within the meaning of article 2(2)(b) of Directive 2003/4, it should be examined 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.
Questions (3) and (4)
57 By its third and fourth questions, which it is appropriate to deal with together, the referring tribunal seeks in essence to ascertain the criteria for determining whether entities such as the water companies concerned, which, it is not disputed, provide public services relating to the environment, are under the control of a body or person falling within article 2(2)(a) or (b) of Directive 2003/4, and should therefore be classified as ‘public authorities’ by virtue of article 2(2)(c) of that Directive.
58 In the present instance, the question arises whether the existence of a regime such as that laid down by the 1991 Act, in as much as it places supervision of the water companies concerned in the hands of the Secretary of State and OFWAT, bodies which, it is not disputed, are public authorities referred to in article 2(2)(a) of Directive 2003/4, means that those companies are ‘under the control’ of those bodies, within the meaning of article 2(2)(c) of the Directive.
59 In their written observations, the Information Commissioner, the water companies concerned and the United Kingdom Government submit that the fact that the water companies concerned are subject to an, admittedly relatively strict, system of regulation does not mean that they are subject to ‘control’ within the meaning of article 2(2)(c) of Directive 2003/4. They submit that, as the Upper Tribunal (Administrative Appeals Chamber) noted in the decision in Smartsource Drainage & Water Reports Ltd v Information Comr [2011] JPL 455, a fundamental difference exists between a system of ‘regulation’, which includes only the power for the regulator to determine the objectives that must be pursued by the regulated entity, and a system of ‘control’, which enables the regulator additionally to determine the way in which those objectives must be attained by the entity concerned.
60 In this context, the Aarhus Convention Implementation Guide states that, whilst article 2(2)(c) of the Aarhus Convention, a provision essentially identical to article 2(2)(c) of Directive 2003/4, covers ‘at a minimum’ persons ‘that are publicly owned’, it may ‘furthermore … cover entities performing environment-related public services that are subject to regulatory control’.
61 In relation to this concept of ‘control’, the referring tribunal asks, in the context of its fourth question, what relevance might be attached to the judgment of the High Court of England and Wales in Griffin v South West Water Services Ltd [1995] IRLR 15, to which the Aarhus Convention Implementation Guide also refers in the context of article 2(2)(c) of the Convention.
62 In that judgment, it was held in particular that the criterion relating to control, referred to in Foster v British Gas plc (Case C-188/89) [1991] 1 QB 405; [1990] ECR I-3313, para 20, was not to be understood as meaning that it would not cover a system of regulation, such as the system laid down by the 1991 Act, and that that system satisfied the criterion relating to control, so that, as the other criteria were also met, Council Directive 75/129/EEC of 17 February 1975 on the approximation of the laws of the member states relating to collective redundancies (OJ 1975 L48, p 29) could be relied on against the water company involved in those national proceedings as an ‘emanation of the state’.
63 In this context, the referring tribunal specifically asks whether a water company, as an ‘emanation of the state’, is necessarily a legal person caught by article 2(2)(c) of Directive 2003/4.
64 Where a situation of control is found when applying the criteria adopted in the Foster case, para 20, that may be considered to constitute an indication that the control condition in article 2(2)(c) of Directive 2003/4 is satisfied, since in both of those contexts the concept of control is designed to cover manifestations of the concept of ‘state’ in the broad sense best suited to achieving the objectives of the legislation concerned.
65 The precise meaning of the concept of control in article 2(2)(c) of Directive 2003/4 must, however, be sought by taking account also of that Directive's own objectives.
66 It is apparent from article 1(a)(b) of Directive 2003/4 that its objectives are, in particular, to guarantee the right of access to environmental information held by or for public authorities, to set out the basic terms and conditions of, and practical arrangements for, exercise of that right and to achieve the widest possible systematic availability and dissemination to the public of such information.
67 Thus, in defining three categories of public authorities, article 2(2) of Directive 2003/4 is intended to cover a set of entities, whatever their legal form, that must be regarded as constituting public authority, be it the state itself, an entity empowered by the state to act on its behalf or an entity controlled by the state.
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 para 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.
72 It is for the referring tribunal to determine whether, in the cases in the main proceedings, the system laid down by the 1991 Act means that the water companies concerned do not have genuine autonomy vis-à-vis the supervisory authorities comprised by the Secretary of State and OFWAT.
73 In the light of the foregoing, the answer to the third and fourth questions referred is that undertakings, such as the water companies concerned, 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) of Directive 2003/4, and should therefore be classified as ‘public authorities’ by virtue of article 2(2)(c) of that Directive, 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.
Question (5)
74 By its fifth question, the referring tribunal asks in essence whether article 2(2)(b)(c) of Directive 2003/4 must be interpreted as meaning that, where a person falls within that provision in respect of some of its functions, responsibilities or services, that person constitutes a public authority only in respect of the environmental information which it holds in the context of those functions, responsibilities and services.
75 The possibility of such a hybrid interpretation of the concept of a public authority was advanced in particular in the national proceedings that led to the decision in the Smartsource case. In that context, it was submitted in particular that if the water companies were to fall within article 2(2)(b) of Directive 2003/4 because they performed certain public administrative functions, that provision could be interpreted as meaning that those companies would be obliged to disclose only environmental information held by them in the performance of those functions.
76 It must be held that, apart from the fact that a hybrid interpretation of the concept of a public authority is liable to give rise to significant uncertainty and practical problems in the effective implementation of Directive 2003/4, that approach does not, as such, find support in the wording or the scheme of that Directive or of the Aarhus Convention .
77 On the contrary, such an approach conflicts with the foundations of both Directive 2003/4 and the Aarhus Convention as regards the way in which the scope of the access regime laid down by them is set out, a regime which is designed to achieve the widest possible systematic availability and dissemination to the public of environmental information held by or for public authorities.
78 As is clear from article 3(1) of Directive 2003/4, the Directive's central provision which is essentially identical to article 4(1) of the Aarhus Convention, if an entity is classified as a public authority for the purposes of one of the three categories referred to in article 2(2) of that Directive, it is obliged to disclose to any applicant all the environmental information falling within one of the six categories of information set out in article 2(1) of the Directive that is held by or for it, except where the application is covered by one of the exceptions provided for in article 4 of the Directive.
79 Thus, persons covered by article 2(2)(b) of Directive 2003/4 must, as the Advocate General has stated in points 116 and 118 of his opinion, be regarded, for the purposes of the Directive, as public authorities in respect of all the environmental information which they hold.
80 Also, as follows from para 73 of the present judgment, in the specific context of article 2(2)(c) of Directive 2003/4 commercial companies such as the water companies concerned are capable of being a public authority by virtue of that provision 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 Directive 2003/4.
81 It follows that such companies are required to disclose only environmental information which they hold in the context of the supply of those public services.
82 On the other hand, as the Advocate General has essentially stated in point 121 of his opinion, those companies are not required to provide environmental information if it is not disputed that the information does not relate to the provision of those public services. If it remains uncertain that that is the case, the information in question must be provided.
83 Accordingly, the answer to the fifth question referred is 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.
On those grounds, the Court (Grand Chamber) hereby rules:
1 In order to determine whether entities such as United Utilities Water plc, Yorkshire Water Services Ltd and Southern Water Services Ltd can be classified as legal persons which perform ‘public administrative functions’ under national law, within the meaning of article 2(2)(b) of Parliament and Council Directive 2003/4/EC of 28 January 2003 on public access to environmental information and repealing Council Directive 90/313/EEC, it should be examined 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.
2 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) of Directive 2003/4, and should therefore be classified as ‘public authorities’ by virtue of article 2(2)(c) of that Directive, 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.
3 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 United Utilities Water plc, Yorkshire Water Services Ltd and Southern Water Services Ltd, 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.