UK Privatised Water Companies – Not so Private!
The UK’s Upper Tribunal (“UT“) has ruled in Fish Legal v Information Commission and others that privatised water utility companies in England and Wales are considered to be “public authorities” for the purpose of the Environmental Information Regulations (2004) (“EIR“) due to their “special powers” above those of private law.
The judgement means that water companies are obliged to provide environmental information to the public upon request within one month, without the need for any justification from the requester as to why it is required. This will make it easier, and cheaper, for environmental campaigning groups and the general public to monitor water companies’ activity and obtain information that was previously unavailable. Further, the finding of water companies as “public authorities” is likely to have the knock-on effect of capturing other privatised industries, such as rail, gas, electrics and telecoms, in the EIR “net”.
Six years ago Fish Legal (a charity which takes legal actions on behalf of anglers), along with another applicant, requested information from three privatised water companies. The companies denied the request, arguing that they were not public authorities and therefore the EIR did not apply to them. The Information Commissioner and the First-tier Tribunal (Information Rights) agreed that the water companies were not public authorities and therefore the Information Commissioner did not have power to determine the dispute. The cases were appealed to the UT who also ruled that the water companies were not public authorities; however, the UT referred several questions to the Court of Justice of the European Union (“CJEU”). Specific clarification was requested on the meaning of “public authority” and on the application of regulation 2(2)(c) and (d) of the EIR (relating to a body that “carries out functions of public administration”; and a body that is under the control of a public authority, respectively).
In 2013, four years after the initial request for information, the CJEU published its ruling. In summary, it explained that companies will be carrying functions of public administration if they have “special powers beyond those which result from the normal rules applicable in relations between persons governed by private law” and the body would be considered to be under the control of a public authority if it does not provide its services in a genuinely autonomous way. It was then for the UT to apply the CJEU’s response to the facts of the Fish Legal case.
The 2015 UT Decision
Under the control of a public authority?
The UT found that the water companies determine, in a genuinely autonomous manner, how they provide their services and that, although all companies are subject to the influence of legal and commercial constraints to some degree, this alone was not sufficient to show a lack of autonomy. The water companies, therefore, did not satisfy the requirements of this limb of the public authority definition for the purpose of the EIR.
The Tribunal did not define further what is meant by “special powers”; however they mentioned the need for a “contrast between the powers vested in the bodies in question and those that result from the rules of private law”. The water companies in the Fish Legal case were found to have “special powers” and as such it was determined that they were public authorities for the purpose of the EIR. The powers that the Tribunal hooked on to and deemed to be “special” included:
compulsory purchase of land upon authorisation from the Secretary of State – providing commercial leverage in land purchase agreements;
the ability to make bylaws that are enforced by criminal sanctions;
the power to compel the laying of pipes;
entry to land that go further than private landowners'; and
the ability to impose hosepipe bans.
A simple glance at this list makes it clear that this could have a potentially wide and resonating impact on many other privatised, regulated industries – something that the Tribunal noted in their judgement. For example, the water companies’ power of compulsory purchase of land and the power to compel the laying of pipes are comparable powers to the ability of electricity companies to seek a compulsory purchase order and their ability to seek a “necessary” wayleaves for power lines. Private companies that provide a once public service should review their own powers in light of this judgement and assess whether action is needed to alter their information request handling.
Frustratingly, the UT would not be drawn on the number of “special powers” required for a company to be defined as a public authority under the EIR – it is therefore yet to be seen whether one “special power” alone would classify a company as a public authority or whether a number of “special powers” would be required. Either way, the impact of this judgement will most certainly ripple through other regulated private industries in the UK.