Introduction
The concept of an "emanation of the state" is critical within European Union law, particularly concerning the application of fundamental rights and the principle of non-discrimination. Determining whether an entity qualifies as an emanation of the state dictates whether it is bound by EU law provisions typically applicable to Member States. The Court of Justice of the European Union (CJEU) has developed specific criteria for this classification, requiring a detailed analysis of the entity's relationship with the state. These criteria include examining the entity's legal form, the degree of state control, and the performance of public interest tasks. This analysis necessitates careful consideration of the specific facts and circumstances of each case.
The Farrell Test: A Refinement of Existing Principles
The CJEU's judgment in Farrell v. Whitty (C-413/15) significantly refined the test for determining what constitutes an emanation of the state. Prior to Farrell, the prevailing understanding stemmed from cases like the earlier case v. British Gas plc (C-188/89), which established a multi-pronged test. Farrell, however, addressed a scenario where an entity did not clearly satisfy all of the earlier case criteria, prompting the Court to clarify the applicability of these criteria. The Court articulated a two-limb test, emphasizing that an entity could be considered an emanation of the state if it fulfills either limb.
First Limb: Special Powers Granted by the State
The first limb of the Farrell test focuses on whether the entity has been delegated special powers beyond those normally applicable to private entities. This involves examining if the state has granted the entity specific legal authority to perform tasks in the public interest. The specific legal basis and the extent of these powers are important considerations under this limb. The CJEU in Farrell noted that the mere provision of public funding or regulation by the state does not automatically qualify an entity as an emanation of the state under this limb. The power must be a special legal power going beyond the ordinary regulatory framework.
Second Limb: State Control and Public Service Remit
The second limb of the Farrell test considers whether the entity is subject to state control and entrusted with the operation of a service of public interest on the basis of that control. This limb requires a two-pronged assessment: the level of state control over the entity, and the connection between that control and the provision of the public service. The Court highlighted that the control must be significant and directly related to the provision of the public service. This could involve the state's influence over management, strategic decisions, or operational aspects of the entity. The service in question must be one that addresses a genuine public interest need, identified and defined by the state.
Application of the Farrell Test: Practical Examples
The practical application of the Farrell test necessitates a detailed factual analysis. Consider, for instance, a private company contracted by the state to manage a public transportation system. If the state exerts substantial control over the company's operations, including route planning, fare setting, and service standards, and this control is linked to the provision of the transportation service, the company might be considered an emanation of the state under the second limb of the Farrell test. Conversely, a private company providing a service indirectly related to the public interest, such as waste management, might not be considered an emanation of the state if the state control is limited to general regulatory oversight. The distinction lies in the degree and nature of the control and its connection to the specific public service.
Impact of Farrell on the Emanation of the State Doctrine
The Farrell judgment provides a valuable clarification of the emanation of the state doctrine. It offers a more flexible approach than the previous criteria from the earlier case, acknowledging that entities can qualify as emanations of the state even without fulfilling all of the traditional elements. This refinement has implications for various areas of EU law, including competition law, public procurement, and fundamental rights. By clarifying the criteria and offering a two-limbed approach, Farrell ensures greater legal certainty for both individuals and entities interacting with organizations performing public functions. It provides a structured framework for assessing the applicability of EU law in complex scenarios involving public and private actors.
Conclusion
The CJEU's judgment in Farrell v. Whitty represents a significant development in the jurisprudence surrounding the concept of an emanation of the state. The two-limbed test articulated in this case provides a clearer and more flexible framework for determining whether an entity falls within the scope of EU law provisions typically applicable to Member States. The Farrell test clarifies the importance of analyzing the specific factual circumstances, focusing on either the delegation of special powers or the combination of state control and public service provision. This clarification has significant practical implications across various areas of EU law, ensuring a more detailed and effective application of the principle. The Farrell judgment, therefore, contributes to a more robust understanding of the relationship between Member States, private entities, and the application of EU law principles.
