Facts
- The case concerned the criteria for determining when an entity qualifies as an “emanation of the state” under European Union law.
- The Court of Justice of the European Union (CJEU) examined scenarios where the application of EU law depends on whether an entity is considered part of the state for legal purposes.
- The issue arose in the context of applying fundamental rights and non-discrimination principles to entities not obviously classifiable as public bodies.
- The CJEU addressed circumstances where an entity does not clearly meet all previously established criteria for emanation of the state.
Issues
- What constitutes an "emanation of the state" for the application of EU law?
- Does an entity need to satisfy all traditional criteria, or can it qualify by meeting new, distinct requirements?
- What is the impact of “special powers” granted by the state, or the degree of state control and the public service nature of the entity’s activities?
- How should the refined test be applied to entities performing public functions or operating under state oversight?
Decision
- The CJEU clarified and refined the test for identifying an emanation of the state, introducing a two-limb approach.
- It held that an entity may qualify as an emanation of the state if it satisfies either of two circumstances:
- First, if the state has delegated to the entity special powers beyond those granted to private entities, specifically for performing public interest tasks.
- Second, if the entity is subject to significant state control and is entrusted with providing a public interest service on that basis.
- The judgment emphasized that public funding or state regulation alone do not suffice; special powers or a demonstrably high degree of control in relation to public service provision must be present.
- The Court provided guidance on factual analyses, stressing the need to examine legal basis, state influence, and the nature of the service provided.
- The CJEU adopted a more flexible and structured approach than previous case law, allowing entities to qualify under either limb without requiring satisfaction of all traditional elements.
Legal Principles
- An “emanation of the state” may be found when an entity either has special legal powers delegated by the state or operates under significant state control in the provision of a public interest service.
- Mere public funding or regulation does not render an entity an emanation of the state.
- The legal form, level of control, and public service remit are essential considerations for classification.
- The refined test enables a more flexible application of EU law to private and public entities engaged in public functions.
- The application of this doctrine affects how fundamental rights and non-discrimination principles extend to entities beyond the core public sector.
Conclusion
The CJEU in Farrell v Whitty established that entities may be considered emanations of the state under EU law when they either exercise special powers delegated for public tasks or are subject to significant state control in delivering public services, providing a clearer two-limb framework for future determinations.