Mark Wetherell v Student Loans Company Limited

An undertaking is an emanation of the state for direct enforcement of a European directive only where it is responsible, under state control, for providing a public service and possesses special powers beyond those available between private persons. Administering a government-funded loan scheme, even as the sole administrative body, does not itself confer such a power where commercial lenders remain free to lend on their own terms. Whether domestic measures have implemented a directive requires a careful analysis of the directive, the domestic provisions, their context and other protective mechanisms. The absence of a civil cause of action is not, without more, proof of failed implementation.

The appellant brought a personal injury claim arising from noise allegedly caused by headset use while working for the respondent. He relied on European Directives 2009/104/EC and 2003/10/EC, contending that they were directly enforceable because the respondent was an emanation of the state.

HH Judge Freedman determined the enforceability issue as a preliminary issue and dismissed the claim, finding that the respondent was not an emanation of the state. The appellant appealed with permission on grounds concerning the respondent’s status, implementation of the Directives after the removal of civil liability for breach of the domestic regulations, and the effect of the United Kingdom’s withdrawal from the European Union.

1. Appeal dismissed. The finding that the respondent was not an emanation of the state was upheld and was determinative of the appeal.
2. Applying the two-limb test in Foster v British Gas Plc [1991] 2 AC 306, the respondent satisfied the first limb. It was wholly government-owned, administered the student-loan scheme and operated under state control. The scheme was a form of state benefit paid from public funds.
3. The second limb was not satisfied. The respondent’s sole responsibility for administering the scheme did not give it a legally enforceable monopoly over lending to students. Commercial lenders could make student loans without reference to the respondent. Nor had the appellant shown any other special power, such as a power of enforcement, going beyond ordinary private-law powers.
4. The court rejected the suggestion that the respondent’s administrative function, or any discretion it might have had in advancing loans, was itself a special power. The limited evidence justified the judge’s conclusion, and the comparison with health and local authorities was material.
5. The court considered the alternative implementation issue. Whether domestic provisions have implemented a directive requires careful analysis of the directive, the domestic provisions, their context and other provisions providing protection. The existence of criminal sanctions does not necessarily establish implementation, while the absence of civil liability does not necessarily establish failure to implement.
6. The appellant bore the burden of demonstrating ineffective implementation. His bare assertion that removal of civil liability under the Enterprise and Regulatory Reform Act 2013 meant that the Directives were no longer implemented was insufficient. Ground 2 therefore failed. The court did not determine the withdrawal issue because it was not argued in detail and the respondent did not rely on it to uphold the decision.

• High Court (King's Bench Division): appeal from the County Court at Newcastle dismissed. The High Court upheld HH Judge Freedman’s preliminary-issue decision that the respondent was not an emanation of the state.