European Law directly applied to pre-Brexit personal injury claim (Wetherell v Student Loans Company Ltd)

The Court of Appeal held that Article 3(1) of Directive 2009/104/EC was capable of direct effect and could confer enforceable rights on workers against an emanation of the state in relation to defective work equipment. The court also clarified that, following Farrell v Whitty (No 2) [2018] QB 1179, the criteria for identifying an emanation of the state are alternative rather than cumulative, correcting the approach adopted below. Although the case was remitted for reconsideration of whether Student Loans Company Ltd satisfied that test, the decision is significant for pre-Brexit claims, as it confirms that employees may, in appropriate circumstances, rely directly on EU-derived rights where domestic statutory causes of action have been removed. It also provides important guidance on the continued treatment of retained pre-Brexit EU rights in legacy litigation.

What was the background?

The appellant, Mark Wetherell, brought a personal injury claim against his former employer, Student Loans Company Ltd (SLC). In 2014, he was employed by SLC as a call handler. He alleged that he developed tinnitus as a result of using a defective telephone headset supplied by SLC. Although SLC owed the appellant duties under the Provision and Use of Work Equipment Regulations 1998 (PUWER), by reason of section 69 of the Enterprise and Regulatory Reform Act 2013 (ERRA), the appellant no longer had a cause of action for breach of a statutory duty under PUWER.

The appellant did not bring a claim in negligence, apparently because it was common ground that a negligence claim would fail. Instead, the appellant relied upon Article 3(1) of Directive 2009/104/EC (the Directive), concerning minimum safety and health requirements for the use of work equipment by workers at work. This Directive underpinned PUWER and Regulation 4 of PUWER contained materially the same requirements as Article 3(1) of the Directive. The appellant contended that the Directive imposed a strict obligation requiring employers that were emanations of the state to ensure that work equipment could be used without impairment to workers’ safety or health. It is important to note that, at the time of the events forming the basis of the claim, the UK remained a Member State of the European Union (EU). The parties proceeded on the basis that the relevant EU law was that which was applicable before the United Kingdom’s withdrawal from the EU.

The proceedings originated in the County Court, where limitation was determined in the appellant’s favour as a preliminary issue. HH Judge Freedman subsequently dismissed the claim after determining, also as a preliminary issue, that SLC was not an ‘emanation of the state’ and that the Directive was therefore not directly enforceable against it. On appeal to the High Court, Mr Justice Eyre upheld that conclusion, applying the two-limbed test in Foster v British Gas plc [1991] 2 AC 306and holding that, although the SLC provided a public service under state control, it lacked the requisite ‘special powers’.

In a second appeal before the Court of Appeal, the principal issues were whether Article 3(1) of the Directive was capable of giving rise to enforceable rights and, if so, whether SLC qualified as an emanation of the state against whom those rights could be enforced vertically, as opposed to a private company or body against whom the rights could not be enforced horizontally.

What did the court decide?

The Court of Appeal allowed the appeal and remitted the matter to the County Court. Green LJ, giving the main judgment, held that Article 3(1) of the Directive gave rise to enforceable rights against an emanation of the state. Applying the principles in Van Gend en Loos [1963] ECR 1, Becker v Finanzamt Münster-Innenstadt [1982] ECR 53, Francovich v Italian Republic [1991] ECR I-5403 and Three Rivers District Council v Governor and Company of the Bank of England [2000] UKHL 33, the Court of Appeal held that the relevant test was whether the Directive granted rights to individuals and whether the content of those rights was identifiable, clear and unconditional. Article 3(1) met that test because it imposed a mandatory duty on employers to ensure that work equipment could be used without impairment to workers’ safety or health. It met the test of direct effect, meaning that an employee could advance this right which the court must protect in an effective manner, usually by providing a financial remedy.

The Court of Appeal rejected SLC’s submission that Article 3(2), which required employers to minimise risks where complete safety was not possible, rendered Article 3(1) insufficiently precise or conditional. The argument that the Framework Directive left Member States free to determine exclusively through domestic negligence and criminal law how to implement the Directive was also rejected. Referring to MG (Case C-792/22), the Court of Appeal held that although Member States retained procedural autonomy, they were still required to provide effective remedies for breaches of rights conferred by EU law.

On the issue of emanation of the state, the High Court had applied the wrong legal test because the parties had failed to place before the judge subsequent case law following Foster v British Gas. Following Farrell v Whitty (Case C-413/15) EU:C:2017:745 and MIB v Lewis [2019] EWCA Civ 909, it was apparent that the criteria identified in Foster v British Gas were alternative rather than cumulative. The relevant question was whether the body was either subject to the authority or control of the state or possessed special powers beyond those arising under ordinary private law. The High Court had incorrectly treated the existence of special powers as a mandatory additional requirement and set the bar too high.

Although the Court of Appeal considered that the appellant had advanced a persuasive case that SLC was under the authority or control of the state, it declined finally to determine the issue because the case had been argued below on an incorrect legal basis and the evidential record was incomplete. The case was remitted to the County Court for reconsideration applying the correct test. Green LJ observed that the relevant factual material concerning the statutory and administrative relationship between SLC, HM Treasury and HMRC was peculiarly within SLC’s knowledge and should be provided by it on remission. Lewis LJ agreed with the outcome and added that Article 3 of the Directive was intended to ensure enforceable rights were conferred on workers to be provided with safe work equipment, with damages likely to be the appropriate domestic remedy where breach caused loss.

What are the practical implications of this case?

The practical implications of this case are limited. This is because the Court of Appeal determined the case on the law as it stood in 2014, while the UK was still part of the EU. The Court of Appeal explicitly stated that the case has not been determined on the law as it now stands. Therefore, this case will be of interest to employers’ liability cases where use of defective work equipment took place before the end of 2020, when the Brexit transition period ended and where the employer is an emanation of the state. In such cases, assuming any limitation defence is overcome, the injured employee can directly rely on the obligation imposed on employers by Article 3(1) of the Directive to provide work equipment which is suitable and can be used without impairment to their safety or health. Naturally, this will be easier to prove than negligence. The Court of Appeal specifically limited their decision to Article 3(1) of the Directive, but this case provides the road map to employees enforcing other parts of the Directive, or other Directives, against employers who are emanations of the state.

It is important to remember that employees who are injured by defective equipment provided by their employers potentially have a domestic statutory remedy in addition to negligence. The Employers’ Liability (Defective Equipment) Act 1969 survived ERRA and places a non-delegable duty on employers with regards to work equipment. Where an employee sustains personal injury in the course of their employment as a result of a defect in equipment provided by their employer for the purposes of the employer’s business and the defect is attributable wholly or partly to the fault of a third party, the injury is deemed to be attributable to the fault of the employer.

Case details

• Court: Court of Appeal, Civil Division
• Judges: Lord Justice Baker, Lord Justice Green and Lord Justice Lewis
• Date of judgment: 22 May 2026

Article by Jasmine Murphy – first published by LexisNexis