Recent judgments by Information Commissioners in England and Scotland mean that some of the content of confidential agreements made with private firms may not be exempt from public scrutiny.
In the English case, Private Equity Intelligence, a company that gathers market data, asked local authorities two years ago for details of their investments in private equity, venture capital and real estate, including details on contributions and returns.
Council tenets
Local authority pension funds are estimated to hold £90bn or more in assets, and
last July Sir Michael Lyons, acting chairman of the Audit Commission, criticised
local government pension schemes for their lack of transparency.
Hertfordshire County Council and Tameside Metropolitan Borough Council both refused on the basis that the Freedom of Information Act 2000 exempts confidential information from disclosure.
But in the judgments in February this year, Information Commissioner Richard Thomas said the balance between public interest in disclosure and the interest in confidentiality rested in favour of publication. He pointed out that the cash invested was public money. “There is a clear public interest in… being able to scrutinise the council’s investment strategies,” he said.
Liz Fitzsimons, senior associate in the information law team at solicitors Eversheds, says the pension cases are the latest to show that it can no longer be assumed that a confidentiality agreement would prevent disclosure. “This ruling says that public bodies and private companies need to reconsider what constitutes ‘confidential’ and ‘public’ information when they enter into agreements,” she says.
“Not all information contained in a confidentiality agreement is actually going to be classed as confidential.” She adds that “many public and private organisations have often stamped the word ‘confidential’ on most agreements as a matter of course, even when some of the information contained within is fairly innocuous. Local authorities and companies are going to have to consider what information is actually ‘confidential’ and may not be disclosed, and assume that a lot more information is likely to be open to the public and competitors on request.”
Scots act
The Scottish Information Commissioner, Kevin Dunion, recently ruled that
confidential agreements between public sector bodies and private companies are
not watertight where public money is an issue.
Alan Keith, chairman of the Association of Dumfries and Galloway Accommodation Providers, had asked the Scottish Tourist Board (now VisitScotland) to supply full details of current and previous contracts between VisitScotland and visitscotland.com (eTourism Ltd). VisitScotland provided copies of some relevant contracts, but refused to supply others on the basis that these were exempt under the terms of the Freedom of Information (Scotland) Act 2002, which says that information is exempt if it was obtained by a Scottish public authority from another person and that its disclosure would constitute a breach of confidence.
But in June 2007, the Scottish Information Commissioner ruled that VisitScotland had failed to act in accordance with FOISA by refusing to supply copies of the contracts between VisitScotland and eTourism Ltd, and found that disclosure of these would not constitute an actionable breach of confidence. Therefore, the information must be disclosed.
OFT protection
Matthew Godfrey-Faussett, partner in the intellectual property and commercial
practice of McGrigors, says, “Confidentiality agreements are not what they used
to be. It is to be presumed that information is to be made public unless it
satisfies the exemptions laid out under the Act. There is very little to
prevent its disclosure.”
Some companies may have been given a false sense of security by a decision soon after the Act came into effect, which protected the financial details of a company that had been at the centre of an anti-competition investigation by the Office of Fair Trading. In 2005, drinks group Pernod Ricard made a request under the FOIA for access to all internal communications during a two-and-a-half year investigation by the OFT into possible competition infringements by Bacardi, one of Pernod’s major competitors. The investigation related to a possible abuse of Bacardi’s dominant position in the UK white rum market, but was eventually closed after Bacardi gave voluntary assurances in relation to its future conduct.
However, the FOIA request was denied. Under Part 9 of the Enterprise Act, the OFT is under a duty not to disclose information it has gathered during the course of investigations, and the decision not to release the information was upheld by the Information Commissioner.
Nicola Mumford, a partner in Wragge & Co’s dispute resolution group, says companies should think carefully before sending any documentation to a public authority: “If it is not absolutely necessary that the public authority is given the documentation, consider not sending it,” she says. “In the future, that documentation may have a greater significance, and there is a real risk it could easily get into the hands of a third party that has made a request under the FOIA.”
For more on freedom of information, click here.
