Privates on parade

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.