Summary and implications

Veolia appealed against a decision requiring Nottinghamshire CC under the Audit Commission Act 1998 (the 1998 Act) to allow public access to information relating to a waste PFI contract for which it had successfully tendered. The appeal was allowed, with the Court deciding that any right of access to information under the 1998 Act should be subject to the overriding principle of protection of confidential information, as long as public interest factors of transparency and freedom of information do not outweigh the need to protect confidentiality.

Background to the case

In 2006, Nottinghamshire CC entered into a waste PFI contract with Veolia, following a tendering process under the Public Services Contracts Regulations 1993. In 2009, Shlomo Dowen, a local resident, applied to the Council to exercise his right under the 1998 Act to inspect and copy certain documents he claimed related to the Council’s statement of accounts. This included the schedules to the waste contract and Veolia’s monthly invoices for work done under the contract.

Veolia applied for an injunction to prevent the Council disclosing the documents. Veolia claimed that disclosure did not fall within the statutory right of inspection and copying and that they had been supplied to the Council on a confidential basis. It argued that the information was valuable to commercial competitors and to Veolia’s sub-contractors and could damage its ability to compete on bids with other local authorities or impair it in controlling subcontract prices.

Mr Dowen had already made requests for information in respect of Veolia’s waste contract using the Environmental Information Regulations (EIRs) and the Freedom of Information Act 2000 (FOIA). The Information Commissioner upheld the Council’s decision not to disclose the information in response to those requests. While the regime for requesting information under the 1998 Act differs from the regimes under the EIRs and the FOIA, the Court of Appeal noted that the issue of balancing public interest factors that arises in both regimes are strikingly similar. The Court of Appeal referred to the Information Commissioner’s ruling when coming to a decision on the 1998 Act request.

Original decision

The case was originally heard in the High Court in October 2009. The Court held that section 15 of the 1998 Act required the Council to disclose the documents, including all the confidential information in them, to a local voter, a “person interested” under the 1998 Act. The judgement contained a lot of semantics around what constituted “accounts” for the purposes of the 1998 Act. The analysis focused on whether the documents could be construed as “books, deeds, contracts, bills, vouchers and receipts relating to” the Council’s statement of accounts. On that occasion, the schedules to the waste contract and invoices were considered sufficiently connected to the accounts to merit that classification.

Appeal

Veolia appealed the decision using several different submissions. The first aspect of the appeal was based on the original argument that the documents in question were not to be taken as forming part of the accounts for the purposes of the 1998 Act. This argument was again rejected. The judge reiterated that the language in that statute was very wide and would be construed as such.

Veolia also argued that the 1998 Act should be read in the light of laws on privacy and the right to confidentiality. Although a number of arguments were considered, the judge focused on Article 1 of the first Protocol to the European Convention on Human Rights (the ECHR). Article 1 provides that every natural or legal person is entitled to the peaceful enjoyment of their “possessions”. The concept of possessions is broad and covers a range of things which have significant economic value. Although the parties to the appeal were unable to cite any European legal authority expressly stating that confidential information is a form of possession, no authority was cited against the proposition. Therefore, the Court of Appeal could see no reason why valuable commercial confidential information, such as the documents in question, could not fall within this concept.

Conclusion

The Court of Appeal concluded that any right under the 1998 Act should be subject to the rule against disclosure of confidential information. The Court added that it could not justify the Council providing access to the relevant documents, given that there was no limitation on how they might be used by Mr Dowen. However, the Court also pointed out that the protection of confidential documents was to be balanced against public interest factors of transparency and freedom of information. If, in any particular case, those factors outweighed the protection of confidential information, then such documents would no longer enjoy that protection. The Court suggested this would be unlikely where disclosure would be potentially anti-competitive and therefore damaging to both public authorities and the public generally.

Implications of the decision

  • There has been limited awareness, until now, that the 1998 Act can be used as another means of gaining access to information held by local authorities. This might suggest that the Veolia decision will lead to an increase in such information requests. However, the judgment indicates that the public interest test under the 1998 Act is similar to that which is used in determining FOIA/EIR requests. So, the 1998 Act may not provide a solution where a FOIA/EIR request has failed.
  • The government has recently published details of a new transparency policy which is designed to facilitate public access to contracts held by authorities. It is early days but this policy may remove some of the current uncertainty relating to whether or not and when confidential information is protected from disclosure.