Latest updates - last updated 21 August 2023
21 August 2023 - We have added the Keeping internal consultations on FOI requests timely and transparent resource to the Further reading section.
About this detailed guidance
This guidance discusses regulation 12(5)(e) of the EIR in detail and is written for use by public authorities. Read it if you have questions not answered in The Guide to the Environmental Information Regulations or if you need a deeper understanding to help you apply regulation 12(5)(e) in practice.
- What does the EIR say?
- What are the general principles of the exception?
- How do we determine if the information is commercial or industrial in nature?
- How do we establish if confidentiality is provided by law?
- How do we consider if the confidentiality is protecting a legitimate economic interest?
- How do we establish if the confidentiality is adversely affected by disclosure?
- How do we apply the public interest test?
- What should we consider if the information is a trade secret?
- Practical points
Regulation 12(5)(e) states a public authority may refuse to disclose information to the extent that its disclosure would adversely affect the confidentiality of commercial or industrial information where such confidentiality is provided by law to protect a legitimate economic interest.
All EIR exceptions are subject to the public interest test set out in regulation 12(1)(b). A public authority can only withhold information if the public interest in maintaining the exception outweighs the public interest in disclosing the information.
Regulation 12(2) specifically states that a public authority shall apply a presumption in favour of disclosure.
Regulation 12(9) provides that the exception is not available for information on emissions.
The purpose of the exception is to protect any legitimate economic interests underlying commercial confidentiality.
The exception can be broken down into a four-stage test. All four elements are required in order for the exception to be engaged:
- The information is commercial or industrial in nature.
- Confidentiality is provided by law.
- The confidentiality is protecting a legitimate economic interest.
- The confidentiality would be adversely affected by disclosure.
This was adopted by the Tribunal in Bristol City Council v Information Commissioner and Portland and Brunswick Squares Association (EA/2010/0012, 24 May 2010).
There is no direct equivalent in the Freedom of Information Act 2000 (FOIA). It incorporates elements of both section 41 (information provided in confidence) and section 43 (commercial interests) of FOIA. But it differs in some key respects and you should take care before applying the same arguments. In particular, it is not enough simply to argue that disclosure would adversely affect your commercial interests or those of a third party. You must also demonstrate that there is confidentiality provided by law, which may turn on some of the same factors relevant to section 41 but it is not an identical test.
If the information attracts specific intellectual property rights, you should consider the intellectual property exception in regulation 12(5)(c). It is likely to be more appropriate and you should consider that first.
The exception does not allow you to neither confirm nor deny (NCND) whether you hold relevant information. Under the EIR, you can only refuse to confirm or deny whether you hold information if to do so would:
- adversely affect the interests in regulation 12(5)(a) (international relations, defence, national security of public safety); and
- not be in the public interest.
The EIR differ in this respect from FOIA, where most exemptions include NCND provisions.
For information to be commercial in nature, it needs to relate to a commercial activity, either yours or a third party. The essence of commerce is trade. A commercial activity generally involves the sale or purchase of goods or services, usually for profit. Not all financial information is necessarily commercial information. In particular, information about your revenue or resources is not generally commercial information, unless the particular income stream comes from a charge for goods or services. Examples include:
- Planning: information about development plans for land.
- Private Finance Initiative (PFI) or public/ private partnerships (PPP): information about a private business partner involved in the financing or delivery of public projects and services.
- Procurement: information about the purchase of goods or services from private contractors, including information submitted during the tendering process by bidders, information about the resulting contract, and information about your own purchasing position.
- Customer information: information about your customer base if the you charge for offering a particular service.
- Regulatory information: information obtained about private businesses in order to perform your regulatory functions, eg issuing licences or investigating breaches of regulations.
“Industrial” is generally understood to describe the processing of raw materials and the manufacture of goods in factories, as opposed to their sale or purchase. Examples include:
- information about methods of manufacture;
- raw ingredients or precise recipes; and
- the formula used for making a product.
It includes confidentiality imposed on any person by the common law of confidence, contractual obligation, or statute.
In contrast to section 41 of FOIA, there is no need for you to have obtained the information from another.
This was confirmed by Judge Lloyd-Davies in the Upper Tribunal hearing of Chichester District Council v IC and Friel (2012 UKUT 491 AAC) and by Judge Williams in the Upper Tribunal hearing of Natural Resources Wales and SI Green (UK) Ltd v Information Commissioner and Friends of the Earth Swansea (2013 UKUT 0473 AAC). Judge Lloyd-Davies resisted the analogy to section 41 and said the requirement to obtain information from another is not present in any form in regulation 12. Judge Williams agreed and said
“…the tests in section 41 and regulation 12 are separate and cannot be read to include in one something in the other simply because they deal with similar issues.”
It covers information obtained from a third party, information jointly created or agreed with a third party.
It also covers information that you create. For purely internal information, you need to decide whether employees are under an obligation of confidence imposed by the common law, contract, or statute.
The exception protects confidentiality owed to you by a third party, as well as confidentiality you owe a third party. This was explicitly confirmed in by the tribunal in South Gloucestershire Council v Information Commissioner and Bovis Homes (EA/2009/0032, 20 October 2009).
Common law of confidence
There are two key issues you need to consider:
- Does the information have the necessary quality of confidence? If the information is not trivial nor in the public domain, it has the necessary quality of confidence. If you have shared the information with a limited number of people then it may still keep its quality of confidence, as long as you have not disseminated it to the general public. Even if it is all in the public domain, it is still possible for information to keep its quality of confidence, if it would take time and effort to find and collate it from multiple sources.
- Was the information shared (or provided to employees) in circumstances creating an obligation of confidence? This can be explicit or implied, and may depend on:
- the nature of the information itself;
- the relationship between the parties; and
- any previous or standard practice regarding the status of information.
- A useful test is to consider whether a reasonable person in the place of the recipient would have considered that the information has been provided to them in confidence.
In Bristol City Council v Information Commissioner and Portland and Brunswick Squares Association (EA/2010/0012, 24 May 2010), the Tribunal accepted evidence that it was “usual practice” for all documents containing costings to be provided to a planning authority on a confidential basis. Even though planning guidance meant that the developer was actually obliged to provide the information in this case as part of the public planning process.
The Tribunal applied the “reasonable person” test: “in view of our findings … that at the relevant time the usual practice of the council was that viability reports and cost estimates like those in question were accepted in confidence (apparently without regard to the particular purpose for which they were being provided) … the developer did have reasonable grounds for providing the information to the Council in confidence and that any reasonable man standing in the shoes of the Council would have realized that that was what the developer was doing.”
In Darlington Borough Council and Information Commissioner (EA/2018/0005), the tribunal considered a request for a deed of amendment (DoA, dated 2016) to a subscription and shareholder agreement (SSA, dated 2003) between DVTA Limited (part of the Peel Airports) and six local authorities for keeping DVTA Limited open to KLM and Eastern Airways for five years. It stated:
“We find that the information is subject to confidentiality provided by law, as it has the necessary quality of confidence and was shared in circumstances creating an obligation of confidence. Having viewed the withheld information, we are satisfied that it is not trivial information, and it had not been shared more widely or put into the public domain. We also accept that the parties have a genuine interest in the contents remaining confidential, as the DoA sets out details of a commercial arrangement between shareholders which could be damaged if the information were to be made public. The related SSA contains express restrictions on disclosure of information, which shows that the parties to this agreement implemented a contractual duty of confidence and so regarded the SSA and information relating to it as confidential. Although the DoA does not contain an express confidentiality clause, it is closely related to and amends the SSA, and so would also be regarded as confidential by the parties.”
You may explicitly accept information in confidence but also refer to the fact that you might still have to disclose it under the EIR (ie if the other elements of the exception or the public interest test are not met). This type of warning does not undermine the fact that there is still an explicit obligation of confidence for these purposes.
In contrast to section 41 of FOIA, there is no need to consider whether there would be an unauthorised disclosure to the detriment of the confider. This is because there is no need to establish an actionable breach of confidence for the purposes of this exception. It is sufficient that there is a theoretical duty of confidence provided by law. However, the element of detriment still needs to be considered in the third stage of the test, which is discussed below.
There is also no need to consider whether there would be a public interest defence to any breach of confidence (unlike section 41 of the FOIA). Again, this is because there is no need to establish an actionable breach. It would be unnecessary duplication, as the exception is subject to the public interest test, when you will fully consider it before reaching any decision on disclosure.
Contractual obligations of confidence
We recognise that confidentiality clauses may be appropriate, if they help to identify information that would genuinely cause damage to the contractor’s interests if released. If you can establish that there is a binding confidentiality clause covering the requested information, you may argue that confidentiality is provided by law for the purposes of this exception.
You should still ensure that the information has the necessary quality of confidence, as you would do if you are considering a common law duty of confidence. If there is no quality of confidence, the exception will not apply in any event as it will not be possible to satisfy the other elements of the exception.
If in exceptional circumstances it is appropriate to agree to a confidentiality clause, you should ensure that there is good reason for doing so and that contractors understand that disclosure might still be necessary under the EIR. You might want to consider explaining the effect of the EIR in tendering documentation so it is clear from the outset. Giving this type of warning that you may override confidentiality in some cases, does not undermine the fact that confidentiality is still provided by law. Therefore, it does not affect your ability to use the exception.
However, a binding confidentiality clause does not allow you or any other public authority to contract out of your or their obligations under the EIR by inserting or accepting broadly drafted confidentiality clauses. Confidentiality is just one element and it is not enough on its own to justify withholding information. You still need to demonstrate that:
- the information is commercial or industrial in nature;
- the confidentiality is protecting a legitimate economic interest; and
- the public interest in maintaining the confidentiality in the particular circumstances of the case outweigh the public interest in disclosure.
Signing clauses that provide a false sense of security will only damage relationships if you are obliged to disclose information under the EIR at a later date. If the information is not inherently sensitive, a confidentiality clause will not protect it from disclosure under the EIR.
If the confidentiality is self-imposed by contract, this may affect the weight you give to maintaining the exception when conducting the public interest test. See ‘How do we apply the public interest test?’ section below.
Statutory bars on disclosure
Regulation 5(6) disapplies any statutory bars on disclosure for environmental information. This means that a statutory bar is not in itself a justification for withholding information under the EIR.
However, a statutory bar does mean that confidentiality is provided by law for the purposes of this exception. You may therefore be able to refuse the information under 12(5)(e), but only if you can satisfy the other elements of four-stage test, and the public interest test.
You should also be aware of the Public Sector Contract Regulations 2015 (PCR). As explained in the ICO’s guidance on Outsourcing and freedom of information, the PCR do not create a statutory prohibition on disclosure. Nevertheless, the fact that a contractor has identified information which they consider to be confidential could be of relevance to your consideration of exemptions.
The confidentiality must be “provided… to protect a legitimate economic interest”. The Tribunal confirmed in Elmbridge Borough Council v Information Commissioner and Gladedale Group Ltd (EA/2010/0106, 4 January 2011) that, to satisfy this element of the test, disclosure of the confidential information would have to adversely affect a legitimate economic interest of the person the confidentiality is designed to protect.
Disclosure would cause harm
You need to consider the sensitivity of the information at the date of the request and the nature of harm that would be caused by disclosure. The timing of the request and whether the commercial information is still current are likely to be key factors. Broader arguments that the confidentiality provision was originally intended to protect legitimate economic interests at the time it was imposed will not be sufficient if disclosure would not actually impact on those interests at the time of the request.
It is not enough that disclosure might cause some harm to an economic interest. You need to establish that disclosure would cause harm (on the balance of probabilities – ie more probable than not).
In London Borough of Sutton v Information Commissioner (EA/2017/0064), the tribunal stated that ‘would adversely affect’:
“should be interpreted in the sense that the adverse effect has to be identified and the Tribunal must be satisfied that disclosure “would” have that adverse effect, not that it “could” or “might”. (See Mersey Tunnel Users v ICO and Halton Borough Council EA/2009/0001).”
This approach is supported by European Directive 2003/4/EC on public access to environmental information. The EIR are intended to implement the provisions of the Directive. Article 4 paragraph 2 of the Directive sets out a duty to interpret exceptions in a restrictive way. Taking into account this duty, the wording “where such confidentiality is provided by law to protect a legitimate economic interest” (as opposed to “where such confidentiality was provided…”) indicates that the confidentiality of this information must be objectively required at the time of the request.
In addition, the implementation guide for the Aarhus Convention (on which the European Directive and ultimately the EIR were based) gives the following guidance on legitimate economic interests:
“Determine harm. Legitimate economic interest also implies that the exception may be invoked only if disclosure would significantly damage the interest in question and assist its competitors.” (emphasis added)
This interpretation is also more consistent with the general scheme of the EIR 12(5) exceptions, which require that “disclosure would adversely affect” the relevant interests identified in each exception (emphasis added). Unlike FOIA, there is no lesser test of “would be likely to adversely affect”.
In Elmbridge Borough Council v Information Commissioner and Gladedale Group Ltd (EA/2010/0106, 4 January 2011), the request was for a viability report for a new development submitted as part of the planning application. The council and the developer asserted that disclosure could harm the developer’s interests, but did not accept that they needed to demonstrate that harm would result. The Tribunal found that the exception was not engaged, saying that “statements by interested parties that harm might or could be caused are insufficient […] The use of words such as ‘could’ or ‘may’ do not in our view provide evidence of harm or prejudice to the required standard of proof”.
In the Upper Tribunal case of Ryan v The Information Commissioner  UKUT 54 (AAC) the request concerned land that was acquired by Tesco for a proposed development, negotiations between the local authority and Tesco and the advice the authority received from its agent. All the information was disclosed apart from one passage, which the Commissioner decided was except from disclosure under regulation 12(5)(e). On appeal the Tribunal confirmed the Commissioner’s decision save for one sentence that it ordered to be disclosed. In short, the information that was withheld related to the tactics that the local authority should apply in negotiations with Tesco. The UT considered the tribunal’s reasoning for maintaining the exception was flawed. It said “I have read it and it seems to me to contain nothing unique or unusual. It is the sort of advice that a local authority would generally be given in the circumstances. As anyone involved in selling or acquiring land for large scale development would surely have their own advisers, it is also the sort of advice that would be anticipated by the other side. If that is right, making it public would not hamper a local authority in the ways identified by the tribunal.”
Legitimate economic interests
- retaining or improving market position;
- ensuring competitors do not gain access to commercial valuable information;
- protecting a commercial bargaining position in the context of existing or future negotiations;
- avoiding commercially significant reputation damage; and
- avoiding disclosures which would otherwise result in a loss of revenue or income.
Some of the arguments may be similar to those made under section 43 of FOIA. However, economic interests are wider than commercial interests, and can also include financial interests. For example, arguments that disclosure would adversely affect your finances or tax revenue may be relevant to this element of the exception, even if we would not accept that this constituted a commercial interest.
However, you should remember that the information itself must still be commercial or industrial in nature, even if the interests at stake are not commercial interests.
It does not include:
- personal privacy concerns; or
- illegitimate economic interests (eg the proceeds of illegal activity or market position achieved by anti-competitive practices, such as price fixing or a cartel).
In Darlington Borough Council and Information Commissioner (EA/2018/0005), the tribunal was satisfied that legitimate economic interests would be adversely affected by disclosure. It stated:
“Based on the evidence and submissions from the appellant, we are satisfied that various legitimate economic interests may be affected by disclosure of the withheld information. We accept that the release of information about commercial viability tests which affect the future operation of DTVA could damage public perceptions about the viability of the airport. This may limit future bookings and so affect the ability of DTVA to attract new airlines and investors. As explained by Peel, this could also cause a loss of confidence from partner airlines, as well as tenants and other users – and this could happen in circumstances where the parties to the agreement wish to continue operating DTVA. These consequences would damage the legitimate interests of both the appellant and Peel in keeping DTVA operating successfully. We also accept that this information could advantage competitor regional airports and enable them to act in ways to damage DTVA’s commercial standing. In addition, at the time of the request, various conditions precedent had not been fulfilled, and so disclosure at that point would undermine commercial confidentially and destabilise the agreement between the parties.”
For purely internal information, it is your interests that are relevant here.
If the information was provided by one party to another under the common law of confidence, it is the interests of the confider (the person providing the information) that are relevant.
If the information was originally provided by party A to party B, and then provided by party B to you under the common law of confidence, it is plausible that disclosure would also affect A’s interests. However, only B’s interests as the confider are relevant to the exception, unless you can establish that A also provided the information to either B or to you in confidence (ie that a separate duty of confidence exists to protect A’s interests).
If the information was jointly agreed or was provided under a contractual obligation of confidence or is protected by a statutory bar, either party’s interests could be relevant, depending on whose interests the confidentiality is designed to protect.
In South Gloucestershire Council v Information Commissioner and Bovis Homes (EA/2009/0032, 20 October 2009), the request was for appraisal reports on potential development sites. The reports had been written by a third party and provided to the council under a contractual obligation of confidence. However, the confidentiality clause was actually designed to protect the council’s interests (its bargaining position in planning negotiations with developers) rather than the confider’s interests. The Tribunal accepted that the confidentiality was to protect the council’s legitimate economic interests.
If a third party’s interests are at stake you need to consult with them, unless you have prior knowledge of their views. It is not sufficient for you to speculate about potential harm to a third party’s interests without some evidence that the arguments genuinely reflect the concerns of a third party. This principle was established by the tribunal in Derry City Council v Information Commissioner (EA/2006/0014, 11 December 2006). That case considered commercial interests under section 43 of the FOIA, but it is equally applicable to third party interests under regulation 12(5)(e).
If information is accepted in confidence, it is helpful if you understand from the outset why the contractor considers information to be commercially sensitive, and how long it is likely to remain sensitive. However, you may still need to consult to obtain appropriate arguments and evidence at the time of a request. This is especially the case if circumstances have changed or market conditions have moved on, so that information might be less sensitive than when it was originally provided.
As paragraph 44 of the EIR code of practice makes clear, consultation with a third party is no excuse for delay. Therefore, you must still respond to the request within 20 working days.
Although you should consider the views of the third party, it is still your responsibility to decide whether or not the exception applies. You can only withhold information if you are satisfied that the third party’s arguments for withholding the information are justified.
If the information you are considering for disclosure relates to a large number of third parties, it may be appropriate to contact a representative organisation, or a sample of organisations who can express views.
There may occasionally be situations where it is genuinely not possible to obtain the views of a third party. For example, the time constraints for responding to a request may, for particular reasons, make consultation impossible. In these specific circumstances, you may present arguments about the commercial interests of the third party, but they must be based on your prior knowledge of the third party’s concerns. You need to provide evidence that your arguments genuinely reflect the concerns of that third party.
Where consultation with a third party establishes that it does not have any concerns about disclosure and its commercial interests, you should not present speculative arguments on behalf of that third party or otherwise seek to apply this exception.
Although this is a necessary element of the exception, once the first three elements are established, we consider it is inevitable that this element will be satisfied. Disclosure of truly confidential information into the public domain would inevitably harm the confidential nature of that information, and would also harm the legitimate economic interests that you have already identified.
This was confirmed in Bristol City Council v Information Commissioner and Portland and Brunswick Squares Association (EA/2010/0012, 24 May 2010). The Tribunal stated at paragraph 14 that, given its findings that the information was subject to confidentiality provided by law and that the confidentiality was provided to protect a legitimate economic interest:
“it must follow that disclosure… would adversely affect confidentiality provided by law to protect a legitimate economic interest”.
This point was also made in Darlington Borough Council and Information Commissioner (EA/2018/0005). The tribunal stated:
“In light of the above findings on confidentiality and protection of legitimate economic interests, including the potential harm that would occur if confidentiality was not protected, we find that confidentiality would be adversely affected by disclosure.”
You should consider both the specific harm that disclosure would cause to the relevant economic interest at stake, and whether there is any wider public interest in preserving the principle of confidentiality. However, the initial focus should be on the harm to legitimate economic interests.
If more than one EIR exception applies to the information, it is possible for you to aggregate the public interest factors relevant to each exception when considering the public interest test.
These factors must be balanced against the public interest in disclosure. You are reminded that regulation 12(2) specifically provides that you apply a presumption in favour of disclosure. This means that there will be occasions when you should disclose information even though it is confidential and disclosure would harm someone’s legitimate economic interests.
Harm to legitimate economic interests
Only harm to the economic interests you have already identified to engage the exception are relevant here. This is because the exception only protects confidentiality as far as necessary to protect those interests. You should not take any other arguments into account (eg relating to personal privacy or the interests of another party).
The weight given to this factor depends on the extent, severity and frequency of the harm in a particular case.
Preserving the principle of confidentiality
There is always some inherent public interest in maintaining commercial confidences. Third parties would be discouraged from confiding in you if they did not have some assurances that confidences would be respected.
However, we do not consider that a generic argument about inherent public interest carries significant weight.
Arguments about undermining confidentiality and the relationship of trust have more weight when they relate to the specific circumstances of the case and identify how that particular relationship serves the public interest. If you can demonstrate that this disclosure would undermine your relationship with a particular party, or affect your ability to do similar business with others in future, and that those relationships serve the public interest, then this will carry more weight that an assertion that breaching confidentiality will have a harmful effect on trust generally.
However, the weight of this argument again depends on the actual harm that the disclosure would cause to the third party. If the harm caused would be limited, it is more difficult to argue that this would seriously undermine your future relationships.
It may also depend on whether there are other methods of obtaining the information. If you can easily compel the disclosure of similar information in the future, or it is in the third party’s interests to continue to provide the information, there will be less public interest in preserving the principle of confidentiality.
In Bristol City Council v Information Commissioner and Portland and Brunswick Squares Association (EA/2010/0012, 24 May 2010), the Tribunal dismissed general arguments that disclosure of a viability report in relation to a planning application would affect the supply of viability reports from other developers in future. The Tribunal countered that the passage of the EIR meant that there could never be a blanket guarantee of confidentiality; that future developers in similar circumstances would be obliged to supply the reports if they wanted to obtain consent; and that in other circumstances (where there was no such obligation) different considerations may apply and developers should appreciate that this case would not set an automatic precedent.
In Mr Jeremy Clynne and Information Commissioner and London Borough of Lambeth (EA/2016/0012), the tribunal considered a request for a financial viability assessment relating to the redevelopment of a site in Streatham, known locally as the Megabowl site. It stated:
“We consider that the public interest favouring withholding the information is that it constitutes the developer’s confidential information revealing how the developer has priced the scheme for the purpose of the viability assessment. We consider this public interest to be significant because of the importance of respecting confidential information. However, on the facts of this case, it is vastly outweighed by the interests in disclosure set out above.”
“We note the argument that greater requirements of openness would result in developers making reports more generic and less useful. Our task is to consider the application of the EIR on the information request in this appeal. We do not think disclosing this request would have resulted in developers providing information of less use to the Council, because the Council is required to satisfy itself that a greater level of affordable housing would not be possible, and the developer would need to provide sufficient information for it to do so."
However, this argument still may carry weight if it would take additional time and resources to compel the disclosure of information. This is especially the case if ensuring the free flow of information is important for your functions.
The weight of this wider public interest in respecting confidentiality may also be affected by the nature of the obligation of confidence. For example, if a duty of confidence has been voluntarily self-imposed on you by contract, this is likely to carry less weight than an obligation of confidence imposed by statute. Paragraphs 46 to 53 of the code of practice issued under the EIR make clear that you cannot contract out of your obligations under the EIR and should not accept information in confidence unless it is necessary to do so.
In terms of respect for confidentiality, for you, this itself is likely to carry little or no inherent weight. It may be important to preserve trust in your ability to keep third party information confidential. However, you should expect that information you create may need to be disclosed under the EIR, even if you would prefer to keep it confidential. In such cases the public interest arguments should be focussed on the specific harm to legitimate economic interests, rather than on respect for confidentiality in principle.
Public interest in disclosure
There is always some public interest in disclosure to promote:
- transparency and accountability;
- greater public awareness and understanding of environmental matters;
- a free exchange of views; and
- more effective participation in environmental decision making.
All ultimately contribute to a better environment.
This exception often arises in relation to planning matters. We consider that the particular public interest in public participation in planning matters is likely to carry a significant weight in favour of disclosure in such cases.
In Mr Jeremy Clynne and Information Commissioner and London Borough of Lambeth (EA/2016/0012), the Tribunal said:
“There is much importance in transparency of viability assessments and reviews in allowing the public to interrogate the reasons a developer is unable to fulfil the core policy strategy on 40% affordable housing (subject to viability). The EIR objective is to allow the affected community to have relevant information in time to participate effectively in environmental decision-making, which would include before the planning permission was finalised. The Appellant claims interest in seeing that viability reports are fit for purpose, and we have some sympathy with this where according to Mr Lee’s testimony they are assessed at a fixed point in time and may rapidly become obsolete and where as in this case there is no mechanism for review once the development has started.”
In Shepway District Council and Information Commissioner (EA/2017/0240), the tribunal considered a request for the full viability assessment undertaken for a site known as Biggins Wood in Kent. In 2014 the council granted planning permission to support redevelopment for mixed used. The land was contaminated and required costly remedial work. In 2016 the council was offered purchase of the site. It proceeded to purchase the land for £1.5m; circa £300,000 above its own advisor’s estimated value of the land. The Commissioner upheld the application of 12(5)(e) and considered the public interest rested in maintaining the exception. The tribunal agreed that 12(5)(e) was engaged but reached a different view on the balance of the public interest. It stated:
“…on the facts of this case, there is an overriding public interest in the disclosure of the disputed information to ensure public participation in environmental decision-making. This is heightened by considerations of VFM [value for money] where legitimate questions are raised in respect of significant costs spent by a public authority that clearly has limited means. The interest is additionally weighty given the nature and history of the land in question, which has been contaminated and neglected.”
There are other factors in favour of disclosure, depending on the particular circumstances of the case. For example:
- accountability for spending public money;
- the number of people affected by a proposal;
- any reasonable suspicion of wrongdoing; or
- any potential conflict is interest.
In Bristol City Council v Information Commissioner and Portland and Brunswick Squares Association (EA/2010/0012, 24 May 2010), the Tribunal considered that the fact that the council itself owned the site to be developed “gave rise to a need for ‘particular scrupulousness’ on the part of the Council” and added substantial weight in favour of disclosure.
In London Borough of Sutton v Information and the Information Commissioner (EA/2017/0064) the Tribunal considered a request relating to a sustainable energy supplier company, set up by the council in 2016, to provide low carbon energy to homes and businesses in the area. The company had a contract with Viridor under which it purchased energy at an agreed price and then sold it on. At the time of the hearing, the company had contracts relating to the new Barratt Homes development in Sutton. Residents of the development were required by covenant to use the company as their energy supplier for 25 years. The tribunal disagreed with the Commissioner and decided that regulation 12(5)(e) was engaged but ruled that the public interest rested in favour of disclosure. It stated:
“We find that there is a very significant public interest in disclosure in this case. A very large sum of public money is being invested in a long-term scheme lasting more than 25 years. Local residents purchasing properties in the Barratt development enter into contracts for energy supplied from SDEN for 25 years. It is a matter of important local significance. It has been publicly stated by the Council that the scheme would help alleviate fuel poverty. There is therefore also some public interest in the public knowing whether or not fuel poverty is referred to in the financial model review.
If the scheme fails there are significant risks to public money. There is a strong public interest in the public having access to information on how the project is proposed to function and how, if at all, it is eventually intended to make a profit. There is a strong public interest in the public being properly informed and therefore being able to make a more informed decision in both challenging and supporting the proposed scheme.”
Taking account of The Trade Secrets (Enforcement, etc) Regulations 2018, the ICO considers a trade secret is a form of confidential commercial or industrial information given additional protection under the common law. In broad terms, it refers to information that:
- is unique and often technical in nature, which has taken some degree of skill or investment to produce;
- gives a competitive advantage to the person using it; and
- is treated as particularly confidential by its owner (eg restricted to a limited number of people within an organisation).
A classic trade secret might be unique information about processes or methodologies (eg secret formulae or recipes). However, the concept is wider than this and could also include such things as unique financial models or pricing structures, customer lists, or promotional strategies, as long as these are not generally known and confer a competitive advantage.
The Tribunal discussed the definition of a trade secret in the case of the Department for Work and Pensions v IC EA/2010/0073, (20 September 2010). It quoted from previous court and Tribunal decisions which had reviewed the nature of a trade secret.
The Tribunal noted that a trade secret was information, which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret. This assumed that the information was used in a trade or business and that the owner had either limited the dissemination of the information or at least not encouraged or permitted widespread publication.
The Tribunal also noted that the concept of a trade secret was one that related to a particular kind and quality of information. It considered ‘kind’ suggested “something technical, unique and achieved with a degree of difficulty and investment”. Regarding ‘quality’, the Tribunal indicated that the term ‘trade secret’ suggested the “highest level of secrecy”.
Trade secrets are not specifically mentioned in the exception. Whether information technically constitutes a trade secret is not therefore a determining factor in applying the exception, as long as you can establish each element of the four-stage test set out above is met. We do not therefore advise you to focus on the concept at any great length for the purposes of this exception.
Nonetheless, if it is clear that information does constitute a trade secret, the exception is engaged. This is because it is an inherent feature of a trade secret that:
- it is commercial or industrial information;
- it is confidential; and
- disclosure would cause significant harm to the trading position of the relevant party (and therefore their legitimate economic interests).
If the information is a trade secret, there is strong public interest in protecting it. This is because of the level of investment involved and the extent to which disclosure would undermine the relevant party’s competitive advantage. This principle was confirmed by the tribunal in Department for Work and Pensions v Information Commissioner (EA/2010/0073, 20 September 2010). Even so, this does not mean that there is an actual blanket exception for trade secrets. It is of course still necessary for you to consider the weight of public interest factors in favour of disclosure in the particular case.
We expect you to routinely provide certain information about contracts that have completed a tendering process. See our publication scheme guidance for more information.
You may wish to read our guidance on the following exceptions:
- regulation 12(5)(c) if the information attracts intellectual property rights;
- regulation 12(5)(d) if disclosure would adversely affect the confidentiality of formal proceedings of a public authority; or
- regulation 12(5)(f) if the information has been voluntarily provided by a third party who does not consent to disclosure and whose interests would be adversely affected.
If the information is not environmental information, you may wish to consider instead:
- section 43 of the FOIA (commercial interests); or
- section 41 of the FOIA (information obtained in confidence).
You may also wish to read the EIR code of practice.
Internal consultation resource - Keeping internal consultations on FOI requests timely and transparent