The Information Commissioner (the “Commissioner“) has again rejected an attempt to rely on the commercial prejudice exemption, highlighting the risks which private companies should consider when engaging with the public sector as a result of the Freedom of Information Act (“FOIA“). It also demonstrates the need for private companies to liaise closely with public authorities when a FOIA request has been made to prevent disclosure by providing a cogent explanation (and associated evidence) that disclosure will be to their commercial detriment.
The Commissioner’s decision involved a request for a list (the “List”) of the organisations (the “Placement Providers”) that provide unpaid work placements for the unemployed under the Mandatory Work Activity (“MWA”) programme which had been refused by the Department for Work and Pensions (“DWP”).
The DWP had refused on the grounds of two exemptions under the FOIA for commercial prejudice and effective conduct of public affairs, both of which were rejected by the Commissioner who ordered disclosure of the List.
In respect of the commercial prejudice exemption, the DWP argued that publication of the List would cause damage to the reputations of the Placement Providers prejudicing their commercial interests because they would become targets for the public campaigns being run against the MWA programme. The DWP also argued that as such damage would cause the Placement Providers to withdraw from the MWA programme, it would inhibit the ability of the DWP to obtain the best services possible to help people out of unemployment, thus prejudicing the commercial interest of the DWP itself.
The Commissioner determined that the exemption was not engaged on the basis that the DWP had failed to provide evidence that demonstrated a clear link between disclosure and the alleged prejudice. Identifying a hypothetical or speculative possibility was not sufficient for the purposes of the exemption. In particular the Commissioner pointed out that:
- the extent to which campaigns against the MWA programme have influenced withdrawal of Placement Providers in the Past is unclear as there are a number of alternative explanations for withdrawals (the economic downturn, pressure from trade unions etc.);
- part of the DWP’s evidence, which largely consisted of press reportage and campaigners’ websites, was disregarded because it did not relate to circumstances at the time of the request; and
- the DWP had failed to obtain confirmation from the Placement Providers themselves as to the alleged commercial prejudice.
In respect of the “effective conduct of public affairs exemption (which pursuant to s. 36(2)(c) FOIA, can apply to information where “in the reasonable opinion of a qualified person, disclosure of the information…would prejudice, or would be likely to prejudice, the effective conduct of public affairs”, the DWP sought to rely on an opinion given by the Minister for Employment (Chris Grayling MP) to the effect that disclosure of the List would thwart the delivery of the MWA programme. Although in considering the application of the commercial prejudice exemption (as above) the Commissioner had found that there was no evidence that disclosure of the List would have such an effect, the Commissioner conceded that the Minister for Employment’s opinion was nevertheless a reasonable one to hold, and that the exemption was thus engaged.
However, for the exemption to apply the public interest test would need to be satisfied. On the basis of the above arguments, the Commissioner determined that there was little weight to the case that there would be harm to the public from disclosure of the List and found that the public interest balance favoured disclosure. This was on the basis of a number of arguments, including that disclosure was necessary to:
- inform the public debate on methods of reducing unemployment at a time of historically high unemployment rates;
- provide accountability for the substantial government funding of the MWA programme; and
- encourage integrity and quality in the arrangement of placements by the Placement Providers.
The Commissioner’s decision is very much in step with the general trend of FOIA cases favouring disclosure of commercial information, particularly where a public interest test is applied. But the decision is also interesting because of the unwillingness of the Commissioner to accept the DWP’s position in the absence of evidence from the allegedly affected third parties. The Commissioner’s process is not judicial and there is no statutory obligation on public authorities to consult those persons whose commercial interests are, or are likely to be, prejudiced by disclosure (although the Code of Practice issued by the Lord Chancellor under section 45 FOIA makes it clear that such consultation is “highly recommended”, and ICO guidance contains a similar recommendation). In addition, the requirement of evidence is not necessarily a condition the Commissioner places on other exemptions; for example, there does not seem to be a requirement that public authorities claiming the international relations exemption are required to obtain evidence from the state to which the information relates (even before the Tribunal).
It is not clear whether the Commissioner requested that the DWP obtain the evidence and it failed to do so, or whether the DWP did not appreciate the need to provide the evidence. However, it is clear that, in cases where a public authority is seeking to avoid making a disclosure under FOIA, active participation at an early stage by private companies whose information is at risk of disclosure can be vital in establishing the case that an exemption applies.