On 31 October, the First Tier Tribunal gave judgment which provides some guidance on how far 'confidential information' received during a competitive bidding process can be withheld under the Freedom of Information Act (FOIA).
In 2010 the London Borough of Newham began a competitive bid process under the structure of the Gambling Act 2005 for the operation of a casino at Westfield close to the Olympic Park. For the purposes of this blog it is important to note that:
- the procedure required a written agreement (the Schedule 9 Agreement) between any proposer and the Council setting out the benefits offered and the compensation proposed in the event that having been awarded the casino licence the development was delayed or the benefits failed to materialise; and
- in its paperwork for the tender process the Council made it clear that All information submitted to [the Council] at any time during Stage 2 including the form itself and associated documents will be treated as confidential....
Following the bidding process an unsuccessful bidder challenged the decision as unlawful and made an application amounting to a request under FOIA for further information about the contents of the bids and how they were considered. Among the information requested was the Schedule 9 Agreement. This was provided but had been substantially redacted so that for example information about the specific obligations which the guarantor would guarantee was deleted as was the whole of a Schedule which summarised the benefits proposed by the successful bidder. The justification for withholding the information was under section 43(2) of FOIA-prejudice to commercial interests.
In short having reviewed the documents in question the Tribunal agreed that the threshold for engaging section 43(2) had been passed in relation to all the categories of information. Accordingly the main question for the tribunal was the public interest balance between that confidentiality and appropriate disclosure.
The arguments urged on the Tribunal by the Council were that the avoidance of harm gave rise to a greater public interest than disclosure and that general disclosure of information would discourage bidders who would be concerned that confidential financial and commercial information would be placed in the public domain. It was noted that in this case it was a competitor who was seeking the information not a member of the public and that while the information may be specific to this particular project it would be possible to build up a body of information from it and other information which would disclose sensitive commercial information. For the Information Commissioner it was argued that there was already such a large amount of information in the public domain that the withheld information added very little but facilitated a better informed public debate on what was a controversial plan.
The Tribunal looked at each category of document confidentially. Importantly it held that in relation to the Schedule 9 Agreement the public interest was best served by full disclosure of the identity and creditworthiness of whoever stood behind the obligations. Moreover the Tribunal considered that a copy of the Schedule 9 Agreement with that information restored would also demonstrate the expected public benefits which the guarantor was not prepared to stand behind and the Council's acceptance of that limitation on the security obtained for the package of benefits offered. The Tribunal found that the public interest in bidders being able to prevent competitors from finding out about this part of the proposals was relatively slight and did not equal let alone outweigh the public interest in disclosure.
In other words information which a commercial bidder may regard as commercially sensitive might nevertheless be ordered to be disclosed under FOIA. The Tribunal did consider whether in the case of some of the information its disclosure might lead to an actionable breach of confidence leading to an exemption under section 41 of FOIA. The Tribunal did find that some of the withheld information was obtained in circumstances in which the confider might reasonably have assumed that it would be held in confidence. It said that there should be no time limit over which the obligation of confidence lasts but it was not correct that such an obligation should last forever. It found that the reasonable expectation of the confider would be that confidentiality would be maintained for a reasonable period of time after the date when the licence was awarded.
This is significant for other public sector tendering exercises for both contracting authorities and bidders because it demonstrates that even if information disclosed in the tender can be considered confidential (which is quite a high hurdle to cross) it will only be protected from disclosure by FOIA for a limited time.
It is worthwhile reading the whole decision which can be found here.