Did you know that the Freedom of Information Act could apply to your PFI contracts, and that all the obvious reasons why it might be a bad idea to disclose such information may be without force?

Edinburgh Royal Infirmary PFI has not been without publicity since it opened its doors in 2002. Now it has hit the headlines again after a member of the public made an application under the Freedom of Information Scotland Act 2002 that the PFI contract be released, against the wishes of the Lothian NHS Board.

The freedom of information acts in Scotland and England, in general terms, allow the public access to recorded information held by or on behalf of public authorities.

There are exemptions if disclosure would result in an actionable breach of confidence (the confidentiality exemption) or if it would prejudice a party’s commercial interests. Nobody really knew how these exemptions would operate in practice. The advice was that commercially sensitive or confidential information submitted to a public authority should be marked as such and ideally contained in separate schedules so that it could be separated from the remainder of the document if that were to be publicly disclosed.

In the Edinburgh Royal Infirmary case, the board argued that the whole contract fell within the confidentiality exemption, as the information had been obtained from a third party and to release it would constitute an actionable breach of confidence. The board also argued that parts of the contract contained personal information and that, in any event, the cost of providing the information would exceed the limit set by the act.

The Scottish Information Commissioner who determined whether information should be handed over was not impressed by the board simply passing on the project company’s objections without forming its own view. He considered that no substantive reasons had been given to support the confidentiality exemption.

The decision itself provides little useful guidance on when the confidentiality exemption might apply but it does follow a trend of limiting the application of these type of exemptions.

For example the Information Tribunal in the Derry council/Ryanair case considered whether information within a contract between two parties, one of which is a public authority, might be classed as having been provided by a third party for the purposes of the confidentiality exemption. It decided not. The tribunal stated “we think that this imposes too great a strain on the language of the act”. So the information was disclosed.

The commissioner was not impressed by the board simply passing on the project company’s objections without forming its own view

Another exemption which was put forward but not pursued by the health board, was the commercial interest exemption.

This may be applied where disclosure of the information (for examply the projected internal rate of return) would prejudice the authority’s or contractor’s ability to ensure best value for the public in any future projects, or could disadvantage the contractor in future competitive situations.

The timing of any request may also be relevant to the application of the exemptions. Disclosure is more likely to be refused if the request is made at the time that parties are in negotiations or in a bidding situation and release would prejudice the parties’ commercial interests.

Again, the Ryanair case is useful. At the time of the request for the contract between Ryanair and the council, the airport was well established. This was a big factor in the decision to order release of the contract.

Hot on the heels of the Edinburgh Royal Infirmary decision, on 25 October, the Ministry of Justice published a consultation into the possibility of extending the coverage of the Freedom of Information Act to private bodies that carry out public services.

On the same day that the Scottish Information Commissioner called for the government to protect freedom of information rights in such circumstances. The outcome will almost certainly not diminish the rights of disclosure and may well extend them. Those involved in public sector contracts need to be aware.