Parties are using the Freedom of Information Act to strengthen their positions, so be aware when working with a public body that it may have to disclose information you’d rather it didn’t
Information is power and money, and the Freedom of Information Act 2000 (FOIA) is now starting to be deployed by parties to construction contracts seeking information which might assist or enhance their arguments to time or money. Often we are seeing this being done in order to either get information from a more senior contracting party higher up the chain than the party they are in immediate contract with or as a way of seeking to apply negotiating pressure when settling an account.
Anyone can make a FOI request. A request is normally valid if it relates to information which already exists and does not have to be specially compiled for the purpose of meeting the request.
The FOIA only covers recorded information the public authority holds. Often in a construction project, the contractor (and therefore the subcontractors) is regarded as holding information on behalf of the public body. It may not matter in this context that the contractor is not a public body.
So in principle a public body can validly argue (in case of an information commissioner review) reasonable grounds for not possessing the information (for instance, that it is characteristically held by the subcontractor in such projects) and can issue a standard refusal notice on the grounds that it does not have the information requested. Care should be taken that the refusal notice complies with the requirements of FOIA, stating clearly the reasons for non-disclosure, the ability of the requester to use the internal review process and his ability to then appeal to the information commissioner free of charge. The refusal notice should be issued within 20 working days of the receipt of the original request. Accordingly the date of receipt of the request is an important factor.
A commercial third party (main contractor or subcontractor) can itself be regarded as a public authority on the basis that it is acting ‘on behalf of’ the public body
However, it may not be enough for a public body to simply say it doesn’t hold the information requested. It has a duty to advise and assist in such circumstances and it may offer the requester a schedule of information it does actually hold and is prepared to wholly or partially disclose which are related to the request. Alternatively the public body may seek to effectively pass the request back down the contractual chain to the party that has that information (a main contractor or major subcontractor, for instance). This may then raise issues of whether that private commercial organisation is covered by FOIA.
A commercial third party (main contractor or subcontractor) can itself be regarded as a public authority on the basis that it is acting “on behalf of” the public body. This then means that an FOIA request can be made directly to the contracting party, potentially with the public body directing the requester to do so under FOIA best practice.
The requester may argue under section 103(3)(b)(ii) of the Protection of Freedoms Act 2012 that the main or subcontractor is also subject to FOIA as it is acting on behalf of the public body. This possibility implies a relationship of agency between the parties which does not necessarily exist in an arm’s-length commercial service level agreement, such as a construction contract. This type of issue would need to be analysed in more detail looking at the precise nature of the legal relationship (particularly the contractual one) between the public body and private contractor.
If the contractor is indeed regarded as acting on behalf of the public body, then there are several exemptions the contractor can propose in order to wholly or partially withhold disclosure, including commercial sensitivity, litigation privilege and confidentiality. The merits of this defence will depend on an analysis of the records held which are reasonably considered to relate to the request.
Under section 41 of the FOIA, a public authority does not have to disclose confidential information if both of the following two conditions are satisfied:
- it received the information from someone else;
- complying with the request would be a breach of confidence that is actionable (that is to say, there are clear grounds under common law for a successful claim not arguable ones).
The law of confidence recognises that a breach of confidence may not be actionable when there is an overriding public interest in disclosure.
There is also an exemption for trade secrets (the section 43 exemption). The section 43 exemption covers two situations: when information constitutes a trade secret (such as the recipe for a branded product) and when complying with the request would prejudice or be likely to prejudice someone’s commercial interests (the so-called prejudice test).
The section 43 exemption is qualified. So even if the prejudice test is met, for example, if there is an overriding public interest in disclosure (bearing in mind the guiding principle under the act is to disclose information unless there is good reason not to), the section 43 exemption will not apply.
All of this is a minefield. On projects where there is a public body involved, it might be best to assume that information requests can and will be made and may well have to be complied with.
James Bessey is a partner in the construction, infrastructure and projects department at DWF