Should local authorities be bracing themselves for an influx of demands for information after the recent case between Nottinghamshire CC and Veolia? Not necessarily, but councils need to be aware of this important legal development in information law, says Lynsey Brown.
A recent case relating to a waste services contract highlighted another method for members of the public to access confidential and commercially sensitive information which would normally be exempt from disclosure under the Freedom of Information Act 2000 (“FOI”), by using the Audit Commission Act 1998 (the “1998 Act”).Under Section 15(1) of the 1998 Act “persons interested” can inspect and make copies of local authorities’ accounts to be audited and all books, deeds, contracts, bills, vouchers and receipts relating to them.
In October 2009, the case of Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council  EWHC 2382 held that the in relation to the 1998 Act considerations of commercial sensitivity and confidentiality were not relevant.
At the end of last year, however, the Court of Appeal in Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council and others  EWCA, threw a lifeline to those who contract with the public sector by introducing a public interest test. Consequently, an authority would be required to show that the public interest in disclosure outweighs the private interest in protecting such information.
This brings the situation into a similar position as FOI where the exemption for confidential information and commercial sensitivity are subject to a public interest test: whether the public interest in maintaining the exemption is outweighed by the public interest in disclosure. It should be noted, however, that the balance in FOI is between public interests, whereas under the Veolia judgement, the exercise is in balancing private interests against the public interest. This means it may not be difficult to prove that a private interest in withholding project documents is outweighed by the public interest in knowing how public money is spent.
Although the 1998 Act does not apply in Scotland, there is a similar right to inspect contained in s.101 of the Local Government (Scotland) Act 1973. It is therefore likely that if the matter arose in Scotland, a Scottish court, persuaded by the Veolia decision, would adopt this position.
The expected effects of the Veolia decision should be set in the context of the parameters within which information may be obtained. The combination of the public interest test and stringent procedural rules contained in the Accounts and Audit Regulations 2003 and, in Scotland, the Local Authority Accounts (Scotland) Regulations 1985 may mean that the amount of requests which will be accommodated will be relatively small.
Nonetheless, the opportunity remains for the public to access commercially sensitive information which could be extremely harmful for private companies as does the possibility of local authorities breaching confidentiality obligations by improper application of the legislative provisions.
On paper, it would appear that the Veolia decision does give rise to a right wider than FOI. Exercising that right may, however, be difficult and may mean that in practice Veolia does not mark the watershed in accessing public information that it might otherwise have been.
Lynsey Brown is a solicitor at UK corporate and commercial law firm Dundas & Wilson