scotland - commercial interest and the economy

7/29/2019 Scotland - Commercial Interest and the Economy

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Executive Summary

This briefing provides guidance on the consideration and application of the exemptions under section33(Commercial interests and the economy) of the Freedom of Information (Scotland) Act 2002(FOISA), and the exceptions under regulations10(5)(e) and 10(5)(f) of the Environmental Information(Scotland) Regulations 2004 (the EIRs).

Under the relevant exemptions and exceptions, information will normally only be appropriatelywithheld where it can be demonstrated that release would be likely to cause real and actual harm to arelevant commercial, financial or economic interest.

Public authorities should develop full and appropriate reasoning and / or evidence in support of theapplication of any exemption / exception.

The effect of the release of commercial, financial or economic information will frequently diminishover time.

Each of the relevant FOISA exemptions and EIR exceptions are subject to the public interest test.

This briefing is intended to providegeneralguidance on the interpretation and application of the relevant exemptionsand exceptions. Please remember that all requests for information must be considered on a case by case basis, and the

Commissioners decision is made on the basis of the specific circumstances of each case.

Exemption Briefing Series

Commercial interests and the economy


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The FOISA Exemption Section 33Part 1: What does the law say?Section 33 Commercial interests and the economy

(1) Information is exempt information if-

(a) it constitutes a trade secret; or

(b) its disclosure under this Act would, or would be likely to, prejudice substantially thecommercial interests of any person (including, without prejudice to that generality, aScottish public authority).

(2) Information is exempt information if its disclosure under this Act would, or would be likely to,prejudice substantially-

(a) the economic interests of the whole or part of the United Kingdom; or

(b) the financial interests of an administration in the United Kingdom.

(3) In subsection (2), administration in the United Kingdom has the same meaning as in section28(2).

Part 2: Background to section 332.1 Interpreting the exemptionSection 33 contains within it four distinct exemptions which allow certain types of information to be withheldin response to a request. Under section 33, information may be withheld where either:

it is a trade secret (section 33(1)(a));

its disclosure would (or would be likely to) prejudice substantially the commercial interests of anyperson or organisation (section 33(1)(b));

its disclosure would (or would be likely to) prejudice substantially the economic interests of the wholeor part of the UK (section 33(2)(a)); or

its disclosure would (or would be likely to) prejudice substantially the financial interests of anadministration in the UK (section 33(2)(b)).


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There are particular tests which authorities are required to consider before any information can be withheldunder these exemptions. Details of the tests to be considered in relation to each exemption can be found inthe Applying the exemption section below.Each of the exemptions under section 33 is also subject to the FOISA public interest test. This means that,even where a public authority considers that an exemption applies, the information should nevertheless bedisclosed unless the public interest in withholding it outweighs that in disclosure. If the two are evenlybalanced, the presumption should always be in favour of disclosure. (See the Applying the exemption sectionbelow for further information on the use of the public interest test).

Where an authority takes the view that an exemption in section 33 applies to a request for information, it can(by virtue of section 18 of FOISA) give a refusal notice to the applicant without having to reveal whether theinformation exists or is held by the authority. This provision is based on the premise that for the authority to

confirm whether the information exists or is held would be contrary to the public interest. A notice undersection 18 remains subject to review and application to the Commissioner, so an authority must be preparedto justify any decision to deal with a request in this way if required to do so.

It should also be noted that FOISA is not intended to restrict access to information in any way. Publicauthorities are therefore free to disclose information if they so choose, regardless of whether or not anexemption can be considered to apply.

2.2 Glossary of termsGuidance on the interpretation of the various terms used in the section 33 exemption can be found within the

Applying the exemption section below.2.3 Related ExemptionsInformation which is of commercial sensitivity is frequently discussed using the phrase commercialconfidentiality, but it is important to note that there is no single exemption within FOISA which specificallyconcerns the notion of commercial confidentiality. FOISA instead draws a distinction between informationwhere release would have a detrimental effect on commercial interests, and information which isconfidential in terms of the law.

This briefing deals with FOISAs commercial interests exemption only. A separate briefing considers the

confidentiality exemption under section 36 of FOISA.

Resources: Related ExemptionsThe Scottish Information Commissioners briefing on the Section 36 (Confidentiality) exemption can be foundat: www.itspublicknowledge.info/Law/FOISA-EIRsGuidance/section36.

If you do not have access to the internet, then you can contact our office to request a copy of any of the

Commissioners briefings or decisions. Contact details are available at the end of this document.


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Part 3: Applying the exemptionDetails of the tests and considerations which are required for the application of the four componentexemptions of section 33 are set out below.

3.1 Section 33(1)(a) Trade SecretsSection 33(1)(a) sets out that information is exempt if it constitutes a trade secret.

The key question to be considered by authorities when assessing whether the section 33(1)(a) exemptionapplies will therefore be:

a) Does the requested information constitute a trade secret?Where it is found that the section 33(1)(a) exemption does apply, the authority must then go on to considera second question, before a final decision can be made in relation to the release of the information:

b) Where does the public interest lie in relation to the information?The sections below contain guidance on the consideration of the above questions.

a) Does the requested information constitute a trade secret?There is no definition of trade secret in FOISA. When the FOI (Scotland) Bill was being considered byParliament, the then Justice Minister said:

"Although trade secrets are often considered to be commercial interests, I invite the Committee toaccept that they are materially different from the normal interest that a business has in theconfidentiality of its affairs. A trade secret can be regarded as an asset - perhaps the most valuableasset - of the business. The recipes for Drambuie and Irn Bru are examples of trade secrets thatpeople would readily recognise as being of a different quality from commercial interests. Sometimestrade secrets attract legal protection, such as a patent or copyright, but often the only protection is inmaintaining their secrecy."

The Justice Minister then drew the Committee's attention to the definition of trade secret given in the Codeof Practice on Access to Scottish Executive Information (1999) (this Code is no longer in use now that FOISAis in force). Trade secrets were described in the Code as:

"Information (including but not limited to a formula, pattern, compilation, programme, method,technique, or process or information contained or embodied in a product, device or mechanism)which:

(i) is or may be used in a trade or business

(ii) is not generally known in that trade or business


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(iii) has economic value from not being generally known and

(iv) is the subject of efforts that are reasonable under the circumstances to maintain its

secrecy.

The definition of trade secret has also been considered by the courts. In Facenda Chicken Ltd v Fowler[1987], the court recognised that it was difficult to define trade secret:"It is clearly impossible to provide a list of matters which will qualify as trade secrets or theirequivalent. Secret processes of manufacture provide obvious examples, but innumerable other piecesof information are capable of being trade secrets. In addition, the fact that the circulation of certaininformation is restricted to a limited number of individuals may throw light on the status of theinformation and its degree of confidentiality."

In a later case, Lansing Linde Ltd v Kerr [1991], the court advanced the following definition:"A trade secret is information which, if disclosed to a competitor, would be liable to cause real (orsignificant) harm to the owner of the secret. I would add first, that it must be information used in atrade or business, and secondly that the owner must limit the dissemination of it or at least notencourage or permit widespread publication."

While the section 33(1)(a) exemption does not therefore contain an explicit harm test (unlike the othersection 33 exemptions, which require authorities to consider the harm that the release of the informationwould cause to particular interests), the issue of whether harm will be caused through the release of

information will nevertheless be a key factor in assessing whether the information is, in fact, a trade secret.

Examples of the types of information which the courts have previously identified as trade secrets include:

Technical data relating to special methods of design or construction; Details of trade practices and processes which would be harmful if they fell into the hands of

competitors; Technical knowledge connected with the manufacture of particular goods; Information relating to sales, prices, marketing activity or customers which would be advantageous to

a competing company.

In each of the section 33(1)(a) cases considered to date, the Commissioner has found that the section33(1)(a) exemption had been applied inappropriately.

The Commissioner has set out that the issue of whether the information constitutes a trade secret willfrequently be time sensitive and, while the information may have at one time have constituted a trade secret,that status may be lost with the passage of time, as the sensitivity of the information diminishes.

This position is informed by Faccenda Chicken Ltd v. Fowler [1987], where it was noted that:innumerablepieces of information are capable of being trade secrets, though the secrecy of some

information may only be short lived.


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Cases considered by the Commissioner where the sensitivity of the information was found to have diminishedover time include:

Decision 180/2006 Mr Alfred Weir and Fife Council The Council refused a request for pricingschedules submitted in 2003 as part of a tendering process. The Commissioner felt that thecommercial sensitivity of the information was likely to have decreased significantly, and that theschedules used would be unlikely to guide future submissions. The Commissioner also observed thatany secrecy which should be associated with the information in the tender documents would mostlikely relate to the way in which the prices were calculated, rather than the prices themselves, and thatthis calculation methodology could not be determined from the requested information.

Decision 034/2006 Mr David Smith of Pentland Homeowners Association and Dundee City Council This again related to a request for tendering information, and the Commissioner again found that the

passage of time had decreased its sensitivity to the extent that it no longer constituted a trade secret.In a further case - Decision 056/2006 MacRoberts and the City of Edinburgh Council the Commissionerfound that the requested information could be compiled through publicly accessible Council registers, albeit ata cost. The Commissioner therefore concluded that the information could be reproduced by competitors,and did not, as a result, constitute a trade secret. In this case, the Commissioner nevertheless found that theinformation could be appropriately exempted under the exemptions contained in sections 33(1)(b) and 36(2)(Confidentiality) of FOISA.

In his decision Decision 104/2008 Streetwork UK and Glasgow City Council,the Commissioner made it clearthat he could not accept the whole of a successful tenderers proposal as a trade secret, in the absence of

more specific arguments as to which constituent parts were considered secret and why. In any event, heconcluded that any sensitivity in the information would have diminished sufficiently in the period from thedecision to award the contract for it to have ceased to be a trade secret.

In deciding whether to rely on the section 33(1)(a) exemption, therefore, there are a number of issues whichan authority should consider. These will include:

Is the information of commercial value? If not, it is unlikely that it will be a trade secret. Is the information used for the purpose of trade? Would the release of the information harm trade? Is the information common knowledge? The more people who know the information, the less likely it

is to be a trade secret. How easy would it be for competitors to discover or reproduce the information for themselves? The

easier it would be for competitors to copy, the less likely it is that the information is a trade secret. Has the value of the information diminished over time? Information which constitutes a trade secret

at the time of its creation may lose its commercial value as time passes.

b) Where does the public interest lie in relation to the information?Even in circumstances where the section 33(1)(a) exemption is found to apply, the authority mustnevertheless go on to consider the public interest in relation to the information. This public interest testassesses whether, in all the circumstances of the case, the public interest is better served by disclosing orwithholding the information. This involves a balancing exercise. There is an in-built presumption in FOISAthat it is in the public interest to disclose information unless a public authority can show why there is a


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greater public interest in withholding the information.

FOISA does not define the term public interest, but it has been described as something which is of serious

concern and benefit to the public. It has also been held that the public interest does not mean what is ofinterest to the public, but what is in the interest of the public.The Commissioner has produced separate guidance to assist with the consideration of the public interest test.This is available from the Commissioners website (see Resources section below).At the time of writing, none of the section 33(1)(a) cases investigated by the Commissioner have required theconsideration of the public interest test, as in each case the Commissioner found that the exemption had notbeen appropriately applied.

Resources: Section 33(1)(a)Commissioners Decisions:

The full text of all of the Commissioners decisions, including those referenced above, can be viewed on theCommissioners website. To view a decision, go to www.itspublicknowledge.info/decisionsand enter therelevant decision number (e.g. 0xx/200x) in the Search bar.

The Public Interest Test:

The Commissioners briefing on the public interest test is available at:

www.itspublicknowledge.info/Law/FOISA-EIRsGuidance/ThePublicInterestTest



Court cases cited:Facenda Chicken Ltd v Fowler [1987] 1 Ch 117, [1986] 1 All ER 617Lansing Linde Ltd v Kerr [1991] 1 All ER 418, [1991] 1 WLR 251, CARelevant cases from other jurisdictions:

The Scottish Information Commissioner considered the following case by the Irish Information Commissioner

when assessing cases 034/2006 and 180/2006:Case 98049, 90056, 98057 Henry Ford & Sons, Nissan Ireland and Motor Distributors Ltd and the Office ofPublic Works. Cases from the Irish Information Commissioner can be accessed at:www.oic.gov.ie/en/DecisionsoftheCommissioner.


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3.2 Section 33(1)(b) The commercial interests of any personSection 33(1)(b) exempts information if its disclosure would, or would be likely to, prejudice substantially thecommercial interests of any person. Any person, will include a public authoritys own commercial interests,as well as those of any other public authority, person, company, partnership, etc.

If, therefore, a public authority has entered into a contract with another body for the supply of goods orservices and the public authority is asked for information about that contract, it may be entitled to withholdthe information if release would cause substantial harm to the commercial interests of the contractor.

In considering whether the section 33(1)(b) exemption applies, the questions which must be considered are asfollows:

a) Do commercial interests exist in relation to the information? If so, whose commercial interests arethey? What is the nature of those interests?

b) Would disclosure cause the level of harm required? In what way will this harm occur? Can this beevidenced? How likely is it that this will happen?

Where it is found that the section 33(1)(b) exemption does apply, the authority must then go on to considera third question, before a final decision can be made in relation to the information:

c) Where does the public interest lie in relation to the information?The sections below contain detailed guidance on the consideration of the above three questions.

a) Do commercial interests exist in relation to the information?The term commercial interests is not defined in FOISA. It is important to note, however, that theCommissioner considers that there is a distinction to be drawn between commercial interests and financialinterests. A person or organisations financial interests will relate to the management of its financialresources and assets, while its commercial interests will specifically relate to any commercial trading activity itundertakes, e.g. the ongoing sale and purchase of goods and services, commonly for the purpose of revenuegeneration. Such activity will normally take place within a competitive environment.

While there may be many cases where prejudice to the financial interests of a public authority may affect itscommercial interests, this will not always be the case. For example, information as to the level at whichCouncil Tax is to be set is information which affects the financial interests of a council, but that informationdoes not relate to any commercial activity. Likewise, the purchase of the resources required by an authorityto undertake its core activities is also unlikely to represent a commercial activity. While the purchase of suchresources may entail activity which engages with commercial operators, it will not necessarily follow that theauthority has commercial interests in relation to that activity.

It should also be noted that, while activity to which information relates will normally be commercial innature, it will not necessarily be undertaken for the purpose of profit generation (although this will becommon). For example, in Decision061/2005 Mr Carl Reavey and Caledonian MacBrayne Limited, theCommissioner set out that, despite the fact that Caledonian MacBraynes services operated on a loss-making


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basis (and these are subsidised from the public purse), the company was nevertheless actively engaged in thesale and purchase of services within a competitive environment and, as such, held commercial interests inrelation to those services.

In seeking to withhold any information under section 33(1)(b), the authority must ensure that its case sets outwhose commercial interests are likely to be prejudiced, as well as the particular nature of those interests.

The Commissioner has found that relevant commercial interests exist in the following noteworthy cases:

Decision 098/2007 Ms Sandra McGregor and the Common Services Agency for the Scottish HealthService The Commissioner found that NHS Scotlands Central Legal Office held commercialinterests in relation to information held about legal fees and outlays, in that it is involved in activecompetition with other private law firms for business from NHS Scotland bodies.

Decision 056/2006 Macroberts and the City of Edinburgh Council The Council argued that therequested information would harm the commercial interests of Scottish Water. The Commissioneragreed that although Scottish Water is a public authority, it is charged with operating as if it were aprivate company, and that it held commercial interests in relation to the relevant information.

Decision 233/2006 Mr Mike Portlock and Glasgow City Council Request for the cost of a foodstuffpurchased by the Council. The Commissioner found that a proportion of the foodstuffs purchasedwere used to supply a commercial catering service operated by the Council and, as a result, relevantcommercial interests were found to exist.

The Commissioner found that relevant commercial interests did not exist in the following case:

Decision 052/2006 Mr K and the University of Aberdeen The Commissioner found that theUniversitys purchase of travel services did not represent a commercial interest, in that the Universityengaged in this activity only occasionally, and did so only in order to facilitate the fulfilment of its corefunctions.

b) Would disclosure cause the level of harm required? (The harm test)The harm which would, or would be likely to, result from disclosure must be at the level of substantialprejudice. There is no definition of substantial prejudice in FOISA, but the Commissioner's view is that inorder to claim this exemption, the damage caused by disclosing the information must be of real anddemonstrable significance, rather than simply marginal.

FOISA sets out that that the exemption can be applied where release would, or would be likely, to causeharm. The Commissioner therefore takes the view that there must be at least a significant probability thatthe required degree of harm would occur in order for the exemption to be appropriately applied. Theremust also be a genuine link between disclosure and the harm: it cannot simply be a remote or hypotheticalpossibility.

Authorities should therefore disclose the information asked for unless it would, or would be likely to, cause

real, actual and significant harm and should avoid classifying types of documents as potentially falling within thisexemption.


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The meaning of the word likely is open to interpretation. The general legal principle was explained byChadwick LJ (in Three Rivers District Council v Governor and Company of the Bank of England (No 4)[2002] EWCA Civ 1182, [2003] 1 WLR 210) when he said that likely does not carry any necessaryconnotation of more probable than not. It is a word which takes its meaning from the context. In otherjudgements likely has been taken to mean may well, or it has been held that likely implies a substantialrather than a merely speculative possibility, a possibility that cannot sensibly be ignored.

As with all exemptions, the use of section 33(1)(b) will need to be justified on a case by case basis. Anauthority may well consider, for example, that contracts with third party service providers contain financialinformation which falls within the scope of section 33(1)(b). However, in such circumstances, it will notgenerally be appropriate to exempt such contracts in their entirety. When considering such cases, thespecific content of individual contracts must be assessed, and only that information which falls within thescope of an exemption withheld. It may be appropriately for documents to be released with exempt

information redacted (blanked out), rather than for the documentation to be withheld in its entirety.

Cases where the Commissioner has found that the release of information would indeed prejudice substantiallythe commercial interests of an organisation include:

Decision 005/2010 Leckie and Leckie Limited and the Scottish Qualifications Authority (SQA) - theapplicant requested a successful tendering companys tender submission and pre-qualificationquestionnaire for a contract to publish past examination papers. The contract had been awarded lessthan a month before the request was made and, although work had commenced by the date of theSQAs review, the implementation process remained at an early stage. The Commissioner acceptedthat, had SQA disclosed the withheld information, there was a clear risk that it could have been used

in a manner which would have been detrimental to the successful tendering companys commercialinterests.

Decision 233/2006 Mr Mike Portlock and Glasgow City Council the Commissioner found that therelease of the unit price the Council paid for a particular foodstuff would prejudice substantially thecommercial interests of the Councils catering company, in that it would be likely to harm theCouncils ability to secure an advantageous price for the product, which would in turn affect thecompetitiveness of the catering companys future tender bids.

Decision 027/2006 Mr Gordon Ross and Caledonian MacBrayne Limited the Commissioner agreedthat the release of passenger numbers contained in vessel log sheets would allow CaledonianMacBraynes commercial competitors to cherry pick the most attractive periods to operate a rivalservice, damaging Caledonian MacBraynes commercial interests.

Cases where the Commissioner found that required degree of harm to commercial interests would not occurinclude:

Decision 053/2006 Professor Sheila Bird and the Scottish Prison Service The Scottish PrisonServices arguments included the suggestion that adverse media comment which may arise from therelease of performance statistics for its commercial partner may have a negative impact on both theshare price of that partner and its ability to recruit staff. The Scottish Prison Service did not, however,

provide appropriate evidence to support this assertion. Without such evidence the Commissionerwas unable to conclude that the commercial interests would be harmed to the required degree.


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Decision 104/2008 Streetwork UK and Glasgow City Council the Commissioner consideredwhether a successful tenderers prospects in relation to future similar contracts were likely to beharmed by disclosure of certain tender documents. He took the view that they were not, noting thatwhile the information might be of assistance to a potential competitor in some ways it would not byitself assist that competitor to demonstrate it had the capacity to provide the service in question. Inthis case, the contract had commenced and the service being provided was such that the successfultenderers organisation and methods would be visible to those coming into contact with it. TheCommissioner also noted that future requirements, even for a similar contract, would depend on thecircumstances prevalent at a particular place and time rather than those applicable to the contract towhich the request related.

As with the exemption under section 33(1)(a), the effect of the passage of time must also be considered whenassessing whether the release of information will cause the required degree of harm. The potential that

certain information may have to cause harm will frequently diminish over time.

For example, information relating to a tendering process may well cause harm to the commercial interests ofthose submitting tenders during or immediately following that process, but as time passes the likelihood ofthis harm will diminish as prices, service delivery methods and market conditions change.

The Commissioner has considered related matters in a number of decisions. These include:

Decision 012/2007 Mr Frank French and South Lanarkshire Council The information sought (whichrelated to a private business) dated from 2002. The Commissioner noted that in the interveningperiod the nature of the business had changed, and he did not accept that any significant commercial

advantage could be gained through access to the outdated information requested by the applicant.

Decision 216/2006 Mr David McNie and West Lothian Council The Commissioner concluded thatthe three year period between a tendering process and the request for information on the successfulbid had reduced the potential value of the information to any competitors for future tenders. TheCommissioner found that the required level of harm would therefore not occur.

Decision 104/2009 Unison and the Scottish Prison Service The Commissioner considered thefinancial model contained within the PFI contract for the building and operation of Kilmarnock prison.He accepted that this financial model would have been highly commercially sensitive when the contractwas negotiated and concluded in November 1997. However, he considered that this degree ofsensitivity would diminish over time. The Commissioner concluded that, at the time of Unisonsrequest (nine years after the contract was concluded), disclosure would not be likely to prejudicesubstantially the contractors commercial interests.

Another factor to consider will be whether the information in question is already publicly available. Whereinformation is in the public domain, it will not generally be appropriate to apply the exemption under section33(1)(b). In Decision114/2007 Professor Neil Kay and the Scottish Executive, for example, theCommissioner found that the (then) Scottish Executive had incorrectly applied the section 33(1)(b)exemption to information which was substantially the same as information that had previously been releasedinto the public domain.

The final point to note is that, in all circumstances where an authority seeks to apply a FOISA exemption, theauthority is required to make an appropriate case for the application of that exemption, taking into account all


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relevant tests which must be considered before the exemption can be applied. When an application isbrought to the Commissioner in relation to a request, the Commissioner will require that a full andappropriate case is presented to him, supported by evidence and example where appropriate.

Should an authority fail to present an appropriate case, then the Commissioner will almost certainly concludethat the exemption in question cannot be appropriately applied. With regard to section 33(1)(b), theCommissioner drew this conclusion in Decision048/2007 Mrs Stella Stephen and Aberdeenshire Council(although it should be noted that the Commissioner went on to find that the information in question wasnevertheless exempt under FOISAs confidentiality exemption - section 36(2)).

c) Where does the public interest lie in relation to the information?Even in circumstances where the section 33(1)(b) exemption is found to apply, the authority must

nevertheless go on to consider the public interest in relation to the information. This public interest testassesses whether, in all the circumstances of the case, the public interest is best served by disclosing orwithholding the information. This involves a balancing exercise. There is an in-built presumption in FOISAthat it is in the public interest to disclose information unless a public authority can show why there is agreater public interest in withholding the information.

FOISA does not define the term public interest, but it has been described as something which is of seriousconcern and benefit to the public. It has also been held that the public interest does not mean what is ofinterest to the public, but what is in the interest of the public.The Commissioner has produced separate guidance to assist with the consideration of the public interest test.

This is available from the Commissioners website (see Resources section below).At the time of writing, where the Commissioner has found that the section 33(1)(b) exemption has beencorrectly applied (i.e. where he is satisfied that the release of information would indeed cause real, actual andsignificant harm to commercial interests) he has yet to order disclosure in the public interest.

Cases where the Commissioner has considered the public interest test in relation to the section 33(1)(b)exemption include:

Decision 005/2010 Leckie and Leckie Limited and the Scottish Qualification Authority Decision 104/2008 Streetwork UK and Glasgow City Council Decision 192/2007 Mr Y and the University of Glasgow Decision 114/2007 Professor Neil Kay and the Scottish Executive Decision 233/2006 Mr Mike Portlock and Glasgow City Council Decision 053/2006 Professor Sheila Bird and the Scottish Prison Service Decision 048/2006 Mr Gordon Ross and Caledonian MacBrayne Limited Decision 027/2006 Mr Gordon Ross and Caledonian MacBrayne Limited


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3.3 Section 33(2)(a) The economic interests of the United KingdomSection 33(2)(a) of FOISA exempts information from release if its disclosure would, or would be likely to,prejudice substantially the economic interests of the whole or part of the United Kingdom. There is nodefinition of part in FOISA, but it is likely to include regions of the United Kingdom and not just theseparate countries making up the United Kingdom.

The exemption seeks to protect collective interests as opposed to those of individuals, and may be applied toany information where release would cause substantial harm to the economy of the UK, either as a whole orin part. The exemption may potentially also apply in relation to information relating to an individual company,in circumstances where that company's performance would have a major influence on the national or localeconomy.

The exemption will not apply to information relating to the economic interests of states other than the UKunless the release of that information would also impact on the UK economy.

The questions to be considered in relation to the section 33(2)(a) exemption are:

a) Would disclosure cause the level of harm required?And, where the exemption is found to apply:

b) Where does the public interest lie in relation to the information?

a) Would disclosure case the level of harm required? (The harm test)The harm which would, or would be likely to, result from disclosure must be at the level of substantialprejudice. There is no definition of substantial prejudice in FOISA, but the Commissioner's view is that inorder to claim this exemption, the damage caused by disclosing the information must be of real anddemonstrable significance, rather than simply marginal.

FOISA sets out that that the exemption can be applied where release would, or would be likely, to causeharm. The Commissioner therefore takes the view that there must be at least a significant probability that

the required degree of harm would occur in order for the exemption to be appropriately applied. Theremust also be a genuine link between disclosure and the harm: it cannot simply be a remote or hypotheticalpossibility.

Authorities should therefore disclose the information asked for unless it would, or would be likely to, causereal, actual and significant harm and should avoid classifying types of documents as potentially falling within thisexemption.

The meaning of the word likely is open to interpretation. The general legal principle was explained byChadwick LJ (in Three Rivers District Council v Governor and Company of the Bank of England (No 4)[2002] EWCA Civ 1182, [2003] 1 WLR 210) when he said that likely does not carry any necessaryconnotation of more probable than not. It is a word which takes its meaning from the context. In other


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judgements likely has been taken to mean may well, or it has been held that likely implies a substantialrather than a merely speculative possibility, a possibility that cannot sensibly be ignored.

As with all other exemptions, the use of section 33(2)(a) will need to be justified on a case by case basis. Inaddition - and in common with the other exemptions under section 33 - much of the information consideredin relation to this exemption may be time-sensitive, with the potential harm caused by release diminishing as aresult of the passage of time. For example, the sensitivity of information relating to the Budget or changes ininterest rates is likely to diminish in this way as time passes.

The Commissioner has considered section 33(2)(a) in the following case:

Decision 023/2008 Mr Paul Drury and Glasgow City Council The Council believed that the releaseof information relating to travel and hotel costs associated with Glasgows bid to stage the 2014

Commonwealth Games would be likely to damage Glasgows chances of success, prejudicing thedelivery of economic benefits to Glasgow, the West Coast of Scotland, and Scotland as a whole. TheCommissioner did not, however, accept that disclosure of the information requested would damageGlasgows chances of winning the bid, nor would it have the economic consequences argued by theCouncil. The Commissioner did not, therefore support the application of section 33(2)(a).

b) Where does the public interest lie in relation to the information?Even in circumstances where the section 33(2)(a) exemption is found to apply, the authority mustnevertheless go on to consider the public interest in relation to the information. This public interest testassesses whether, in all the circumstances of the case, the public interest is best served by disclosing or

withholding the information. This involves a balancing exercise. There is an in-built presumption in FOISAthat it is in the public interest to disclose information unless a public authority can show why there is agreater public interest in withholding the information.

FOISA does not define the term public interest, but it has been described as something which is of seriousconcern and benefit to the public. It has also been held that the public interest does not mean what is ofinterest to the public, but what is in the interest of the public.The Commissioner has produced separate guidance to assist with the consideration of the public interest test.This is available from the Commissioners website (see Resources section below).


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Resources: Section 33(2)(a)Commissioners Decisions:



The Commissioners briefing on the public interest test is available at:www.itspublicknowledge.info/Law/FOISA-EIRsGuidance/ThePublicInterestTest

If you do not have access to the internet, then you can contact our office to request a copy of any of theCommissioners briefings or decisions. Contact details are available at the end of this document.

3.4 Section 33(2)(b) the financial interests of an administration in the United KingdomSection 33(2)(b) sets out that information is exempt if its disclosure would, or would be likely to, prejudicesubstantially the financial interests of an administration in the United Kingdom.

Section 33(3) states that the term administration in the United Kingdom in section 33(2) has the samemeaning as in section 28(2) of FOISA, i.e.:

the Government of the United Kingdom; the Scottish Administration; the Executive Committee of the Northern Ireland Assembly; or the National Assembly for Wales.

The Scottish Administration is further defined in section 126(6) and (7) of the Scotland Act 1998 as:

members of the Scottish Executive and junior Scottish Ministers and their staff; and non-ministerial office holders of the Scottish Administration and their staff.

The questions to be considered in relation to the section 33(2)(b) exemption are:

a) Would disclosure cause the level of harm required?And, where the exemption is found to apply:

b) Where does the public interest lie in relation to the information?


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a) Would disclosure cause the level of harm required? (The harm test)The harm which would, or would be likely to, result from disclosure must be at the level of substantialprejudice. There is no definition of substantial prejudice in FOISA, but the Commissioner's view is that inorder to claim this exemption, the damage caused by disclosing the information must be of real anddemonstrable significance, rather than simply marginal.

FOISA sets out that that the exemption can be applied where release would, or would be likely, to causeharm. The Commissioner therefore takes the view that there must be at least a significant probability thatthe required degree of harm would occur in order for the exemption to be appropriately applied. Theremust also be a genuine link between disclosure and the harm: it cannot simply be a remote or hypotheticalpossibility.

Authorities should therefore disclose the information asked for unless it would, or would be likely to, causereal, actual and significant harm and should avoid classifying types of documents as potentially falling within thisexemption. As with all other exemptions, the use of section 33(2)(b) will need to be justified on a case bycase basis.

The exemption refers to prejudice to the financial interests of an administration. An administrationsfinancial interests will generally concern the management of its financial resources, and information fallingwithin the scope of the exemption will be that where release will have a significant detrimental impact on e.g.the funding of the administration, the revenue raised through taxation, or the availability and cost ofborrowing to the administration.

In order for the exemption to be appropriately applied, therefore, an authority will be required to show thatrelease would affect the administration to the point where there would be a detrimental impact on e.g. overallpublic spending levels or taxation. The anticipated prejudice must also be demonstrated to affect the financialinterests of the administration as a whole, as opposed to only a department, agency or other component partof that administration.

The type of information which falls within the scope of the section 33(2)(b) exemption is perhaps most likelyto be held by the Scottish Government, although it may well be the case that other public authorities holdsuch information.

To date the Commissioner has considered only three cases where section 33(2)(b) has been claimed by theauthority:

Decision 067/2005 Mr Gordon Ross, Managing Director of Western Ferries (Clyde) Limited and theScottish Executive Decision 119/2007 Ms N and the Common Services Agency for the Scottish Health Service Decision 146/2009 Professor Allyson Pollock and the Scottish Ministers

In each of these cases, the Commissioner has found that the authority had failed to demonstrate that therelease of the information would, or would be likely to, prejudice substantially the financial interests of a UK

administration (in each case, the Scottish Administration).


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b) Where does the public interest lie in relation to the information?Even in circumstances where the section 33(2)(b) exemption is found to apply, the authority mustnevertheless go on to consider the public interest in relation to the information. This public interest testassesses whether, in all the circumstances of the case, the public interest is best served by disclosing orwithholding the information. This involves a balancing exercise. There is an in-built presumption in FOISAthat it is in the public interest to disclose information unless a public authority can show why there is agreater public interest in withholding the information.

FOISA does not define the term public interest, but it has been described as something which is of seriousconcern and benefit to the public. It has also been held that the public interest does not mean what is ofinterest to the public, but what is in the interest of the public.The Commissioner has produced separate guidance to assist with the consideration of the public interest test.This is available from the Commissioners website (see Resources section below).

Resources: Section 33(2)(b)Commissioners Decisions:







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The EIR Exceptions - Regulation 10(5)(e) and 10(5)(f)While FOISA refers to exemptions, the EIRs instead refer to exceptions from release. While this terminologymay be different, the outcome will be the same where information falls within the scope of an exemption /exception that information can (pending any appropriate consideration of the public interest test) be withheldfrom release.

Within the EIR exceptions there is no direct equivalent to the exemptions contained under section 33 ofFOISA. There are, however, two exceptions in particular, which might be considered in relation to equivalentinformation falling within the scope of the section 33 FOISA exemptions. These are regulation 10(5)(e) andregulation 10(5)(f).

Regulation 10(5)(e)Regulation 10(5)(e) sets out that a Scottish public authority may refuse to make environmental informationavailable where its disclosure would, or would be likely to, prejudice substantially the confidentiality ofcommercial or industrial information where such confidentiality is provided for by law to protect a legitimateeconomic interest.

Before regulation 10(5)(e) can be engaged, therefore, authorities should consider the following questions, andshould be prepared to provide evidence to demonstrate its reasoning in the event of an appeal to theCommissioner:

Is the information commercial or industrial in nature? Does a legally-binding duty of confidence exist in relation to the information? Is the information publicly available? Information which is available in the public domain will be highly

unlikely to engage the exception under regulation 10(5)(e). Would disclosure of the information cause, or be likely to cause substantial harm to a legitimateeconomic interest?

The term legitimate economic interest is not defined within the EIRs. The interest in question will,however, be financial, commercial or otherwise economic in nature, and the prejudice to that interest must

be substantial. As with the exemptions under section 33(1)(b) or 33(2) of FOISA, therefore, before theexception can be applied, the authority must be certain that the harm to the economic interest in questionwould be real, actual and of significant substance.

As with all other exceptions under regulation 10 of the EIRs, the exception contained within regulation10(5)(e) is subject to a public interest test. Regulation 10(2)(b) requires a public authority to apply apresumption in favour of disclosure when considering the application of this and other exceptions. Thismeans that the information should be disclosed unless it would be against the public interest to do so. (Asimilar presumption applies in relation to FOISA, but is less clearly stated.)

The starting position is that there is a public interest in disclosure of environmental information (as expressed

in the EIRs and associated European Directive) and that only if there is a stronger competing public interest inwithholding the information should the exception be applied.


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The Commissioners briefing on the public interest test provides further information on the consideration ofthis test (see Resources section below).

The Commissioner has considered a number of cases involving regulation 10(5)(e). The following decisionsdiscuss the tests that should be considered in relation to this exception in some detail:

Decision 161/2011 Unison and Scottish Water Decision 119/2010 Mr Tom Minogue and Transport Scotland Decision 033/2009 Mr Paul Drury and East Renfrewshire Council Decision 119/2008 Mr James Paul Kelly and Dundee City Council

Resources: Regulation 10(5)(e)Commissioners Decisions:


Guidance on the EIRs

The Commissioner has produced separate detailed guidance on the EIRs, available at:www.itspublicknowledge.info/uploadedfiles/EIRGuidance.pdf

Guidance on the public interest test :The Commissioners briefing on the public interest test is available at:www.itspublicknowledge.info/Law/FOISA-EIRsGuidance/ThePublicInterestTest

Regulation 10(5)(e) of the EIRs also relates closely to the separate FOISA exemption under section 36(confidentiality), although there is not the same requirement for information to have been obtained from athird party. The confidentiality exemption is discussed in a separate briefing, available at:www.itspublicknowledge.info/Law/FOISA-EIRsGuidance/section36



Regulation 10(5)(f)Regulation 10(5)(f) sets out that a Scottish public authority may refuse to make environmental informationavailable where its disclosure would, or would be likely to, prejudice substantially:

The interests of the person who provided the information where that person

(i) was not under, and could not have been put under, any legal obligation to supply theinformation;


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(ii) did not supply it in circumstances such that it could, apart from these Regulations, be madeavailable; and

(iii) has not consented to its disclosure;

Before regulation 10(5)(f) can be engaged, authorities should consider the following questions, and should beprepared to provide evidence to demonstrate its reasoning in the event of an appeal to the Commissioner:

Was the information provided by a third party? Was that third party under any legal obligation to provide the information to the authority? If so, the

exception cannot be engaged.

Could the provider of the information have been required by law to provide it? If so, the exceptioncannot be engaged.

Would release of the information cause, or be likely to cause, substantial harm to the interests of theinformation provider?

Is the information otherwise publicly available? Where information is publicly available it will be highlyunlikely to cause the required degree of harm.

Has the information provider consented to its disclosure? When considering regulation 10(5)(f)authorities should make contact with the information provider to confirm whether they consent todisclosure (where such consent has not previously been made explicit).

The Commissioner has issued a number of decisions which have involved the consideration of regulation10(5)(f). The following contain detailed consideration of this exception:

Decision101/2008 Mr Alistair Johnson and East Renfrewshire Council - the Commissioner noted thatin order to rely upon this exception, the authority must be able to demonstrate that the person(s)supplying the information had refused consent to its disclosure. Since the Commissioner was notpresented with any information to suggest that the Council had ever raised the question of consentwith the persons providing the information, he could not agree that the exception applied. TheCommissioner still considered whether (had consent been refused) disclosure would be likely tosubstantially prejudice the interests of the person(s) supplying the information, and he concluded thatit would not.

Decision046/2010 Fish Legal and Scottish Natural Heritage - the information under consideration(regarding salmon farming operations in Loch Ewe) had been supplied to SNH by the AreaManagement Group (AMG). The Commissioner found that some of the information underconsideration had since been made publicly available. For this information, the Commissioner couldnot accept that it had been supplied in circumstances whereby the information could not otherwise bemade available, and so regulation 10(5)(f) could not apply. For the remaining information, theCommissioners decision rested upon consideration of whether disclosure would harm the AMG byreducing trust and limiting the future exchange of information. He accepted that the relevant harmhad been demonstrated in relation to some of the information, but concluded that the exception hadbeen wrongly applied to the rest.


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Decision094/2010 Mr Rob Edwards and the Scottish Ministers - the Commissioner accepted thatinformation provided to the Ministers by UK Government departments and by Nirex had beencorrectly withheld under regulation 10(5)(f). He concluded that disclosure of information provided bythe UK Government would have substantially prejudiced its interests by revealing internal its adviceand deliberations and harming ongoing policy development in the relevant area. He also accepted thatdisclosure of the information supplied by Nirex would have been prejudicial to its interests byundermining the confidentiality of its communications with legal advisers, and its ability to engage infrank and open discussions with Government.

The public interest testAs with all other exceptions under regulation 10 of the EIRs, the exception contained within regulation

10(5)(f) is subject to the public interest test. Regulation 10(2)(b) requires a public authority to apply apresumption in favour of disclosure when considering the application of this and other exceptions. Thismeans that the information should be disclosed unless it would be against the public interest to do so. (Asimilar presumption applies in relation to FOISA, but is less clearly stated.)

The starting position is that there is a public interest in disclosure of environmental information (as expressedin the EIRs and associated European Directive) and that only if there is a stronger competing public interest inwithholding the information should the exception be applied.

The Commissioners briefing on the public interest test provides further information on the consideration ofthis test (see Resources section below).Under FOISA, the public interest test is considered separately for each exemption claimed. However, theposition differs for the EIRs.

On 28 July 2011, the European Court of Justice (the ECJ) issued its judgement in the case ofOffice ofCommunications v Information Commissioner [2011] EUECJ C-71/10(www.bailii.org/eu/cases/EUECJ/2011/C7110.html). The judgement considers how the public interest testshould be addressed when a public authority has applied more than one exception to the same piece ofinformation. (The case involved a request made under the (UK) Environmental Information Regulations 2004,but, as the judgement interprets Directive 2003/4/EC on public access to environmental information, it has

direct relevance to how the public interest test should be approached under the Environmental Information(Scotland) Regulations 2004.)

The judgement makes it clear that there is a two-stage public interest involved. The first stage, in line withcurrent practice, is to consider whether, in relation to each exception applied by an authority, the publicinterest in making the information available is outweighed by the public interest in maintaining the exception.

However, the ECJ has decided that authorities may also go on to carry out a second stage test, which involvesweighing all of the grounds for refusing to disclose the information, against the public interests served bydisclosure.

In common with the other exemptions/exceptions discussed in this briefing, the effect of the passage of timeshould be assessed when consideration whether the required degree of prejudice would occur from therelease of information.


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Resources: Regulation 10(5)(f)Guidance on the public interest test:


Guidance on the EIRs

The Commissioner has produced separate detailed guidance on the EIRs, available at:www.itspublicknowledge.info/uploadedfiles/EIRGuidance.pdf

The UNECE has published an Aarhus Convention Implementation Guide. It can be found atwww.unece.org/env/pp/acig.htm

Regulation 10(5)(f) of the EIRs relates closely to the separate FOISA exemption under section 36(confidentiality). The confidentiality exemption is discussed in a separate briefing, available at:www.itspublicknowledge.info/Law/FOISA-EIRsGuidance/section36

Commissioners Decisions:

The full text of all decisions which have been issued by the Commissioner is available from his website at:www.itspublicknowledge.info/decisions

If you do not have access to the internet, then you can contact our office to request a copy of any of theCommissioners briefings or decisions. Contact details are available at the end of this document.

For more information contact:

The Scottish Information CommissionerKinburn Castle, Doubledykes Road, St Andrews KY16 9DS

T: 01334 464610F: 01334 464611enquiries@itspublicknowledge.infowww.itspublicknowledge.info

Briefing last reviewed in full: November 2011Briefing last updated: November 2011


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AppendixThe Environmental Information (Scotland) Regulations 200410 Exceptions from duty to make environmental information available[]

(5) A Scottish public authority may refuse to make environmental information available to the extent thatits disclosure would, or would be likely to, prejudice substantially-

[]

(e) the confidentiality of commercial or industrial information where such confidentiality isprovided for by law to protect a legitimate economic interest;

(f) the interests of the person who provided the information where that person-

(i) was not under, and could not have been put under, any legal obligation to supply theinformation;

(ii) did not supply it in circumstances such that it could, apart from these Regulations, bemade available; and

(iii) has not consented to its disclosure;


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